8-KLeadership ChangesCorporate ChangesExhibits & Filings

ENTERPRISE PRODUCTS PARTNERS L.P. 8-K Report, Executive Changes (Aug 10, 2005)

Filed August 10, 2005For Securities:EPDEPDU

Summary

This Form 8-K filing by Enterprise Products Partners L.P. (EPD) on August 9, 2005, primarily announces two significant developments. First, the appointment of Philip C. Jackson as a new independent director to the General Partner's Board, effective August 8, 2005. This appointment strengthens the board's independence and has implications for director voting and committee composition, specifically the Audit and Conflicts Committee. Second, and of greater operational and financial significance for investors, is the Fifth Amended and Restated Agreement of Limited Partnership, effective August 8, 2005. This amendment fundamentally alters how the General Partner's "Percentage Interest" is calculated and its obligation to make capital contributions. Previously, the General Partner was obligated to maintain a 2% interest. Now, the General Partner has the option to make capital contributions to maintain up to a 2% interest, meaning its percentage interest, and consequently its share of income, losses, and distributions, can be proportionately reduced if it chooses not to contribute capital upon the issuance of new limited partner interests. Additionally, specific depreciation deductions related to a prior capital contribution are now allocated to the General Partner, and the unitholder approval threshold for removing the General Partner has been lowered.

Key Highlights

  • 1Philip C. Jackson appointed as an independent director to the General Partner's Board, enhancing board independence.
  • 2Philip C. Jackson appointed as a member of the Audit and Conflicts Committee.
  • 3The Partnership Agreement has been amended and restated (Fifth Amended and Restated Agreement), effective August 8, 2005.
  • 4The General Partner's obligation to maintain a fixed 2% Percentage Interest is replaced with an option to contribute capital to maintain up to 2%, allowing for a variable Percentage Interest.
  • 5If the General Partner does not contribute to maintain its Percentage Interest, its share of allocations (income, losses, distributions) will be proportionally reduced.
  • 6Specific depreciation deductions related to a prior capital contribution are now allocated to the General Partner to reduce its capital account.
  • 7The unitholder approval threshold for removing the General Partner has been lowered from 64% to 60% of Outstanding Units.

Frequently Asked Questions

Philip C. Jackson's appointment as an independent director enhances the independence of Enterprise Products Partners L.P.'s General Partner's Board. He has also been appointed to the Audit and Conflicts Committee, which is crucial for corporate governance and financial oversight.

The key change is that the General Partner is no longer obligated to maintain a fixed 2% Percentage Interest. It now has the option to make capital contributions to maintain an interest of up to 2%. If the General Partner chooses not to contribute when new units are issued, its Percentage Interest, and consequently its share of future income, losses, and cash distributions, will be proportionately reduced. This could lead to a more variable ownership stake for the General Partner over time.

The amendment lowers the percentage of Outstanding Units required to remove the General Partner from 64% to 60%. This means unitholders have a slightly easier path to exercising their power to remove the General Partner, potentially increasing unitholder influence.

Yes, several other changes were made. These include the allocation of specific depreciation deductions to the General Partner to reduce its capital account, revisions to the 'Special Approval' process for certain transactions, and enhanced 'Separateness Provisions' to further distinguish the Partnership from related entities. These changes aim to refine governance, financial reporting, and the operational structure.