Please note Change "Mid-year 2000 Performance Review Process"

Please note the Change:
ENA VP Pre-Ranking Committee Meeting -July 7 =20

As we move into the Spring/Summer of 2000, it is time to turn our attention=
=20
to the performance review process. Mid-year is always busy and we have a=
=20
number of important tasks and projects in process. While recognizing this,=
=20
it remains extremely important to take time over the next few weeks to gath=
er=20
necessary information to provide quality and meaningful feedback for our=20
employees, as well as utilize this information during the year end review=
=20
process.

In the spirit of One Enron, the Performance Review Process (PRC) will be=20
global for Mid-year 2000. Vice Presidents and above across all operating=
=20
companies will be reviewed and discussed in a consistent manner with=20
identical criteria. ENA will review all professional level and above=20
employees. The timeline and training for the midyear process are outlined =
at=20
the end of this memo. Your HR Business Consultant is also available to=20
answer questions.

With regards to the Global Functions, review sessions will be led by the=20
Global and/or Corporate Functional heads, and will be designed to calibrate=
=20
personnel within these areas of expertise. The Global Functional Review=20
Areas include:

_ NetWorks/Technology
_ Accounting
_ RAC
_ Finance
_ Human Resources
_ Public Relations & Reg Affairs=09G. Whalley
=09R. Causey
=09R. Buy
=09A. Fastow
=09C. Olson
=09S. Kean
=20
ENA Mid-Year Process:

ENA has received favorable feedback on the review process used for Mid-year=
=20
and Year-end 1999, and as such, will follow the same general guidelines and=
=20
process for Mid-year 2000. The following are key features of the Mid-year=
=20
2000 process:

o The focus of the feedback will continue to be on the qualitative aspects,=
=20
as opposed to quantitative. Toward this end, communication of the employee=
=01,s=20
explicit ranking will be left to the discretion of the business unit manage=
r.
o Initial discussions with employees regarding their accomplishments, are=
=20
highly encouraged, prior to the Business Review Meetings.
o Mid-year performance results will be used as baseline performance=20
information for Year-end 2000.
o Creation of 3 standard feedback forms for all peer groups. =20
o Standardization of criteria for all peer groups.
o Utilization of a consistent 6 gradation rating scale. =20
o All exempt employees will be discussed at Business Review Meetings and=20
placed into one of six categories by peer group. ENA VP's will be pre-rank=
ed=20
by the ENA Office of the Chairman and Managing Directors prior to the Enron=
=20
PRC. Non-exempt (overtime eligible) employees will be evaluated by their=
=20
supervisors and placed into one of the 6 categories. The results of the=20
Business Review Meetings will be the final rankings for exempt employees=20
below VP, subject to ENA Office of the Chairman.
o A minimum of two representatives from other functional areas will be=20
required at the Business Review Meetings. The meetings should otherwise be=
=20
rescheduled to allow this very important representation to take place. The=
=20
nominated individuals are illustrated below.
o The top 5 HR priorities/challenges for 2000 should also be agreed to at t=
he=20
Business Review Meetings.
o Analysts and Associates will be pre-reviewed in a Business Review Meeting=
s=20
based on their current rotation, then cross-calibrated at the Enron Global=
=20
Analyst and Associate Business Review Meeting.

Peer Groups:

Commercial
Commercial Support
Technical
Specialized Technical

Performance Criteria (for all peer groups):

Innovation/Entrepreneurship
Communication/Setting Direction
Teamwork/Interpersonal
Leadership/Vision/Values=20
Business Instinct
Analytical/Technical

Guidelines:

o Use of multiple sources of input is encouraged (employee, peers, direct=
=20
reports, internal customers, external customers), as is a self-evaluation
o Employees should recommend 5-10 reviewers to Supervisor and Supervisor=20
should select at least three of the employee=01,s recommendations
o All feedback must be entered via the Performance Management System locate=
d=20
on the intranet
o Supervisor should consolidate the feedback, prepare a draft of the=20
Performance Review form and meet with the employee prior to the Business=20
Review meeting
o Final feedback to exempt employee follows the July 7th meeting
o For VP's & MD's, final feedback follows the Enron Executive Committee=20
Meeting

Business Review Meetings / VP Pre-Ranking Committee Meeting=20
Responsibilities / Actions:

The following list represents suggested groups and the individuals=20
responsible for each Business Review Meeting. Attendees at the meetings ar=
e=20
appropriate Supervisors within the Business Unit. In addition, the Office =
of=20
the Chairman requires the attendance of two to three other senior level=20
representatives from other Business Units to add external perspective.

Area/Function=09ENA Lead=09Global/Functional Lead*=09Required Non-functiona=
l Attendees
=09=09=09
COMMERCIAL=09=09=09
=09=09=09
Trading=09Presto=09=09Dietrich
=09Shankman=09=09Calger
=09Lavorato=09=09Bowen
=09McClellan=09=09Ajello
=09Hickerson=09=09Delainey
=09Belden=09=09
=09=09=09
Origination=09Redmond=09=09Shankman
=09Dietrich=09=09McClellan
=09Milnthorp=09=09Belden
=09Calger=09=09Presto
=09Donahue=09=09Delainey
=09Bowen=09=09Lavorato
=09Ajello=09=09
=09Duran=09=09
=09Ondarza=09=09
=09Malcolm=09=09
=09Overdyke=09=09
=09Thompson/Josey=09=09
=09Yzaguirre=09=09
=09=09=09
Finance(*)=09Jakubik=09Fastow=09
=09=09=09
COMMERCIAL SUPPORT=09=09=09
TECHNICAL =09=09=09
SPECIALIZED TECHNICAL=09=09=09
=09=09=09
Legal=09Haedicke=09=09
Research=09Kaminski=09=09
RAC=09Buy=09=09
Technical=09Miller/Parquet=09=09
=09=09=09
Energy Operations (*)=09Beck=09Causey=09Colwell
=09=09=09Oxley
=09=09=09
Business Analysis & Reporting/Tax (*)=09Colwell=09Causey=09Beck
=09Mintz=09=09
=09=09=09
Human Resources (*)=09Oxley=09Olson=09
=09=09=09
Public Relations (*)=09Palmer=09Kean=09
=09=09=09
NetWorks/Technology (*)=09Perlman=09Whalley/McConnell=09

(*) Note: Global Functional Review meetings to be held for these areas.

ENA VP Pre-Ranking Committee:

Ray Bowen=09Mark Frevert=09Dan Leff (non ENA rep)=09David Oxley
Dave Delainey=09Brian Redmond=09George McClellan=09Mark Haedicke
Janet Dietrich=09Julia Murray=09Jeff Shankman=09Gary Hickerson
Jeff Donahue=09Jere Overdyke=09Marty Sunde (non ENA rep)=09John Lavorato

Outcomes of Business Review Meetings/ VP Pre-Ranking Committee Meetings:

o Calibration of employees into six gradations=20
o Promotion nominations below VP
o Assessment of the =01&right people in the right jobs=018
o Assessment of gaps for what is needed in the Business Unit (skills,=20
capabilities, training,
experience)
o Top five HR challenges
o Feedback to employees on the results of the meetings, as applicable

Timeline
EP System Open for Feedback May 17=20
PEP System Closes for Feedback June 9=20
Feedback Collection/Initial Employee May 17-June 12
Discussions =20
Global Functional Review Meetings June 12-June 16
ENA Business Review Meetings June 12-July 25
ENA VP Pre-Ranking Committee Meeting July 7
Enron Executive Committee meeting July 31-Aug. 1