If consenting to corporate action and doing so habitually then yes.

 -----Original Message-----
From:  Haedicke, Mark  
Sent: Tuesday, May 01, 2001 6:55 PM
To: Douglas, Stephen H.
Subject: RE: Canadian Retail

Is signing a unanimous consent in Houston an issue?  Mark




	Stephen H Douglas/ENRON@enronXgate 05/01/2001 05:08 PM 	   To: Peter 
Keohane/CAL/ECT@ECT, Mark E Haedicke/HOU/ECT@ECT  cc: Vicki 
Sharp/HOU/EES@EES  Subject: RE: Canadian Retail


Mark Powell's recollection of the reasoning behind having an all-Canadian 
officer and director slate is correct and we generally like to isolate all of 
the business decision makers of a foreign subsidiary in the country where the 
subsidiary is incorporated.  The concern is that having officers and 
directors located outside of the country of incorporation of the subsidiary 
could provide a basis for a country other than the one where the subsidiary 
is incorporated to assert taxing jurisdiction (the PE issue).  That said, I 
appreciate the control concern and so long as the authority of the 
non-Canadian Director is never exercised outside of Canada (of course, this 
presents a proof issue) having a non-Canadian Director is permissible (from a 
tax perspective, that is).  Let me know whether such a restriction would be 
compatible with the expressed control concern.  Steve. (x30938)

 -----Original Message-----
From:  Keohane, Peter  
Sent: Tuesday, May 01, 2001 12:08 PM
To: Haedicke, Mark
Cc: Douglas, Stephen H.; Sharp, Vicki
Subject: Re: Canadian Retail

I don't think there is a bright line, so that should not be a problem per 
se.  The idea was to make it as "Canadian" as possible for tax purposes.  I 
would of course defer to Steve.


From: Mark E Haedicke on 05/01/2001 11:15 AM CDT
To: Peter Keohane/CAL/ECT@ECT, Stephen H Douglas/Enron@EnronXGate
cc: Vicki Sharp/HOU/EES@EES 
Subject: Canadian Retail

Steve and Peter:  From a control point of view, we should have at least one 
director based in Houston.  Does that present any significant tax risk?  Let 
us know.  Mark Haedicke
----- Forwarded by Mark E Haedicke/HOU/ECT on 05/01/2001 11:11 AM -----



	Mark Powell 05/01/2001 10:24 AM 	   To: David W Delainey/HOU/EES@EES, Rob 
Milnthorp/CAL/ECT@ECT, James Derrick/Enron@EnronXGate, Mark E 
Haedicke/HOU/ECT@ECT, Vicki Sharp/HOU/EES@EES, Peter Keohane/CAL/ECT@ECT  cc: 
Beth Apke/HOU/EES@EES, Morris Richard Clark/Enron@EnronXGate, Andrew 
Wu/HOU/EES@EES  Subject: Canadian Retail



A.  Corporate Structure - To facilitate the meshing of EES' existing Canadian 
affiliate (Enron Energy Services Canada Co. Ltd. ("EES Canada")) and Enron 
Canada Corp.'s mass market retail venture (Enron Direct Limited Partnership 
("Enron Direct Canada")), I propose a simple corporate structure as follows:

Enron Direct Canada's business will be set up as a subsidiary of EES Canada.  
This will involve:
a. a general conveyance of the assets of Enron Direct Canada to its general 
partner, Enron Direct Canada Corp.;
b. the sale of the shares of Enron Direct Canada Corp. from Enron Canada 
Corp. to EES Canada; and
c.  a services agreement whereby Enron Canada Corp. provides key services to 
Enron Direct Canada.

By setting up Enron Direct Canada as a distinct subsidiary of EES Canada, 
both entities will continue to operate as they do today.

As such, (i) Enron Direct Canada will continue to be operated by the staff 
currently in place in Calgary, but within the EES corporate structure, and 
(ii) EES Canada's existing business will continue to be operated as it is 
currently.

B.  Governance - I understand from Peter that a few years back, it was 
decided, for corporate law and, more importantly, tax-related "permanent 
establishment" issues, that all directors and officers of Enron Canada Corp. 
would be Canadian-resident employees of Enron Canada Corp.  Accordingly, 
Enron Canada Corp. was re-organized with a nominee board of directors now 
consisting of Rob (as the senior Canadian commercial employee) and Peter (as 
the senior Canadian legal employee) with officers being the Vice-Presidents 
or Managing Directors in Canada responsible for the various commercial or 
commercial-support groups. 

Following this model, Rob Milnthorp and an employee from the legal department 
would appear to be the appropriate directors of the EES' Canadian 
subsidiaries.  In the short term, the Iegal employee/designee would be me; 
however, the new lawyer hired to work for Enron Direct Canada would assume 
the role. 

With respect to the officers, no changes are required with respect to Enron 
Direct Canada.  With respect to EES Canada, I propose that Rob be appointed 
as the Chairman, President and CEO and I be appointed as Secretary for the 
interim.

Unless I hear otherwise, I will proceed on the basis of these proposals.

Regards,

Mark Powell