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  It It Wt 114 Wk. TA IL V; rMa 'Ri

  -9: env
0

Final .Results

Enron Management Conimittee Comments

September 6, 2001

1i
0
0

EXH063-00357

ENRON EMPLOYEE

SURVEY LAY IT ON THE LINE

GOVERNMENT
EXHIBIT
  4126
  Crim. No. H-04-25 (S-2)


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Page 2 of 90
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Management

Andy Fastow
Dave Delainey
Greg Whalley
Janet Dietrich
Jeff Shankman
Jim Fallon
John Lavorato
John Sherriff
Ken Lay
Kevin Hannon
Louise Kitchen
Mark Frevert
Mark Haedicke
Mark Koenig
Mike McConnel
Rick Causey
Stan Horton
Steve Kean

Ray Bowen
Michael Brown
Jim Derrick
Ben Glisan
Jim Hughes
Jeff McMahon

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  EC2 000046236

EXH063-00358


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Andy Fastow

Response

  1) The historic compensation for commercial management and origination encouraged taking undue risks while
at the same time allowing them the ability to approve their own transactions. This was truly a self serving
environment with no accountability. Many of these managers have leftifired from Enron. (but much wealthier at
Enron's current employees and shareholders loss). The centralized Risk Assesment and Control process was
and Is still a joke compared to other financial institutions with similar risk profiles. Senior Management held
/holds this group out to Wall Street as an empowered separate control function. It is still not empowered or
separate from the Influence of the commercial side of the Company. If you go back to 1998, and part of 2000 RAC was not able to turn a deal down nor was it given the appropriate time to even review a
  transaction. Fair value accounting and aggressive mark-to-market treatment has put Enron in the position its in
today(E.l. assets, merchant portfolio, EES problems). Enron should separate and further empower RAC's
Impact on transactions. If RAC turns a deal down it should not go through an ENE Office of the Chairman for
approval. It should go to a broader management committee for approval. Again, If executive management can
not say no to a transaction for what ever reasons (Immediate earnings needs, then the process is self serving).
I believe If you address this area coupled with the Incentive compensation of the company, you will make
inroads in establishing credibility with Wall Street and the financial institutions. They are knowledgable of our
problems more than we think.
  2)1 believe Internal empolyee morale and the PRC are directly linked. The PRC process has been a negative
particularly when mid year feedback is given on August 31(this year) and year-end PRC starts In November.
Last year my Mid year review was two weeks after my year end PRC review process started. What a Joke. I
also believe there is a class/benefit issue of commercial-commercial support that exslsts. Front line commercial
winners receive the benefit of supporting personal and systems that provide a franchise to transact around.
There needs to be balance in recognising who creates value for Enron. Moving people around is healthy but
what has occurred over the last 2 years is a big negative. We have lost slot of good people and lost credibility
on campus.
  3) 1 still do not understand what sr. management and the baord was thinking when allowed Andy Fastow to
establish UM. Do we think we are beyond approach? This was clearly a conflict of interest) I'm concerned that
the Board, Sr. Management and Andy did not think this was a conflict, anticipate the disclosures and resulting
fall out. This was another example of Enron's self serving environment
  4 )At some point Enron will need to focus on quality earnings and not 125 transactions or aggressive long dated
commodity deals which we hold all the controls on. This type of activity should not be encouraged. It should be
an extreme event.
  5) if Enron is going to Invest capital in companies or buy companies it should be done with experienced
Investment people with years of real successful experience. Not in experienced people that have never made
an investment or run a company before. Also hold them accountable and compensate them when the value is
realized.
  6) This organization has no idea on cost cutting or the concept of prudent spending. We talk about it but do little
about It. Unless of course we need to terminate an entire company or group. Healthy operating groups are not
challenged to be efficient or cost focused. Offsites, daily catered breakfast, redundant groups, moves,
  remodeling the list can go on and on. Every dollar we save from excessive spending can go to the bottom line!

+i I don't think we have really had a forum for employees to share their Ideas with management on different topics-
like the committees we had atone time. Cindy Olson was always listening to what employees are saying and
asking people to serve on committees to enhance change. We haven't done much of this lately.

  I don't think we really embrace the vision and values at Enron - we talk a great gains, but we don't walk the
walk. We reward and promote people based on the risks they take and the money they make for Enron, but we
consistently promotp people to high levels within Enron who treat others like trash. Several of them are on the
management comnittee- Whalley, Kitchen, Koenig (& Rieker), Lavorato, Shankman. It really sends a loud and
clear signal to the rest of us, it is not that the aforementioned aren't extremly smart, talented and great for this
company, but they aren't the "whole package". Ken Lay has never treated any employee disrespectfully, but he
continues to promote people who do. I think this says something to everyone about how differently this
  company will be run following his departure.

I also question many of our business ethics and it makes it very hard to work for this company and defend us to
ThIt"1rr;s, Sept rnbrr R6, 28 C2 000046237 Page I of 88

EXH063-00359


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Page 4 of 90
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Andy Fastow

Response
others. I think we play too much In the gray areas. I don't think we are wrong In the California situation, but It
certainly makes me wonder what I don't know. I can't defend us when I know we pride ourselves on bending
the rules to meet our needs. 1 question Fastow and the LJM deal. I realize that it is legal, but I think It walks at-
ethical line when out CFO personally profits from an Enron deal like that. It warrants external attention.

I think we need to take a look at the way iR has handled our stock price drop. I don't think our'logistics
company" message has worked AT ALL. None of us even understand it, so I don't know how anyone else can
not customers, not analysts, not the media.

We really have some good guys here at Enron too- Frevert, Sherriff, Kean, McConnell, Horton... they work hart
and follow the vision and values.

I think the issue is that if we aren't ALL going to follow the V&V, then just get rid of them and quit touting them.
Be clear with what the rules are to move ahead In this company.

A

U

  i
7
  I
T ursd0r, September 06. 2001

  ' EC2 000046238

Aag,

EXH063-00360


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I
  Dave Delainey
Response
  .fir .. r fir"^~i +..r~wrrr
  t Compensation needs to be linked to longer term performance where appropriate (originators get some of _
origination up front, but the bulk of It based on the performance of the transaction they originated over a couple
years) -

I Need at least a rudimentary risk system built and functional for all new businesses. Make sure there Is a real
check and balance (EES had a risk group on paper before Delainey, but due to management make-up of
I origination skills, It was not functional)

  inside morale and outside confidence will easily follow if other Improvements happen.

I
  i Of my many years of service at Enron, 2001 has been the most challenging and disappointing. After the
announcement of the new vision and reorganization, the EES organization was held hostage for over six
months while management decided how to deploy this'new organization. All past history and good ideas and
work are regarded as "the spawn of the devil child". I want to state that I know that Dave Delainey has the right
idea for the company, but the execution of his vision has been tortuous and inhumane. Rather than
determining in March that we needed to make reductions and taking immediate action, management hid behind
the PRC system and dismissed employees for performance.

  The. PRC was nothing but a good old boy system at it's worst. It was nothing more than a rubber stamp of the
I perception of our abilities by the new organization.. My review stated nothing of my feedback or
  accomplishments but rather made vague statements that provided neither guidance nor objectives. It appears
that the people who have nothing better to do than showcase themselves to their management succeeded
I while those who actually kept their heads down and worked were pushed into the lower categories. I believe in
meritocracy but it should be based upon actual results not someone's perception of personalities.

  Senior management, specifrcaSy Even Hughes, has been extremely unprofessional and insensitive to the major
I changes that have occurred. Evan stood up in a meeting of over eighty people and said verbatim: "If you don't
like It, leave." I do not believe that this reflects Enron's vision or values.

  In January 2001,1 was one of Enron's biggest cheerleaders. I could not say enough positive words about our
vision, our employees and my job. In August 2001, I am contemplating how high the stock has to go before I
can exit. This change in attitude saddens me,
  In light of our published "values" respect is one of the major challenges our management team should
concentrate on. While I did not select the disparity between commercial and non-commercial as a top 5
challenge, some of our lower level commercial managers (Director thru VP)could utilize a bit of humility.
Those who have excelled and are excellent role models include Mark Frevert, Dave Delalney, Mike McConnell
I and Janet Dietrich.
  Our employee benefits implementors could use improvement, it's difficult to get the right answers at the right
time when one needs to make changes outside of open enrollment.

  dr After seven years at Enron, I am saddened to share that I have been contemplating leaving Enron after the
hellish EES reorganization. Enronians were treated
  with little to no respect during the redeployment/reorganization process. While I strongly agree with Dave
IDelainey's vision for the future. I believe that
  the treatment peopl have received has been unacceptable and counter to the Vision and Values Enron
proudly displays in the lobby. The morale here is at an all time low and it's become an incredibly depressing
place to work.

  I My hope is that Ken and the new management team will rescue us from the abyss. Save us!

  L, C2 000046239

9 77iunday, Sepfemher 06. 2001

Page 3 01 88

EXH063-00361


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r

r

r

I

I

I

r

r

r

r

Greg Whalley

Response
1. I think Jeff Skilling's biggest problem was That, despite all the media blitz, he was not a charismatic leader,
like Ken Lay, Lee iacocca, Herb Kellerman. Enron used to have VERY charirnatic leaders that the employees
loved like Ron Burns and Rich Kinder. There are no longer leaders of that ilk here in Enron. External
customers would hear Ron Burns speak at industry functions and call to say "I want to work for that manl" Jeff
Skilling could not engage that charisma with the media or with the employees. Greg Whalley is even worse.
I've worked with that man for six years. He is mean-spirited and hateful to employees. I have seen him be
mean just for sheer enjoyment. He has no charisma, In fact, outside pears have commented on his nastiness
to customers and employees alike. I think you're moving in the wrong direction by selecting him.

  Furthermore, something must be done about PRC. It does nothing but demoralize and produce the aggressive,
nasty environment that makes most employees leave. First, it undermines the first line manager, who may feel
the employee Is doing a great job. Second, while it may produce the competitiveness that Enron strives to gain,
it also produces an aggressive, back stabbing, unconstructive environment that Is too difficult for most people
  to exist in. (In short, only the nasty survive()

Finally, I work In risk management. I have seen VP's and trading directors make up a number, call down to the
risk managers and say, this is what I want to report today. Move the curves to make it that way. I have seen
directors tell traders to move curves In outmonths to generate income that the traders did not believe was real.
I have seen traders leave Enron because Enron tampered with the "ethics" of the curves, and I have seen the
trading directors deride traders who tried to stand up to his ethics. I have seen trading directors instruct book
personnel to boost volumes on long term deals that aren't there to generate quarter earnings, only to have to
reduce those actuals later down the road. It's unethical, and as a stock holder, I can understand industry
skepticism.

  1. Stop rewarding people for doing HORRIBLE deals (Pal-EES,Rice-Broadband, Whalley-Metals, Sutton-
Dabhol, Mark-Azurix, etc.), and spread that compensation around the company to lower level employees,
2. Be more straight forward with our earnings to the analyst community.

  3. Give the pipeline group some credit for what they've built, maintained and grown through the years.
.0 t believe the biggest problem we have at Enron -- and one of the top reasons why morale is so low -- is the lack
of values in our management. I think Ken Lay lives the values, but I don't see the same commitment in other
management members. For example, some of the worst abusers of our values are on the Culture Committee --
like Beth Tilney and Dennis Vegas. How can we trust management when the very people that are positioned to
live our values are the worst offenders? I have to also say that Greg Whalley scares me for the company. While
I'll give it to him that he's brilliant, I can understand why the stock went down after that announcement. I am,
however, thrilled to have Ken back at the helm again.

 First, I think selecting Greg Whalley as a replacement is a terrible mistake. He's a mean-spirited, foul-mouthed
man. Enron employees hate working with him and I can't imagine that he would Improve Enron's reputation of
being overly-aggressive. In fact, he Is the poster-boy for all the bad things said about Enron. This needs to be
rethought I know he Is a brilliant man - he just is not a leader. He had no personal. charisma that inspires
leadership.

  Second, the PRC needs to be eliminated. There HAS to be a better way to award bonuses that demoralizing
employees and undermining first line managers. PRC just creates a hostile, mean-spirited environment by
overly-aggressive em loyees who step on nice, ethical people. (it's alot like the elevators. Aggressive people
will walk up from the black and step in front of people who'd been waiting a long time. Most polite people don't
object but they end upstanding in the lobby. It's symbolic of what the PRC Is like. Are the aggressors that
push past everyone better workers and deserving of more bonus money?) Like President Bush said, "We need
a kinder and gentler Enroo". People no longer want to work here because of the aggressive, hostile
environment and the only people who stay (and thrive in this environment) are mean-spirited people.
 Some people in senior management positions may be good at the deal, but have little leadership ability (e.g.,
Jim Fallon, Greg Whalley, Kevin Hannon) while the true leaders go unnoticed (e.g., Stan Horton, Rob Walls,

rnvln,1n Sepirntherms, 21)01 EC2 000046240 Page 4, f,qs '

EXH063-00362


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Greg Whalley

Response

Mary Joyce). . - . . .

  I don't think we have really had a forum for employees to share their ideas with management on different topics-
like the committees we had at one time. Cindy Olson was always listening to what employees are saying and
asking people to serve on committees to enhance change. We haven't done much of this lately.

I don't think we really embrace the vision and values at Enron - we talk a great game. but we don't walk the
walk. We reward and promote people based on the risks they take and the money they make for Enron, but we
consistently promote people to high levels within Enron who treat others tike trash. Several of them are on the
management committee- Whalley, Kitchen, Koenig (& Rieker), Lavorato, Shankman. It really sends a loud and
clear signal to the rest of us. It is not that the aforementioned aren't extremly smart, talented and great for this
company, but they aren't the "whole package". Ken Lay has never treated any employee disrespectfully, but he
continues to promote people who do. I think this says something to everyone about how differently this
company will be run following his departure.

I also question many of our business ethics and it makes it very hard to work for this company and defend us to
others. I think we play too much in the gray areas. I don't think we are wrong in the California situation, but it
certainly makes me wonder what I don't know. I can't defend us when I know we pride ourselves on bending
the rules to meet our needs. I question Fastow and the UM deal. I realize that it is lull, but I think it walks an
ethical line when out CFO personally profits from an Enron deal like that. It warrants external attention.

I think we need to take a took at the way IR has handled our stock price drop. I don't think our "logistics
company" message has worked AT ALL. None of us even understand it, so I don't know how anyone else can-
not customers, not analysts, not the media.

We realty have some good guys here at Enron too- Frevert, Sherriff, Kean, McConnell, Horton... they work hard
and follow the vision and values.

I think the Issue Is that if we aren't ALL going to follow the V&V, then just get rid of them and quit touting them.
Be clear with what the rules are to move ahead In this company.

EC2 000046241-

Thr+rs'l(tr, September Th. IDAI

Page 3 of 88

EXH063-00363


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Page 8 of 90
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.t

  r
i
w
N
i
i
r
i
r
i
i
r
r
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i
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Janet Dietrich
Response

0 In light of our published "values" respect is one of the major challenges out management team should.
concentrate on. While I did not select the disparity between commercial and non-commercial as a top 5
challenge, some of our lower level commercial managers (Director thru VP)could utilize a bit of humility.
Those who have excelled and are excellent rote models Include Mark Freverl, Dave Detatney, Mike McConnell
  and Janet Dietrich.
  Our employee benefits implementors could use improvement, it's difficult to get the right answers at the right
time when one needs to make changes outside of open enrollment.

Ti mrphr, repfer, ar, 06.2001

EC2 000046242
Pays6of88

EXH063-00364


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Page 9 of 90
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Jeff Shankman

Rcspass~
  t)
  1 don't think we have really had a forum for t mployees'to share their ideas with management on different toplcs-
like the committees we had at one time. Cindy Olson was always listening to what employees are saying and .
asking people to serve on committees to enhance change. We haven't done much of this lately.

I don't think we really embrace the vision and values at Enron - we talk a great game, but we don't walk the
walk. We reward and promote people based on the risks they take and the money they make for Enron, but we
consistently promote people to high levels within Enron who treat others lIke trash. Several of them are on the
management committee- Whalley. Kitchen, Koenig (& Rleker), Lavorato, Shankman. It really sends a loud and
clear signal to the rest of us. It is not that the aforementioned aren't extremly smart, talented and great for this
company, but they aren't the "whole package". Ken Lay has never treated any employee disrespectfully, but he
continues to promote people who do. I think this says something to everyone about how differently this
company will be run following his departure.

I also question many of our business ethics and It makes it very hard to work forthis company and defend us to
others. I think we play too much in the gray areas. I don't think we are wrong in the California situation, but it
certainly makes me wonder what I don't know. I can't defend us when I know we pride ourselves on bending
the rules to meet our needs. I question Fastow and the LJM deal. I realize that it is legal, butt think it walks an
ethical line when out CFO personally profits from an Enron deal like that. It warrants external attention.

I think we need to take a look at the way IR has handled our stock price drop. I don't think our "logistics
company" message has worked AT ALL None of us even understand it, so I don't know how anyone else can-
not customers, not analysts, not the media.

We really have some good guys here at Enron too- Frevert, Sherriff, Kean, McConnell,,Norton... they work hard
and follow the vision and values.

I think the issue is that if we aren't ALL going to follow the V&V, then just get rid of them and quit touting them.
Be clear with what the rules are to move ahead in this company.

LrC2 000046243

Tlrnrsdm, Sepreinher 04. 21101

PaRe 7 of RR

EXH063-00365


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Page 10 of 90
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.L_ - -

  I
  Jim Fallon

   Some people in senior management positions maybe good at the deal, but have little leadership ability (e.g.,
Jim Fallon, Greg Whalley, Kevin Hannon) while the true leaders go unnoticed (e.g., Stan Horton, Rob Walls,
Mary Joyce).

  r

  FC2 000046244

7-11undr!r. sepren hey na. 200?


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John Lavorato

Resnnnse

  t am currently In redeployment and have felt like I have been able to get an interesting view of the company
currently, having had discussions at all levels of the the company and most every major group. What I will lay
out is the current view of Enron which was assembled over the last month. The conclusion I came to may be
obvious to many, but was a learning experience for me. The discussions were had under the auspices of
looking for a senior origination position for a person with a 17 year background in the gas power business from
the trading and finance side. All I have talked with feel that we are a very different company than we were two
years ago (which was when I started at Azurix). The thought right or wrong is that the orginal core group that
made Enron what it Is is today made their money and have left one way or another. The new group is very
bright, but currently doesn't have the strategic capabilities that others had before them and there has been a
large gap left by Jeff leaving. Related to skill sets it is felt that trading Is very much the earnings driver for the
company albeit traditional and strucuctured trades, and no one can equal our market information. Although for
this reason, in Enron North America originators have had to take a distant back seat to the traders based an the
relative earnings each has made and will make this year which is supported by Kithcen and Lavorato and isn't
surprising based on their trading backgrounds. If you want to do origination the groups to look at are EES and
EOM, and the need for origination still exists although it is hard to compete with the big profits trading is making
on a corporate wide basis. We also preach being entre/intrapreneurial and taking risk, but the time from for
how much risk one can take doing that has shrunk to the length between PRC reviews e.g. 6 months. The
message Is If you don't have a long history with the company, but like building businesses stick to startups you
can make money for within months or you are at risk. In PRC reviews the more _senior you get it is all about
dollars brought in and all else has minimal impact. It reminds me of my Marine Corps day when the success
of the mission (e.g. MTM value obtained) was all that matter and casualties sufferred along the way were
expected. I don't feel that any of this is necessarily bad, but rather is the state of where we are today compiled
from one persons perspective. I very much feel that Enron Is a great place to work for those who thrive in the
environment we have established, and I expect to be In a new group within the next few weeks. I am optimistic
about the companies future and our ability to overcome'this down period. In general it appears we have gotten
a little more Darwinistlc at least in the front office over the past few years, and therefore if that was the intention
then we should embbrace it and recruit accordingly. If not then change will come by design or by default.
  Either way I think we are all happy to have Mr. Lay back. I would be happy to expand further if helpful David
Pruner 713-646.8329.
  I don't think we have really had a forum for employees to share their ideas with management an different topics-
like the committees we had at one time. Cindy Olson was always listening to what employees are saying and
asking people to serve on committees to enhance change. We haven't done much of this'tatey.

i don't think we really embrace the vision and values at Enron - we talk a great game, but we don't walk the
walk. We reward and promote people based on the risks they take and the money they make for Enron, but we
consistently promote people to high levels within Enron who treat others like trash. Several of them are on the
management committee- Whalley, Kitchen, Koenig (& Rieker), Lavorato, Shankman. It really sends a loud and
clear signal to the rest of us. it Is not that the aforementioned aren't extremly smart, talented and great for this
company, but they aren't the "whole package". Ken Lay has never treated any employee disrespectfully, but he
continues to promote people who do. I think this says something to everyone about how differently this
company will be run following his departure.

I also question many of our business ethics and it makes it very hard to work for this company and defend us to
others. I think we play too much in the gray areas. I don't think we are wrong In the California situation, but it
certainly makes me wonder what I don't know. I can't defend us when I know we pride ourselves on bending
the rules to meet our neqds. - I question Faslaw and the UM deal. I realize that it is legal, but I think it walks an
ethical line when out CFO personally profits from an Enron deal Ike that. It warrants external attention.

I think we need to take a look at the way IR has handled our stock price drop. I don't think our "logistics
company" message has worked AT ALL. None of us even understand it, so I don't know how anyone else can-
not customers, not analysts, not the media.

  We really have some good guys here at Enron too- Frevert, Sherriff, Kean, McConnell, Horton... they work hard
and follow the vision and ,slues.
  EC2 00004624.5
Thw s.Say. Srprs!m1Mr i $, 21M, Pave 9 n/88

EXH063-00367


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Page 12 of 90
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John Lavorato
Rcs arse

  i think the issue Is that if we aren't ALL going to follow the V&V, then just get rid of them and quit touting them.
Be clear with what the rules are to move ahead in this company.

  i

Tharril .r. September 06,1001

  EG2 000046246

Page 10 of.%

EXH063-00368


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Page 13 of 90
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I
  John Sherriff
Response

  I don't think we have really had a forum for employees to share their Ideas with management on different topics-
like the committees we had at one time. Cindy Olson was always listening to what employees are saying and
asking people to serve on committees to enhance change. We haven't done much of this lately.

1 1 I don't think we really embrace the vision and values et Enron - we talk a great game, but we don't walk the
  walk. We reward and promote people based on the risks they take and the money they make for Enron, but we
consistently promote people to high levels within Enron who treat others like trash. Several of them are on the
I management committee- Whalley, Kitchen, Koenig (& Rieker), Lavorato. Shankman. It really sends a loud and
  clear signal to the rest of us. It is not that the aforementioned aren't extremly smart, talented and great for this
company, but they aren't the "whole package". Ken Lay has never treated any employee disrespectfully, but he
I continues to promote people who do. I think this says something to everyone about how differently this
company wilt be run following his departure.

  I also question many of our business ethics and it makes It very hard to work for this company and defend us to
others. I think we play too much in the gray areas. I don't think we are wrong In the California situation, but it
certainly makes me wonder what t don't know. I can't defend us when I know we pride ourselves on bending
the rules to meet our needs. I question Fastow and the UM deal. I realize that it Is legal, but I think It walks an
ethical line when out CFO personally profits from an Enron deal like that. It warrants external attention.

  i think we need to take a look at the way IR has handled our stock price drop.  I don't think our "logistics
company" message has worked AT ALL. None of us even understand It, so I don't know how anyone else can-
not customers, not analysts, not the media.

  We really have some good guys here at Enron too- Frevert, -Sherriff, Kean, McConnell, Horton.. they work hard
and follow the vision and values.
  I think the Issue is that If we aren't ALL going to follow the V&V, then just get rid of them and quit touting them.
Be clear with what the rules are to move ahead in this company.
 4 2 things I don't like about Enron 1. There is a lack of 'doers.' From my view the company is full of talkers and
salesmen - these are Important, but we are overrun with them. 2. John Sherriff talks about being both 'loose'
and 'tight' to allow flexibility and yet retain control. I don't see enough of the fight. Systems and procedures are
not bad things when applied appropriately.

I

I

r

I

r

  -CZ 000046241

I ThnrriMr, September IM 21101

rage 11 of RR

EXH063-00369


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r

Ken Lay

Res olt~ , sue..
  - .~  u I rrr~.~~r rrr. ~~~~r~wirl/rr,~r1 u~r~+r~wr~ 

  i I am very please that Mr. Lay is back.

  I came from a Big 5 environment where evaluations were also key to the organization for promotion,
compensation and work assignment reasons. I participated In our evaluation committees every year and also
was part of an executive team involved in the redesign of the program. Following are class where I clearly
believe that our system was superior:
  - We also had a 1 to 5 rating; however, our bell curve did not require forced rankings for 4 and 5. The thought
was that underperformers would be coached out so they should not be included in the bell curve. Many of
Enron's 4's are good performers that just got forced into that rating because we had to meet the curve.
  - Also, we had 2 different bell curves at my former company, I for managers and above and the other for staff
below that level; the thought was that for managers and above we would expect more 1's and 2's as they had
generally been with the company awhile and had developed into very strong performers (others had been
weeded out along the way)
  - The other system also had skill sets laid out for each level In the organization broken out by 5 main areas
(communication, technical, Industry expertise, people development, and client service). For each of the 5 main
areas, there were a number of skill sets that the employee had to acquire before helshe could advance. Using
this system, we were able to help coach people on what skills they needed to advance to the next level.
  - Enron's system goes through full evaluation twice a year however there doesn't appear to be any value add
from the mid year review; my former company's mid year review was used to identify poor performers and help
get them back on track and to identify superstars to help ensure they were given the opportunities needed to
get promoted to the next level by year end (this process Is a lot less time consuming but does have the value
add because we were not as Interested in rating each invidual at mid year)
  - the "class system" (commercial vs commercial support) makes the PRC function less meaningful because
even those in commercial support who are closest to the commercial group fare best in the PRC
  - finally, I was discouraged by the most recent PRC process because after the process was over I heard that
the VPs in our group had met prior to any of the PRC meetings and preranked everyone in their 3 groups; there
was even a spreadsheet that one of my peers had that showed where everyone fell out; why go through having
all the meetings if there are going to be prerankings?

0 Over the past year or so, I have had much less autonomy in performing my work and feel that management and
peers are attempting to micromanage the work that I have been doing, successfully and more or less without
much oversight, for 14 years. It wastes resources, lime and money, when I have to explain to a half dozen
people why we should do things I used to just be able to do, and I don't see that it has helped the process. And
while I have been pressed to communicate my activities to our group and to others outside the group, it seems
to be a one-way street. Those asking for the Information are not sharing any with me!
  And on the subject of communication, one thing that makes it very difficult for me to share information (l am in
government affairs) is the impossible task of keeping up with the commercial folks, who they are and who
supports them. There are no notices when folks change responsibilities and no org chart to see who might be
interested in events In -a certain region or on a certain utility system. I have to put tags on all my smalls "please
send to others who might be interested" because I have no way of keeping track of who they might be.

  I would check the staffing levels in government affairs. I think the recent movement to less autonomy is a result
of having perhaps too many people deployed with not enough to keep them all busy. There seems to be more
and more overlap of responsibilities, with confusion and Internal politics becoming more prevalent. And we
should review our use of outside resources.in this group, and reward folks who find ways to accomplish things
without heavy retiance on outside counsel and experts.

And in gov alfairs~ we seem to have a hard time setting priorities. One day, a particular state may be taken off
the list of slates we are active in, ahd the next day I will gel an urgent phone call asking what is happening there
because we have some big project we want to do there. We need much better coordination in deploying our
resources and setting our priorities and goals. It is very hard to respond to requests for information about states
that we have stopped following, or to jump back Into the fray in a state we had abandoned. Decisionmakers
tend to discount your position if they don't think you are a long-term player in that arena.

  Finally, on the PRC, I have seen this system destroy morale, my own and that of my colleagues, even when a

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  fairly decent review is given. I think we all welcome feedback, the problem Is the forced ranking of people-
against one another. Particularly in gov affairs, your ranking is often the result of how "sexy" and visible the
projects you are working on are. Not everyone can be involved In California, and those who were working on
other assignments that are more mundane seemed to suffer for lack of visibility or blowing their own horns.
Some of us are attorneys, others more like lobbyists and others "number crunchers." Our skill sets and
assignments are so different that comparing us and ranking us against one another is meaningless. Keep
reviewing us but lose the forced rankings.

  We have also seen promotions of folks who are not team players, and the message we dearly have received is
that self promotion is effective, team playing is not
  1. Upper management within my business unit is constantly changing their mind on how they want to have
information presented. Because of this, my group spends a tot of valuable time "rearranging" the same old
information instead of analyzing data and Improving processes.
  2. One way to increase Internal cost savings would be to plan better for costly employee moves. I know of
several groups who have moved three or four time within the last six months. If a little more thought were put
into these changes, we could probably reduce the number of times employees move and save a lot of money
on churns.
  3. Glad Mr. Lay is back!!

+al0 Enron has lost It's spirit. That comes from the heartbeat of the employees. The employess are confused and
frustrated. They work hard and then are crushed by a true casting system with the PRC process which Is not a
true evaluation of their work product. It can't be when you are not comparing like job responsibilities and
  duties. Enron computer systems are fragmented. There is too much emphasis put on find your answers on
line. What happened to people talking to each other? There is no consistency in policy and procedures. There
is a mentality that you must work late hours and weekends to be perceived as doing a good job. Managers and
Supervisors are confused about giving good feedback to their employees prior to PRC. The reality is that
employees can be doing good work and right on target with what they are supposed to be doing
  but when they are compared to other departments and different job responsibilities the become lower ranked.
Performance Management is important and a necessity. Here at Enron It creates conflict, jealousy, distrust and
a host of other work environment issues. Someone with really big arms needs to reach out all around Enron
and bring It back home to a good place to work with values and integrity in tact.

  Realignment of incentives (noted above as my #1 concern) The tremendous pressure to generate earnings has
created a culture that rewards commercial people for dosing deals where immediate earnings can be marked.
Once the Income is taken there is little incentive for the commercial people to diligently stay with the transaction
through successful execution. We have seen many examples of this In the international asset portfolio as well
as our domestic investment portfolio. We have also seen examples of this in the commodity side of the
  business where income has been marked without appropriate followup to execute proper contracts. The
solution is to change the compensation structure to pay commercial people the majority of their bonus upon
successful execution or monetization of the transaction not just closing the transaction and taking a MTM write.
up.

~i 1. A number of years ago, I remember you (Mr. Lay) addressed, at an all employee meeting, the criticism of the
"oil Industry" of our use of Mark-to-Market accounting. I was very Impressed with your answer, you said that
there were three important points: (a) we are not an oil company. (b) other industries use M-to-M accounting, so
we are not atone, and most importantly (c) there is very little risk because our average contract M-to-M'ed is
only 18 months duration. Being a PHD In Economics I am sure that you are aware that the EES 10, 15 year, or
more, contracts (hat were M-to-Wed are a huge risk for Enron and that sort of accounting needs to stop with
respect to all future long-term contracts. M-to-M accounting is fine for short-term trading contracts but results in
an inappropriate risk for both the long-term power sales contracts and EES deals.
  2. I applaud the diversity of your selections for the office of the chairman. But you need to also add someone
with a true technical background. Enron was about to become a Harvard MBA playground. A May/June 1995
Journal of Management in Engineering article: HARVARD HINDSIGHT stated the following: "...people
with...MBAs have a penchant for hot, high-paying bareers that ...turn Into the next Investment Titanic, They
rushed into investment banking in the mid-80s & pharmaceuticals in the early 90's. Both... soon suffered

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  declines. Industries... winning the high-priced bidding war for todays Harvard MBA should be viewed with
caution. At the top of this fist, attracting 30.9% of Harvard MBA 1993 graduates is management consulting.
Entertainment and media are also in the midst of MBA hiring spikes. Thus, if tradition holds true, those sectors
will begin to decline... It was also reported that the fewer MBA holders attracted to an industry, the better its
performance. Computer systems, for example, have seen a decline in MBA hMng matched with an.increase in
return (well, remember this was a 1995 article and no one prevent business cycles). The energy sector hit a
high when their MBA hiring bottomed out."
  3. 1 am sure that you (Mr. Lay) and the Enron Board know that Enron senior management compensation In a
number of circumstances has been far beyond the contribution of that senior management to the earnings
growth of Enron. Even though Skilling brought a lot to Enron, he was a classic example of a person promoted
beyond their level of competance as his personality was clearly not suited to CEO or Chairman (where
stockholder interests are important). I have never seen a brighter more destructive personality. We do not
resent your compensation Mr. Lay, nor even Skilling's past compensation. We assume that neither of you got
Individual project bonuses. But L. Pal, J. Sutton, Rebecca Mark. Ken. Rice, and others received compensation
in 2000 that far exceeded any earnings directly attributable to their performance. It has been a huge
embarrassment to see' persons like those being hugely compensated due to position and/or for bringing In bad
deals. Some received huge bonuses for their ability to hide the facts from upper Management and the Board
until it was too late. That is the principle reason that we have $bilt#ons In international, assets invested in projects
that are returning 0%. Too many upper management people have been working for too many years within
Enron for their huge personal project bonus and, therefore, not working for the good of Enron's earnings. The
compensation of the Enron's business unit leaders must be based on solid contributions to earnings growth
(and not greater than that earnings growth for example L. Pat), not risky, one-off M-to-Wed contracts. Business
unit leaders should not get project a bonus.
  4. Mr. Lay, you certainly must be aware that the current accounting practices make asset ownership worse over
time. If not, you need to look into it because returns.on assets get worse over time if they are not allowed to
normally depreciate. There has been too much bending over backward to create quarterly earnings while
sacrificing longer-term earnings. I am sure that you recognize that a balance of trading and quality assets will
regain our credibility with the analysts. Achieving quarterly earnings targets, with one-off asset sales was not as
big an Issue with the analysts when we were constantly developing new assets to replace them. Clearly Kinder
Morgan demonstrates with their 11% return on KMI equity that you can get good returns with good assets, if we
could get there (11%) with assets and add trading earnings on top of that, we could blow the competition out of
the water. Have you and Rich Kinder talked about merging and then being co-chairmen for a year. That would
be the quickest fix I can imagine for our credibility with the analysts.
  5. Mr. Lay, you need to modify the compensation of traders. I know someone who has done trades with Enron.
When It came time for the trade to be rolled over or expire, that person would have been happy to roll over the
deal but the trader let it expire. The new deal was worse for Enron, when asked why the trader did that, the
answer was, I get compensated for new deals not maximizing the benefit to Enron.
  6. You must be aware. of the devastating impact that a 1S% forced ranking system has on moral. In addition to
the 15% devastated by their mid-term rating of 5, there has to be at (east another 15% who feel that but for the
grace of god I would have been ranked a 5, what does that do to their moral. Yes, we need to get ride of some
persons but the arbitrary and capricious method of ranking 2 or 3 aetual performers a 5 to meet the quota is the
craziest scheme I have ever hard. Walk-the-talk about the quality of the employees that we have here at Enron
and take quick decisive action to change this system before It is too late.
  Ah, Mr. Lay, you have many challenges, but I know that you are up to It. You are wall on the road to diversity of
Enron's upper management (experiencelbeckground) which wIll help you open communicbtion, improve
integrity, enhance respect and bring us back to excellence.

  This can be the best of 4ompanies and the most cannibalistic of companies... it a titanic-sized airplane that
attempts rapid course changes and movements at every hourly weather report. The pilots,(managers) ARE
then THE "lifeline" to everyone, and they simply have not even attempted to advise their "valuable"
  (consensus - inside and outside Enron is really'VERY EXPENDABLE") employees of ,a course change. etc.
So,... the corporate reality is that the injured and dying "passengers" are "collateral damamge". Lipservice or
ambivolence ("aid" by HR) may be "aired" (ONLY), and the "healthy soldiers" are ordered to stay focused on the
"war" - no time for other team members - there is a WAR ON[ And, the "Enron Army" is further established with
our glorification of "The Weakest Link" PRC model reaching new heights yearly.  rankly, it #s to a new level of

Tibundnr, September (h.. 2(101

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company sickness that "The Devil's Advocate" would admire... The clock Is ticking here... We're en example of'"
ruthlessness:.. The new term out "Enron: Heartless Possibilities" is eamef and out!

I think you'd get about 70-85% agreement on the above analogy.

Personally,... we're hoping this really is "Return of the Jedi" that people are calling Ken's return (vs. Empire
Strikes Back - under $kilifng)... We not truly need to hear it vs. spend wasted time discussing which class action
suit was listed in the Chronicle this month regarding Enron's PRC injustices (and should we consider it - or be
forced to think about it based on today's PRC fear management result)... I'll finish by saying that rye never been
at a company where so many peolple worked so hard and felt equally devalued...

i Its not fair to not receive a mark or a bonus, after you have jumped thru all the hoops and someone else has
taken credit for your work.
41 As background, my name is John Carlson and I work for EES In the Midwest Region out of Kansas City.

In short, I feel I am not being given a fair opportunity in regards to education assistance and tuition
reimbursement. I was recently accepted to the University of Chicago part-time MBA program (same exact
curriculum as the full-time programs except we have two classes every Saturday). I chose the weekend
program so it would not affect my work at Enron, to hopefully add more value to my work at Enron, and
because I live In Kansas City and have to travel to Chicago. To clarify, this is NOT an accelerated or executive
MBA program. This is the standard MBA that the University of Chicago offers.

Senior management has since denied my request for reimbursement. Here are some of my concerns:

1. EES policy states that "immediate supervisor. In conjunction with Human Resources, is responsible for
approving course application and ensuring compliance with this policy." I, however, was told I had to have
senior management approval for tuition reimbursement.

2. EES policy states that programs for reimbursement "must either qualify an employee for present duties or
prepare an employee for future placement within the company". As one reason for denial, I was told the MBA is
not a prerequisite for the next two levels of promotion above my current level. I am not pursuing this degree to
further my current position, but rather to open other avenues within Enron and add more value to Enron.

3. Given Enron's track record for having one of the best talent pools in corporate America I was surprised and
very disappointed with the decision not to help. I think EES and Enron, given the opportunity, would want to
help a current, high-performing, employee improve their business skills, leadership potential, and job
performance.

I would appreciate anything you can do to help out with this and am willing to discuss this further.

Thank you for your time and consideration.

Sincerely,

  John Carlson
816-880-3571
jcarison@enron.com
0 1. Figure out how VP level people can help the company - there are a lot of us and many of us have turnaround
experience.
  2. The external view of Enron has to change. The last six months of Skilling have damaged severely the
previous 15 years of Ken Lay.
  3. Please don't recreate the "mutual admiration society" mentality that pervaded a significant majority of the
group of senior execs that recently cashed out at $80 a sharem and left the rest of us holding the bag.

T6ur%d, , Sepsr nher 06. 21101

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i I Love working for Enron but t feet that the direction that EES has taken is not good as compared to our past
model. I've worked In this Industry for 10+ years and EES's original business model on bundled deals in my
opinion was un-beetabte. I feel that we could have done a better job as a company controling Internal cost But
since we've changed models and broken up development and construction I feet that we have lost our
advantage and direction. I have no confidence In EES executive managment and the course they have chosen.
I'm concerned since we have been re-aligned into EFS we will no longer be the leader In Energy Services
related EAM arena. Staff morale is low due to slashing of peers even though we know it was necessary. I have
accepted a position with EFS and the benefits for managment such as myself and my partners is significantly
less such as: no options, pension plan In lieu of savings plan, out of pocket insurance cost are higher, no vision
plan etc. It is a variety of things that has attacked morale. Our construction arm of EES has been moved to EFS
and that did not sit well with staff and peers, many of us feel it was a step down. I do however work with some
of the most dynamic people that I have ever worked with in my 20+ years of work experience, I'm afraid that we
will lose some of these key players to the competition due to the direction of EES's present and recently
changed business model. I feel that if the old model was fine tuned and internal cost and procedures refined
there is not a competitor out there that could touch or beat ust We need to evaluate the direction of the EES
ship. At the field level there is so much demand for what we do, if we combine commodity with construction and
services it is unbeatable. yes construction does not carry the higher margins but it is a necessary element In our
offering to client request.

,~ The accounting department needs slot of help. They never answer the phone, no matter who You call and they
never call you back.. The xms system has realty got some problems. We have been having so many problems
with entering an expense report and one or two months later, It still isn't payed because the system just lets It sit
there, Every Invoice we send to accounting takes way to long to get put into the system and then get
  processed, which in turn, our vendors are not getting payed for months. This causes major problems and as a
result, our employees are getting their cell phones turned off and their Amex. payments are being turned In late
with fees. Our end is taken care of right when we receive the bills (they are immedlatly turned in). Can
  something be done to take care of any of these situations?

  t would like to mimte, voutunteer activity here in California to that of Houston. This is difficult because there Is no
community relation staff here that I am aware of. I currently have an Idea to refurbish a Girl Scout Camp In the
San Bernardino Mountains as part of the grant program and to physically implement some of the repairs as
Enron Involved.
  Since Safety was transferred to EFS, the Impression I currently hold is that safety has taken a step back. I do
not know the policy of EFS and whether this policy is any different than the previous EES safety. Is there a
national safety meeting scheduled for the safety group like last year?
  We do conceptual work for Enron depicting a proposed central plant or co-gan plant at various locations and
never receeve any feedback as to the outcome of the proposal, Feedback is important from EES to assist in
future conceptual designs.
  I agree with Ken when he said that Enron needs to get back to "vision and values". I feel respect for each other
has gone way down. The Sr. Admins seem to me either to be under to much stress or they have just gotten all
rude, abrupt and down right disrespectful, mainly the ones in Houston when they call here In Portland. Power
trips are getting old and do not help anyone.

1. Rumour has it there are lay-offs planned for December. Is that still true now that you are back er are we
going to use PRC's to get rid of people again.
2. 1 find It surprising that 45% of Enron is considered a 4 or 5. 1 thought Enron was to hire the best. Is HR
`"Tong 20 - 25% of the time?
3. it you need to decrease the w~ rk force, lay people off rather than use PRC. That would have more integrity.
The stock price can't get too much worse.
4. Support functions are expected to'do what ever it takes' to get a project done. 'That is fine once in a while.
but we try to have lives too, it would be nice if we were given a day off here and there for all the nights and
weekends we have spent here. -

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  1. We are very strong at developing new markets. However, in my view, we are very weak in the
fundamentals - the blocking and tackling of business. We are a deal shop and value getting a deal done. Littk
value is placed on the execution and follow-up. Fundamental economic flaws in transactions are often ignored
or not realized because of the emphasis on getting the deal done.

  2. We must develop a deep bench of senior executives. These executives must be schooled in public
appearance. They must be sensitive to the overall nature of business and the political implications. Outside of
Ken Lay, right now, it appears that we have senior executives that are seasoned traders who have very little
appreciation for things outside of live besides trading. They do not appear to be a well read bunch - i.e., no
appreciation for history, economics, politics, etc. Further, outside of Ken Lay, our senior executives have
limited "presence." The preception of their character and leadership Is lacking. In addition to Ken Lay, we near
to develop leaders that are well respected because of their character, leadership abilities, public Image, etc.
The employee morale has suffered because of such a huge drop In stock
  price. I'm glad to see Mr. Lay put bringing up the stock price back up. As employees we're looking down the
road at retirement. Thanks
  for coming back and bringing integrity back to the top job.

* 1. Little or no respect given to people who did not pass through the Associate program. 2. Less value is given tc
p'pte with business experience and more value is put on expertise in financial modeling. 3. Great technical
people are promoted Into management positions and these in most instances are bad managers. Have a
different grwth plan for these p'ple other than management. 4. Enron has a lot of young management with no
diversified experience. 5. I think Enron has had great successes In getting to the top but in order to stay on the
top it may need to change some of its tactics. What gets you to the top is not what necessarily keeps you there.
We need to learn from the Watmarts or GEs who have been there for a long time. 6. Diversity at all levels all
the way through management, not just'tokens'here and there. Diversity meaning white, black. Asian, young.
old, married, not married etc. 7. Support people are not rewarded, only commercial even though the support are
the ones in most cases who clean up the mess the commercials made and which earned them huge bonuses
and promotions. 8. Comparing commercials with support in the PRC whereas the two have different emphasis.
One is on making money the other is on containing costs or controlling risk.
* Mr. Lay: I'm so glad you're back!!! It warms my heart to know that you will be there for us. Thanks to Linda as
well. She Is a great lady.

$ Another Issue:
  Examine departmental promotion criteria and practices-exactly what criteria is being used to promote certain
individuals as opposed to others. What are the practices/criteria/conditions? Is it longevity, i.e., an employee
has been in service for numerous years & now they are entitled to move to a new job level? Is it judgment-
based criteria? Is it on performance as It Is being touted?....How Important Is innovation and
  creativity?... .Management has often times stated during a PRC process session ....... perception is reality", yet
when promotions have occurred ... the'majority'of the employees remain perplexed as to what
criteria/accomplishment (those) promoted employees actually attained/fulfilled. Would not even some small
part of the reasons as to "why" that promotion was granted (or a ranking of one given)-be 'apparent' to those
promoted employees and those receiving a rank of one as well as to their cc-workers In addition to
management? ( even some of those receiving promotions or rankings of one, though thrilled, have
independently & honestly expressed that they had no clear idea as to the exact reason )...As for the others not
promoted..(or ranked below a one) & who would just simply like to know in order to perhaps use those "metrics"
for their own future goal setting, asking why? or what? .... is met by management with "an air of no justification
needed..." I ws once told ....promotion coming.... keep up the hard work ...meet this next goal being set for
you.......& that could just ...... and I quote...."consider that your banana on a string." Such a statement brings
many thoughts to mind... Including ringing true to tales of times of not so long ago-however. after a statement
like that who would have ever guessed....that the string would get even longer & that the "banana" even further
from reach? I do not know whether this is occurring across Enron as a whole but if one small part ...is a
reflection of the "whole"....then this needs to be looked Into & addressed.

  Additional comments (re) The PRC process. A 380 degree process should also involve an employee's ability to
17n,ndar. September 116.20111
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  access or secure privileges to view/hear "source-identified comments" as submitted during the employee's
review. An employee is being required to select their list of reviewers (by name) ...why then is any feedback
from that group then kept "anonymous" during the employee's review, Asking the origins of statements made
during reviews is not an option but should be. Anonymous comments are not acceptable in most every format
imaginable including this one-so why should an employee be expected to accept anonymous comments
during a review. Yes, I know ...I know.....& it is understood the overall HR reasons and concerns for revealing
such.., but as for keeping with the concept of...open and honest feedback... perhaps It might help if comments
submitted during reviews can be subject to "source identification" upon the request of an employee. Also,
"mutual reviews" should take place not just amongst Immediate learn members but across departments where
necessary. For instance, If Person A selects Person 8 as a reviewer then Person 8 by default is reviewed
likewise by Person A. This Is extremely Important in cases where they have worked closely on a project
together. Should there be any justifiable reasons why Person B would elect (or be allowed) to not select (in like
turn) Person A to review them especially when they have worked closely together?

Throughout the corporate world these types of surveys have been known as "Sensing Sessions". Most often
taken to get a better feel of the workplace environment with no resulting resolution to items addressed. Perhaps
because (as expressed) the reponse represents only one response amongst many &. as a result, its
significance Is undervalued. And they, also. do come with assurances of respondent confidentiality granted...
but somehow though are revealed ...is that okay? ...Most often times not.... but sometimes to effectively see the
direction in which to go-you have to turn on a few lights...& only then can the actual revelation of that that
occurs in the darkness be seen.

In conclusion, there is much that should be reviewed. I would also like to think that this will be read not by some
consultancy firm.. .and turned Into a statistician's dream and a'lay' person's nightmare. Do I believe that Enron
has a vision that expects & sets a direction that encourages the opportunity for management to fully utilize the
talents and skills of its employees and encourages,risk-taking, creativity and innovatlon....Yest... Yet,
somewhere along the way It begins to fall short. Why? I don't know why, but...
'...the reaching hands through blinking screen, ...in counted numbers many. With hope deferred and just a
word, to each other we give reassurance.

0 Enron senior management must provide oversight of business units to prevent the looting of the company as
has happened with Broadband and EES's.1-u Pi and Ken Rice should have been fired long ago and managers
need to be held to the same standards as the rest of the company who are actually providing value. Bonus's
aren't being paid to the people on the front lines actually making deals and bringing In value because idiots like
these who lose millions get huge bonus's and promotions.
0 We need to get a handle on growth. We are growing faster than we can change. Soon we will start to decline
because of overextension and burnout The Infrastructure is under extreme stress. Although work is being
done in this area, what is needed is not patches but an overall redesign of systems and hardware. Capacity
planning is not being taken seriously.

0 Keep these kinds of 'back to basics' activities going ...it's great to be energetic and entrepeneurial and
successful--it's also great to be 'nice'..I don't think the groups of concepts are mutually exclusive. I was first
attracted to working for Enron 11 years ago when i heard about Enron and Ken Lay donating bicycles to the
'street pollce'--l thought it sounded 'nice' that an up and coming, exciting company could spend time thinking
about the community It shared. In fact, at thattime. (had a fairly successful private law practice. Based on that
bicycle event, I decided, if the opportunity presented Itself, the only company I would go td work for in house
was Enron. When I started in 1990, Enron proved to be even 'nicer than I could have Imagined-AND
energetic, successful, 'nnovalive, etc... As time went on.,there seemed to be a palpable exchange of the latter
descriptors (energetic,~etc) at the sacrifice of being 'nice'---in fact, I believe In 1997. the scales tipped completely
opposite-'nice' was all but gone.) was extremely fortunate to have been offered an exPat assignment at that
time: perfect timing, as I was becoming completely disenchanted with what seemed to me to be a radical
declination of values-and the business leaders demonstrating the declination were being rewarded mote and
more.. I felt Enron had turned completely upsidedown and had lost any sense of balance. Upon returning to the
US in 1999, it seemed some of the harshness had at least leveled off, yet extreme arrogance and cockyness
continued to prevail. If there is a single good thing about the crumbling of Azurix and the broadband business,

Thursdor. Sr. ffrmhrr 116, 211101 1

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it's that we started taking a few steps in the direction of humility-these business missteps forced a few
spoonfuls of human frailty-to be added.to the 'niceness'side of the scale. In the past 2 weeks, Tve actually had
momentary flashbacks of some of the'kinder, caring' Enron I became so completely and passionately
dedicated to I i years ago. I completely attribute this to Ken Lay and his clear and personal dedication to
integrity and all of our other values. Enron is still strong, exciting, energetic , successful and all of these great
things---it will be stronger, more exciting, more energetic, and more successful overall when it reintroduces a
balanced emphasis, Internally and externally, on Integrity, ail of our values, -and generally being nicer.
4 Upper level management needs to be held to the same perfomance standards as lower level management. It
is sinful that Ken Rice and Lou Pal milked the company for so long.

 Enron is a terrific company and I enjoy working here. I do however think that we have gotten a little bit arrogant
over the past couple of years,and need to get down to the basics of making good business decisions as
opposed to the self-serving needs of some highly paid executives, (and I'm not referring to you Mr. Lay.)
 t have noticed a substantial increase in morale even with the stock being down at an all time low. I sense this
is because of Ken Lay taking the helm again.

  My staff are looking for top management to show clear examples of ethical behaviour, fairness and diversity
and supporting the original values that Enron used to set forth.

 Much of IT upper management does not appear competent. They need to run the IT department as a
business. Decisions need to be made economically. We simply cannot build what the business wants simply
because some high up buisness executive request something. If it takes one million dollars to build some
software that will be obsolete In three years and two admin. can handle the same task with no additional
benefits to the business, it does not make economic sense to do this project. Just this year IT management
finally started capturing project costs. How can you make decisions on valueing projects without having an
accurate accounting of costs. The fact that it has taken this long to begin capturing cost Information should
show their competency. IT management should be promoted and compensated based on what they deliver on
time and budget. Only then will you have accurate accounting and realistic project estimates. They should not
be promoted based on who they know or who they are able to get along with. There is a vast amount of money
being wasted in IT on projects that because of poor management will end up costing three times (or more) as
much as they are worth. The IT department will finally be viewled professionally when management finally
CANCELS a project because It has cost more that it is worth or redeploys the management of a project to get
competent people in place. This is not happening since management cannot politically afford to let a high
exposure project fail. Since they are not held accountable on costs, they can spend three times what the project
is worth just to get it done. The business also needs tb become much more involved in ITs projects and
demand value for the money being spent and appropriated to them.
 I think that Mr. Lay was correct in saying things have gone down hill at Enron as far as "RICE" is concerned.
Communication is rhy biggest Issue. I have not been with the company that long, but my family has, and I
always thought that communication was very important here. It does not seem to be the case anymore. I
believe that is something that really needs to be worked on. I am not concerned with the higher offices, but the
managers and directors that do not communicate with their employees. 1 think that is critical and It is not being
done well at all.
 Employee comments and suggestion site gives Enron employees no excuses. If Enron employees want to
be the best, or number one Mr. Lay. Each employee should prove itt The web site gives Enron employees no
room to complain.
 PRC: While S belie that a ranking system is appropriate, a "forced" ranking Is notjeasonable and does not
achieve appropriate'results because it often results in individuals being forced into categories in which they truly
do not belong, thereby giving them inappropriate feedback and ultimately resulting In morale issues among all
employees.

  Executive Leadership: 1 really appreciate Mr. Lay's decision to do the right thing for the company after Mr.
Skilling's recent and untimely departure. Thank youl

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_ I think that Enrans innovativeness is outstanding and is one of things tht I fake best about working here.
  However, J think we have.taken it to far, things like xcelerate and just how much Enron focuses on everyone
being creative and what not is taking our focus away from the REAL ways that Enron makes money. I do agree
that Enron being innovative has been good as it has gotten us a lot of attention and produced a lot of cashflow,
but I don't think it should be a major focus of our business. Just my opinion.

 I believe that the employee morale has deteriorated considerably since I first came to Enron in 1997. The first
year and a half of my employment I just loved coming to work. I was fortunate enough to work for a El and was
under the management and leadership of two incredible VP's. There was respect among all in the group and
everyone was super busy. Everyone in the department and within Enron appeared happy with their jobs. You
would walk around Enron and employees would openly comment on how proud they were to work for such a
great company. I had never seen such company loyalty In all of my 20 plus year career. I soon became one of
those many loyal and dedicated employees. However, In my view Enron start to go down hill after the re-org of
July 1999 and all the other re-orgs that have followed. From the 4 different re-orgs that I have survived I have
witness the following: management level VPs treat their employees with total disrespect; supervisors or other
co-workers trying to destroy the reputation of well respected, dedicated employees with strong work ethics just
to make themselves took better, arrogrant employees that think of themselves to be indispensable and pretend
to be productive, yet spend most of their time "cruising" off the expense of others work product and
  performance; people in management or supervisors roles that do not have a clue what it is to be a good
manager - not only knowing their role but the treatment of the people that work for them: employees being
recommend for promotions or put in supervisory roles that are undeserving of such positons. Further the many
re-orgy and "redeployments" at Enron have created a very "back stabbing" atmosphere, along with building
envy and jealousy among co-workers in the work place. The redeployment issue has become a joke - it #s like
playing musical chairs, when the music stops you better have land In a chair. r think that It would be best to be
upfront about the supurios redployment and have one major lay off. Enron would be doing the employee a big
favor as well as to the company. I also think that Enron needs to re-examine the people they have In,
management, not just high level management, but across the board. Some really need management training.
Enron's motto of respect, Integrity, communication and execellence has totally gone out of the window. In all
fairness. Skllling had some business Innovations and raised our earnings yet he lacked the ability to connect
with the employees and communicate with the public, In my view, Mr. Lay is a great example of what a COB,
President. CEO, COO, VP, Manager should be. I think that it was demonstrated at the employee meeting when
Mr. Lay received a standing ovation from the employees. In my view Mr. Lay is a true leader, a well rounded
business man, and he Is a Communicator - a people person. He has my respect, as welt as the respect of
many other Enron employees. I think that one of the things Mr. Lay believes in is that that the employees make
the company. Its not only about making money and having innovative ideas, etc., its about respect, creating a
positive productive work environment. I think that Mr. Lay is definitely on the right track. He has demonstrated
this in taking Immediate action. Hopefully Mr. Lay will restore what has been lost, and make Enron- once again
the best company to work for. I hope that Mr. Lay will address the PRC issue immediately, and hopefully there
will be fair changes made to the process. As for the stock, I have faith that by middle of next year It will regain
its true value. Ten months ago, I was redeployed from ECB, 3 weeks later, one of my ex bosses fortunately
recommended me to a SVP in ESA. I was offered a position as well as a promotion. Since then I have been
working for a great SVP in EGAS-SA. He Is a smart, has a strong work ethic, is a fair and objective Individual, a
great manager, respected by his entire team. He has a great group of people working for him - all very hard
working, highly dedicated and respectful individuals. He has restored my faith that there are still good VPs at
Enron. The only problem now is the future of EGAS. All I can say is that we are working our hardest to improve
our earnings, etc. I only hope that If Enron does not foresee a future for EGAS-SA. that it will provide positions
for many of those hard woricing EGAS-SA employees who have been putting so much effort and dedication in
their jobs. I am very impressed with the EGAS-SA group. Despite some of the negative encounters and
observations I enco ntered from July 1999 to September 2000, my loyalty to Enron has not walvered. I will
certainly do my part n helping Enron regain its position in being the best company to work. I know that with Mr.
Lay back in the helm that we will come out of the dark and that his successor will reflect Mr. Lays values and
future vieions of Enron.

 There Is a view, both outside and inside, that Enron has some magic ability to "Enronize" markets and reshape
them effortlessly. Indeed EOL has been a very rapid success but it would be worth pausing to consider how

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  Ken Lay
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  Rexnnusc

I long it has taken for other markets to fully comrnodltlze. Not everything can be accomplished quickly. For
example, in my team we are trying to trade with a commodity new to Enron (and arguably very different to the
traditional energy commodities). I was asked to put together a PowerPoint slide Indicating that we would
"Enronize" this commodity. This was done without any serious consideration of the nature of our commodity or
I Nthe steps we would take to realize this outcome. Enron PR Is very good but I think sometimes we risk falling
into the trap of believing our own publicity too much. Hence a bit of humility would be a good idea.

  i 1. Constant reorganizations without any apparent or disclosed goal are a drain on time, budget, and other
scarce resources. They result in lost time and productivity due to constant rumors, distractions, and the need to
reestablish relationships and lines of communication that are constantly being broken as responsiblities are
changed and moved from one person and/or group to others. Once in place, experience and knowledge is lost
resulting in little to no progress on important issues and constantly reinventing the wheel as the new group
Identifies the problem and tries to reinitiate solutions already tried and rejected or abandoned rather than
making real progress. Further, the constant reorganizations result in the'need to continuosly monitor processes
to ensure that they are not broken by incomplete knowledge transfers to new persons. Also, the high turnover
from burn out and frustration Is resulting in the same problems.
  2. While quality of life is stressed and advertised, those who live it are penalized in the PRC process and work
loads mean choosing between making your boss and customers happy or making your spouse happy with little
room for both. *
   The Integrity of management needs to improve;

  The attitude of short-term gains without regard for future consequences needs to be addressed;

  We need to rely less on accounting trickery and more on solid operations to meet our earnings and cash flow
targets; M
The PRC process needs to be fixed - we are turning our employees into self-serving people who rush to take
credit for things and spend enormous efforts blaming other for failures. The PRC process gives no credit for
people doing their every-day jobs that are esential to Enron running smoothly. PRC meetings are very
negative. Each manager takes about 2 minutes presenting hislher employees. The remaining time Is taken up
with bringing to light every negative aspect of other managers'emptoyees In en effort to satisfy the required
distribution.
  # 1 work In EES. I have not worked with a more unethical, ruthless group in my career. Every time I see a deal
close, l am confident that the customer was taken advantage of.

   Although people here are smart, agressive and working towards making deals close. I am never at ease that I
will have a job tomorrow. There is no direction and we are thrown into different structures every three months.
We are telling customers that we want to be in the retail business of energy outsourcing, but our actions clearly
show how we are only interested in commodity. We are telling customers we are interested in doing DSM type
projects and once the deal closes we drag our feet to never do projects. Our competition will eventually get us.

  0 Please take a good look at management They're so busy trying to create their own kingdom that they seldom
make time to great anyone, much less new hires that this is left up to the Admins., which it okay but
management need to realize that they are the leaders and a representation of Enron as we Admins. are a
representation of our g(oups, esp. of our leaders. Management In general are very "as a matter of fact". We
need classes/seminars' mandated far supervisors and above regarding their management skits as they are
giving Enron an awful reputation. Ken, it is sad that Enron is no longer "the company to work". People actually
FEAR working at Enron, that's just not right. I'm in a group where 10 + employees have left to work outside of
Enron all because of management's inability to "manage" what you've built - they're bringing your company
down Ken. Please address this Issue.
  Our group, URM, recently got hammered in the PRC review process because the group lost money. The thing
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is, the deals we lost money on were signed before 90% of us even got here. I have heard the low rankings
were to encourage people to leave. This may make business sense, but it is completely lacking in respect and
integrity since the rankings are supposed to give the employee a gauge of how they performed, not be used as
a cheap downsizing tool. This may be naive of me, but I want to work somewhere that is honest with their
employees.

To further the theme of the lack of respect we were moved from EES to EWS about a month ago (could be
more), and our new VP has STILL not spoken to us. This Is INEXCUSABLE. He may be busy, but we are
busting our butts for him and he has not even had the decency to acknowledge us - much less give us a vision.
The morale in this group is very low, and without major change, there will likely be an exodus of people.

I am not alone when I say this Is the most poorly managed group I have ever been around. I don't know if the
rest of Enron is like this, but N It is, I want out.

i We've lost our way. Some of our executive leaders have forgotten what got them to where they are. Call it
youth, inexperience or just plain arrogance; we have moved some of our talent too quickly too far. They lack
the decipline and maturity to lead a world class organization such as Enron. Much of this has been taken care
of with the recent executive exits but we have more to address. We need leaders that believe In people not just
themselves. The company is full of such leaders, but somewhere along the way we lost our way...we became
brash. We need leaders who inspire, care and bring out the collective best In our people.

  Thank you for asking for my views.
 Overall. I think Enron, and especially my group, (Jenny Rub's group) is doing exceptionally well. There are too
many bright people here at Enron that love this place (and you Ken...)for Enron to fall. Now if there was a thing
that I could do, it would be to get rid of all the slackers that don't work as hard as I do. I swear there Is a LOT of
lollygaggin' goin' on. But that would probably exist in every company.

* Until I posted out into my new position, i tho't Enron stunk as a company that didn't at all walk the talk of Values
and Visions. I had a horrible situation with a department that was completely dysfuntional and it started at the
top with the Managing Director. I even enlisted the help of HR and they were as intimidated as everyone else. 1
nearly lost my job over going to HR. I hung in there because I wanted to work for a company that could give me
a solid opportunity to prepare for my retirement and i was proud to say I worked at Enron with only the'best."
Now, I'm in a terrific place with terrific bosses and coworkers. Not perfect, but so much better. I no longer have
chest pains. My former experience sent me Into therapy and the use of antidepressants. Our Values and
Visions need to be enforced. I received a very good review with no signifanct problems from my current
supervisors.

  The open concept of work stations is quite frankly, not a good idea for all departments. I think that more tho't
should go into determing that employees in some departments need more space, quieter space, private space.
It is way too distracting. No offense Mr. Lay, but would you really like to sit in an open stadium and try to have
phone conversations or compose documents, letters, presentations in an area the size of a table top with very
little room for ties or desktop necessities. The open concept leads to inefficiency in many areas.

The PRC is absolutely dreadful. I understand that we need some type of measurement to weed out the
employees who are not up to par, but twice ayear. We spend way too much time on the process. Also to force
rank individuals is hateful. You loose really good employees that way. Also, the process truly does not work in
many situations. If a, supervisor is out to get someone fired, he has total end complete power of the person,
whether or not the person in question received good feedback from others. Many times I've seen supervisors
completely disregard any feedback from others while reviewing the person in question entirely on their own.
Not at all fair.

United Way - if you would offer the employees an additional day oft if they contribute to the United Way
everyone would. We do it In our department and we are always 100%.

  We have too many website and too many ids and passwords: Can't we discover a way to reduce these to

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Ac!sna~,, ~ ,~,~

make gathering information mare efficient? I have about 15 passwords and Ids at this time.,

This company has so many awards, plaques, trips, etc. for people in management positions. What about the
ones that are supporting Sit of these managers. They like recognition as well. We all make Enron great If I
didn't get my mail efficiently, or my copies completed or my phone answered friendly, my performance would
suffer. Let's develop something for the support staff to strive toward.

Thank you for this opportunity to "vent" I'm very pleased that you ace once again at the helm. Enron truly
needs you as we have slipped dreadly from grace.

* Mr. Lay I am a employs with florida gas transmission company for 23 years out of my 23 year with this pipeline
company I do not know of any blacks that has ban hire with this company In my region In the last 20 years I feel
like this sure be a concern to the company becouse is a concern to me by being one of the black employs on
this pipeline. thank you for giveing me this time to express my feeling.
i 1) Throw out the forced rankings in the PRC. If someone is doing an adequate job they shouldn't been
penalized because of forced rankings. It is also a deterent to hiring and a demoralizer.
  2) The company (Executives) are communicating. Managers need to communicate better with their staff. My
boss promoted one of my employees without telling me. He also has her report to him, also without telling me.
He never communicates details about deals we need to know. He couldn't even tell me how I could Improve
my performance. I am not even sure he knows what I do on a more detailed level. I don't even think HR can
do anything about it. I could give unsolicited feedback in the PRC, but I have no faith that his boss would
handle it properly.
  3) More IT help at a reasonable price. There are several'good projects going on or that should go on, but Ira
..not In the budget" to have them done or there is not enough personnel. "My" programmer may be working on
multiple projects at once and it's taken two years to get two of my projects nearing completion. I have several
more ideas but not enough IT to get them done.
* Primary issue at this point concerns messages being sent by management to employees through evaluation
process. Rankings often do not align with messages delivered, leaving individuals at a loss concerning what
actions need to be taken to improve their position within the company. If you want to reward or penalize
behaviour, make sure the individuals understand WHAT Is being rewarded or penalized.
* In the past few months the morale has gone from upbeat by the employees to a snarling mass. There is no
room in some areas to move, let alone work, the noise level is hideous and without the ability to focus, mistakes
are made and, as we all know, mistakes are costly.
  The IBIJYIT system Is a joke. Approvals are being sent to people that have nothing to do with payments, and
this delays the payments. I have heard that Enron can not get a check.to the vendors on time so everyone is
now using the wire system, It seems that the Enron Treasury department can work faster than ISUYiT...This
issue needs to addressed before the public starts complaining that we can not pay out bills and Enron becomes
a credit risk,...
  The PRC system is okay in some ways, however to get dumped into a group of others because they are also
"clerks", "Specialists" or whatever grade to be rated is an insult. There are people in this building that are here
for 8 hours a day and they work maybe one. However. fey are rated the same as the person that is here from
6 am to 10 pm and works all those hours. Also. people are reviewing others that know nothing of all their job
duties. They may only interact in certain situations.
  Since Ken left and Jeff took ojer the position the morale and ethics in slot of areas have gone to pot. I am
hopeful that with Ken back the-situation will correct itself and people will take pride in being an Fnron employee
and that the "outside" wilt see again how great Enron is.

The PRC process needs to be corrected. A fundamental issue affecting everyone's view of the situation is that
for any one employee to win another must lose. We all agree with a need to judge performance on a regular
basis, but It would be so much patter if all of the categories on the PRC l3rocess were taken into account In the
`
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ranking. For example, I as well none of my friends here can identify either of the following scenarios (i)
someone who was ranked highl9 (2 or better), but had relatively little P&L impact counterbalanced with being a
team player in getting the work done and more importantly (ii)someone who was ranked (3 or below), but had a
tremendous P&L impact with an attitude not in line with Enron's values. Boiled down to Its core, I think the
general attitude is that there is no reward for following the values andfoy contributing In the other ways outlined
in the PRC process (i.e. nice guys finish last or conversely toot your horn the loudest).

Our senior management Is too filled with ex-traders at the moment. You can not escape the trading company
paradigm unless there Is more diversity of experience given to other talents in the company.

Find a way to reduce the arrogance in management as well as the troops (i.e. pride cometh before the fall).
This attitude In the troops results in complacency also.

One final comment is that everyone complains about where the stock price is and I can.be counted among
those, but let's take an objective view of the situation: Enron in 2000 was cash flow negative (taking into
account operations, Investment and financing) except for the saving grace of our working capital position
contributing $1.77 billion to the positive. So if one were to focus on the quality of our earnings, you would from
an outsider point of view conclude that there was no quality especially in light of $400MM+ being poured into
broadband and the low likelihood of ever receiving a return on the money. Wall Street has taken notice of all of
these factors and has awarded a trading company's multiple of between 16 and 20 times earnings. So all In all,
although I do not like it, we are probably trading at or close to fair value. The unfortunate thing is that for this
company to change Its stripes will require both or one of the following things: (i) EES being cash flow positive or
(ti) our origination activities completing some large score. Unfortunately, capital Is key to origination achieving
success and that seems to be in extremely short supply today given our cash and cash flow position.

  I am sure there is a way around the confidentiality of this response. If you find these comments Interesting
enough, please feet free to track me down and I would be wilting to discuss personally these or other topics of
concern whether or not we ultimately agree because I believe open communication is key as you expressed at
rn the all-employee meeting.
  Employees and stockholders want ethical investment. W e want issues such as human rights, corruption, and
political freedoms to be taken Into account In business decision-making. These affect Enron's global
reputation, the soul of the company, and profits in the long run. We must question our business in places such
as communist China and Nicaragua, for example.
  i The PRC process needs to be based on true work performance, innovativeness, etc. not on a popularity
contest. I realize that it is important to build relationships but many times the difference between one person's
ranking and another's Is their popularity with one outspoken decision' maker In the PRC meeting.

  Have consistent and clear criteria for the various rankings. What does it take to get to the top level? Some
groups believe everyone starts at the top and gets pushed down compared to others- Some groups believe that
everyone starts at the second level and only those who have maxed out in their current position and should be
promoted get the top ranking. I see employees doing a good job but nothing outstanding and getting the top
N ranking while others who take risks and do something new only get the second or third ranking.

  I know many contractors who love working at Enron but who would never consider converting to an employee
because of the brutality of the PRC process. You would think they would base this kind of decision on
something like compgnsation or benefits instead.
  0 While t don't know alllthat is going on in the company, or what information might be being withheld (it any and
for whatever reason).) feel that the Office of the Chair is doing a good job of communicating its reactions and
goals in light of the significant events that have occurred in the past month. I am confident in the future of our
company, primarily because of the high level of confidence exuded by Ken Lay.

0 Although I am a contractor, I bring a lot of potential to the table. I have an MBA In Finance with a GPA of 3.842,
experience in management, marketing, budgeting, etc., yet I am in EES just continually churning out copies of

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bills -- sometimes the same ones over and over. I feel tike I have a lot of energy and potential, yet I am locked
in a box. The politics of the EES organization has become quite ludicrous In the past couple of months. The
constant re-orgs and re-deployments have created an underlying paranoia that encourages employees to
stretch the truth and ad lib about what they really know. I also believe that this significantly affects the ratings of
the PRC as supervisors constantly change and people are fearful of losing thelrJobs. I have read "Who Moved
My Cheese," and am definitely an advocate for change, however I went on vacation recently for 4 days only to
come back and team that we had undergone 2 re-ergs. I am finding that constant re-orgs allow people to
dodge accountability. I often find a number of costly mistakes made by the so-ranked "ones" and "twos" of our
organization. Employee morale has taken a beating in this department, especially when it comes back to not
what you know, but who you know. Overall, I really like Enron and know that other departments and
organizations are not as chaotic. However, I am probably about to leave Enron to be hired directly by a
competitor. It is sad to think of the investment that Enron has made In me only to be lost as a sunk cost
Thanks for the training!!
   There has been a serious talent drain in the so-called "back office" functions at Enron, particularly accounting
and tax. In my opinion, this Is attributable to three factors: Below market pay, lack of appreciation for
contributions of the back office, and general employee morale.

  The below market pay factor is being addressed to a symbolic and one-off extent by the new stock option
issuance. A more concrete measure was taken in response to market studies that indicated that tax
professionals were significantly undercompensated relative to their peers In the Industry. This measure should
also be taken with respect to accounting, particularly at entry and mid-levels.

The second factor, lack of appreciation of the contributions of these areas of the beck office is far more difficult
because It seems to be endemic. Despite all our efforts to protray Enron as something more than a trading
company, traders and originators get the respect, the compensation, and the credit for Enron's successes,
without regard to how much back office talent, know-how, and creativity went into those successes. On the
other hand, the back office is held strictly accountable (as It should be) when things go awry. In this regard,
Enron needs to make a concerted effort to understand and recognize the contributions of the back office. Even
more importantly, Enron should broaden the accountability of its commercial side to cover not just the closing of
the deal but its implementation to give incentive to the commercial side to involve commercial support on a
timely basis.

  Finally, on general morale, the PRC process needs to be improved and quick. Get the stock price back up.
And keep the faith.
  I believe one of the biggest challenge we all faced this year was the constant changes in management. Based
on these changes, It was difficult to gain traction on deals and Initiatives. As a result, individuals were penalized
at PRC for not dosing these transactions. Management took no responsibility for their lack of direction In this
Instance. t realize there will always be changes, but this should be taken into account as "Barriers" In the PRC.
Regarding PRC process, we should do away with the company-wide cross calibration. It does not make sense
to compare Individuals In a peer group to one another just because they have the same title. Individuals do not
all do the same jobs and therefore should only be compared against others in the same job Simctions. Also,
management uses the PRC process to "get rid of people they view as performance issue Instead of
addressing these Issues as they arise. In this instance, management should be trained to deal with
performance issues and evaluated on these skills' 11
  Regarding the Issue of respect and Integrity, I believe there is very little team work at Enron. It seems people
are encouraged and rewarded on closing deals, regareless of how it gets done, and even if it means
jeopardizing what sorneon~ else is working on. The ideal approach is to Identify the synergies and
opportunities to support ode another. One of the characteristics that makes GE the leading company in the
  world Is its "boundaryless" approach to business within the company. It really promotes team work. We have
worked with GE for over 12 months on a transaction and have seen instances of individuals in one GE
company help someone else in another part of the company with a transaction. In light of Enron's new vision,
this might be something to emulate.
  A particular legal group has been an issue this year. Is the role of,legal to dictate commercial terms and

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  prevent deals from being done, or support the commercial groups by advising-on how to mitigate risks so a deal
can be done? Also, the level of service is ettroclous; phone calls and emafs are very seldom returned, and the
only way to get en answer is to physically show up unannounced at the lawyer's door. I believe the business
units are legal's customers and should be treated with respect and a certain level of responsiveness. Do we
-treat our external customers like that?
  Human Resources remains a disappointment. They have shown no empathy or respect to those who are on re-
deployment or being severed from the company. I have knowledge of instances In which HR knowingly
provided inaccurate Information to re-deployment candidates and had security escort out individuals who were
severed. Additionally, HR is supposed to be facilitators of the PRC meetings to ensure all guidelines'are
adhered to and fairness prevails. However, I have observed Instances In which they allow old tapes and
irrelevant information be discussed, adversely affecting an individual's rating. While most individuals in
business units are cost conscious, HR seems to believe this does not apply to them. There are Instances In
which they have allowed company-sponsored cell phones, corporate credit cards, laptops, Palm Plots, and
other company property leave the building with an individual who has severed from the company.
  Overall. I believe most of these issues stem from lack of maturity and leadership ability in our Senior and
General Management pool. It seems our management was promoted and rewarded on the dollars they make
for the company with total disregard for management skills and values. It is time to see leadership that can
balance business acumen, fairness and values.
  Overall,
0 I don't think we have really had a forum for employees to share their ideas with management on different topics-
like the committees we had at one time. Cindy Olson was always listening to what employees are saying and
asking people to serve on committees to enhance change. We haven't done much of this lately.

  I don't think we really embrace the vision and values at Enron - we talk a great game, but we don't walk the
walk. We reward and promote people based on the risks they take and the money they make for Enron, but we
consistently promote people to high levels within Enron who treat others like trash. Several of them are on the
management committee- Whalley, Kitchen, Koenig (& Risker), Lavorato. Shankman. It really sands a loud and
clear signal to the rest of us. It is not that the aforementioned aren't extremly smart, talented end great for this
company, but they aren't the "whole package". Ken Lay has never treated any employee disrespectfully, but he
continues to promote people who do. I think this says something to everyone about how differently this
  company wlfi be run following his departure.

  I also question many of our business ethics and it makes it very hard to work for this company and defend us to
others. I think we play too much In the gray areas. I don't think we are wrong in the California situation, but it
certainly makes me wonder what I don't know. I can't defend us when I know we pride ourselves on bending
the rules to meet our needs. I question Fastow and the LJM deal. I realize that it is legal, but I think it walks an
ethical line when out CFO personally profits from an Enron deal like that. it warrants external attention.

  I think we need to take a look at the way IR has handled our stock price drop. I don't think our "logistics
company" message has worked AT ALL None of us even understand it, so I don't know how anyone else can-
not customers, not analysts, not the media, .,

  We really have some good guys here at Enron too- Frevert, Sherriff. Kean, McConnell, Hcrton... they work hard
and follow the vision and values. .
  4
  I think the Issue is that it we aren't ALL going to follow the V&V, then just get rid of them and quit touting them.
Be clear with what the rules are to move ahead In this company.
'I I think It is a shame that their is only one(I)Job opening for Portland, Oregon. Enron hasenade it very difficult for
me to keep my job. I love this company probably more then any VP,Sr, VP. Dlrector,COO,even more than KEN
LAY himself. I want to slay with this company not just because I got good stock orthe pay is good. I want to
stay because I believe in what Enron is doing. This makes me very sad to see such a beautiful thing disappear
into thin air. I started out in Telecommunications with Enron and now I am in Physical Security, why the change
of jobs because I will do whatever It takes to stay with Enron. Mr. Lay, I hope you are reading this and not just

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some Assistance whom will took at it and say "whatever" and hit the delete button. If you do by chance get to
read this I would for you to reply to me that you actually got to read this. My e-mail is
  reginald howell@enron.net. Thank-you
  0 About 5% of the EES sales force that created EES remains. Pinnacle award winners, chairmen award winners,
and lead sales people have all been put into sideline jobs or released.

  We built EES, saying we would treat our customers as clients, not counterperties (as they were treated in
' ENA). With the severance of a large part of the former sales force and the Importation of a large number of
ENA sales into EES, that Is changing.

' Letters to management should not be routed to human-resource people for tepid responses. In thirteen years
with Enron, t delivered a lot and received varying levels of response back from the company. On the one time
when I fell I was completely abused, I wrote to Ken Lay about the incident. Six weeks later, I received a tepid
I letter from the head of EES HR stating that the company was happy things worked out (they didn't) and that
they were glad that I found something in the company. My assessment of the company's commitment to
Integrity and respect changed dramatically that day.

  Eneon is a great place to work. I am committed to it's success as are the vast majority of the people that are
part of our Enron "team". I believe that we have taken a hit in the last year as it applies to public opinion, largely
due to issues that were/are out of our control (Dahbot, California, etc,). If we work hard to change the direction
of public opinion, and continue to alive towards our goal of being the World's Leading company, I believe that
the other issues (stock price, employee retention, etc.) will be positively effected.
  0 1) The PRC 'suggested' percentages do not support the fact that Enron hires and maintains the best forwork in
the world. To say that 15% of the employees are performance issues and need a probation plan is contrary to
the message that we have the top talent. Additionally, we have more that 5% of our staff ll}pt is truly
outstanding. Why does PRC'suggest' a distribution? Managers, with input from others, should address only
the TRUE performance issues and not be'encouraged' to rank a fixed percentage as unsatisfactory.

I love our values. We need to add teamwork to the list. If everyone pulled together, Enron would be even
MORE successful. I would like to see more rewards for team efforts and self sacrifice for the benefit of the
whole (Enron).

Some people (myself Included) are excellent at mentoring staff and making them more successful....which
makes Enron more successful. I can accomplishment more by being a good manager of people than by being
an individual hero. I do not feet that Enron currently recognizes that skill set. Some people add the most value
by being a coach, but our reward systems do not recognize that skill.

I am sooooo glad Ken Lay is backi! We need to have someone In the CEO chair that is personable, warm and
that enlists the trust of others. Jeff is brilliant and a terrific 'second'.

rf t think there Is a "hidden business" at Enron, simply from identifying opportunities to leverage business contacts
between business units. We're so'competitive, I think the businesses could care less about helping one
another. To have a true Network effect, this has to change.

  I think the PRC system is great. If I could suggest one change, it would either be that we be more open about
what happens inside the room or just not communicate about It at all. That's what most companies do about
their ranking systems. ifIanything, we've been too open, and only up to a very tentIllznig point.

  I think the fact that so many people ask benefits, work space and other personal questions at Mr. Lay's all-
employee meetings is indicative of the fact that we have created a real "me" focused culture. You can't argue
with success (the company is doing great), but it bugs the heck out of me when people do that. I came from a
manufacturing company where even factory workers would never even think about asking the CEO those kinds
of questions. I have no idea what can be done about this -- nor am I even sure that It matters given that we are,
in fact, in an intellectual capital business where we have to take care of the people -- but It's just an observation.

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 1. Until recently. I was proud to say I was en Enron employee. Lately, several things have damaged Enron's
reputation-for example, Calfomia, Dabhol, constant flipflopptng by management re. our business strategies,
Skilling's imprudent public remarks, and publicity regarding PRC. I am hopeful that Mr. Lay's return YAP help
restore Enron's reputation and stock price.
  2. The risk assessment and control process seems to be at the same time both too stringent and too lax, The
process can be gruelling, yet transactions are approved that everyone except the commercial person and top
management believes should be killed.
  3. 1 see a need for greater management oversight over activities of one of the co-managers for the business
group that I work with. He is taking off much more than allowed vacation, I believe without proper reporting of
his absences. He has provided for extremely generous compensation (generally to be paid by the other party to
the transaction with the result that those terms are not reported in a DASH) to a consultant to his group that
happens to be a friend of his. The terms of the compensation are such that it causes one to wonder if
something unethical might be involved. The terms are known generally within the group, and other employees
wonder aloud how he manages to "get away with it." in addition, his treatment of employees in the group is
disrespectful. He frequently harrasses, embarrasses, belittles, or humiliates employees In staff meetings.
+ There needs to be a better work/life balance. For example, I want to go on vacation and not feel compelled to
check voicemaii, email or take my cell phone. The downside about this job is that It is all-consuming -- I work
nights, weekends, vacations. There is never an Enron-free break. This is a surefire recipe for burnout -- and
resentment
  I do not have complete confidence in upper management -- I truly believe that Jeff SkillIng's resignation left us
with an enormous void - we do not have a strong "second string" management team, with the exception of
Steve Kean. It would help externally If Ken Lay made a commitment to stay for a set period of time - i.e. he will
remain as chairman and CEO for at least two or three years. At this point, ff Ken left, I wou i leave, and our
stock would plummet.

I am concerned with our ethics and integrity. While I believe that we are always within the bounds of the law, I
think we straddle the line consistently. An example of this is LJM - while there may not be anything Illegal, the
appearance that our CFO personally profitted -- and that the board had knowledge of thesituetion --could send
our stock into a tailspin. The "Lavo" situation in Canada is another example where we were within the bounds
of the law, but had the appearance of impropriety. Analysts and shareholders do not trust Enron to provide the
"straight story." I do not have confidence in our Investor relations team.

  I am also concerned that credit is not given to good managers. They are not held accountable for providing
feedback, and their management abilities are not taken into account in the PRC. The only emphasis is on
results -- not on interpersonal or management skills.

  The stock price Is the single most Important Issue. Morale is low because the stock price is so low.
  The stock grant of 2000 is horrendous at an $86 strike price. We realize the difficulty involved in undoing this,
but employees who started in 2001 have a very significant gain over employees hired in 200 - clearly and very
unfair. Our stock option program, going forward, should be'restruck' for unvested options! This is on every
employee's mind. The grant made by Ken probably saved the day for many, but we're still worried about the
remainder of the options. At this point, it looks better to many (somewhat whimsically) to quit and come back In
a few months to get the better option grants
+i 1. The PRC process is generally a good thing, but I have personally observed the following: a) forced ratings to
fit a normal curve is wropg, b) managers and directors have changed the ratings of employees from their
peer/client ratings, c) frequency should be changed to annual only, d) My job classification was changed for the
PRC process rankings only (From IT Consultant to manager) which caused my ranking to suffer,
  2. t would hope that Sr. management will not rest until you can convince the analysts and trade press that
Enron has significant value that they are not currently recognizing. They have taken out the value of EBS, but
they have gone further. Our positive financials should convince anyone that Enron is a great company to invest
in.
  3. Mr. Lay Is doing an outstanding Job. Most people I talk to feel more comfortable with him at the helm than
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Jeff because there was a perception that Jeff did not value our assets as highly as Ken does.

  d 1. It is criminal the way Lou Pal and Ken Rice were compensated given the dilapidated condition of EES and
EBS.
  2. It realty ticks me off when I see my group making a tremendous amount of money, and then hear about EES
losing a tremendous amount of money because of their lack of internal controls. The lack of leadership and
management within that unit has been astounding, and the fact that nobody seems to be held accountable is
criminal.
  3. My group Is in a satellite office that has done extremely well. Only once has the leadership In Houston visited,
and not once did anyone say "good job" or "well done'. It is simply unsatisfactory leadership. You need to see
the troops.
  4. Compensation is a true c.oncem. Enron claims to be a meritocracy and to let the market determine price.
However, as a company we generally have no idea where the market is for people who work here, and are
surprised when people leave after being 'low-baited" on salary. On the positive side, my direct manager is very
conscientous and has made dramatic efforts to improve this situation in my office. However. despite his efforts,
my group has recently lost 2 very talented people. . `

  I have full confidence in all officers in the Office of the Chairman and am very pleased with the recent
announcements. I believe that there is a serious problem at lower level management. Our business unit has
lost some very capable and talented employees due to the management style of our business unit's President.
He has absolutely no people skills and encourages negative reviews to increase productivity and limit pay
increases rather than rewarding behavior that that would benefit Enron. My imrinediate supervisor has had no
management education, skill, or training and the vision being cascaded down through the ranks is primarily
negative. I appreciate the confidential aspect of this survey but fear that my responses may be taken as just
those of a disgruntled employee, therefore I am including my ext. (3-5368)in the event that anyone should want
to discuss my responses.

  I think in EES particularly, advanced too many people at too young of an age. they may be smart Innovative
people, but have no management experience. Too many sales reps recavted huge bonuses for closing bad
deals and now they are VPs. People tend to get promoted who are undeserving. GE has four types of
individuals. 1. Individuals with character and close deals. They stay. 2. Individuals who have good character
but aren't adding enough value. they get another chance. 3. individuals with neither, they are gone. 4.
individuals who bring In a lot of value but no have no values. They are gone also. enron, unfortunately has too
many of these individuals In management positions, they are self serving and only looking out for themselves.
this is going to kill Enron in the long run. Too many managers (to. managers, directors vp's and up) who have
their butt in one job and their head in the next. This Is a huge problem. The PRC process has put fear In all
employees causing backstabbing, withholding Information, horse trading etc. Only to find out that the majority
of the employees received a 4 or 5. If everyone Is so bad, than fire HR and the managers that hired the
employees. Every Manager should do everything possible to make sure their employees are teaming,
contributing etc. IF they aren't, than they fail as managers as well. I use to find Enron as a great place to work.
AS you can see by the above things i like, those are the wrong reasons to stay with a company. they aren't
satisflers. I do however, like that Ken Is back. I do trust him.
  Mr. Lay,

I believe that you sincerely have a heart for the good will and the success of everyone(at Enron. Thank you for
that, It showsl I have been proud to tell people that I am with Enron when they ask. I do.belleve, however, that
most of the excitement has left our employees. I have had the privilege to be here since 1985 and enjoy the
interesting but FUN development of this energy giant we call Enron. I know that we will continue to grow and
change, but we need ~o find a way to return the excitement and make it fun. This would improve morale, which
would carry across to-the following: productivity, growth, risk taking, new businesses, better public relations,
and ultimately the NEW old Enron Corp that this nation and the world will respect even more then they do now.

Thanks Again,
Steve Perry

Thursday, September 116. 21W

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i've been with Enron almost 14 years. I always believed as tong as Ken Lay stays in charge it would be a great
place to work. I still believe that. However, I can't help be a little nervous about the departure of a tot of top
executives. Is there a reason we don't know about?
  AS AN INVESTOR AND AN EMPLOYEE, I AM RELIEVED THAT ENRON IS ON THE RIGHT TRACK NOW.
MY PRAYERS ARE WITH MR. LAY, THE BOARD, AND THE NEW MANAGEMENT TEAM. WELCOME
BACK MR. LAY, YOU WERE MISSED MORE THAN YOU KNOWIII
  Mr. Lay,
  I beleive that in general the PRC is a good system. I would like to point out several things that may have not
been considered.
  A little history: I am an employee that had moved up the "chain" quickly until my current boss came into the
picture. The flaw in the PRC system Is this: If you have a personality issue with your boss, you do not stand a
chance for a descent review. If he says nothing in the PRC meetings, you naturally move to the lower end of the
scale. This has been the case with me. Regardless of any positive feedback from my reviewers, if he chooses
not bring to tlght your positive attributes, you are not seen as having a positive Impact for Enron. I'm the only
one in the group that does not go have beers, etc. with my boss on a regular basis and I was the only one in his
group rated this low. Every stated example in my review, that to my boss was a failure, was in my eyes positive.
Example: He said that during our ENW PRC, I did not "sacrafce" any of my people to be moved to a lower
category for the sake of the "whole" group. This was the example he cited as me not being a team player;
hence ranked me very low in Teamwork (he put this on my review). I ranked my people the way I saw fit, and
"went to bat" for them, now I'm a bad team player In his eyes because I did not "sacrifice" someone. Is this a 
vaild issue? I can give you several documented examples of this type behavior.

Realistically, once you have a bad review, your career at Enron is finished. I was/am extremely dedicated to
Enron and have given numerous extra hours not saying a ward but with nothing to be proud of anymore.
The majority of my peers used to see me as respectable until my boss undermined my crediability. I know that it
is not just me because a few of his direct reports have come to me saying the same thing is happening to them.
Mr. Lay, I have spoken to several good, intelligent ex-employees that have left Enron because of this issue. I
have resigned myself to the fact that as much as I think Enron Is a great company. I will have to leave.

The way I see to correct this is to have ALL feedback given in the PRC's in a timely manner so as not to make
the process much slower than it is today.

Please take this as a neutral observation and not a complaint. i/you want Enron to do well. (I have a lot of stock
stilt in my 401 K.)

  Thanks for your attention
  ENW It Infrastructure employee

  Ps. I'm not sure if my name is associated with this. If kept completely confidential, I will talk to someone about
this. Cell phone 713-503-1730.
$ We must strive to repair our image both internally and externally. I beleve Ken has a tough job. without Jeff,
because they were seen as a team with a shared vision. However, if anyone within the current organization can
put things back to "the way they were", I am certain Ken Is the one.

  In addition, I have seen many occasions where Enron promotes based on the status of "friendship" and not
based on who is the most qualified to do the Job. This concerns me greatly as a shareholder. FYI... I do not
say this from pers4inal animosity. I have not been passed over for any job I wanted. I have just scratched my
head many times over some of the individuals being promoted to traders. Quite often there are much more
qualified Individuals within the organization, yet they aren't "connected". This needs to change. It Is critical that
we utilize the brightest people In the most effective way.
  The forced ranking part of the PRC must be eliminatedl You may (1) rate me because I need to know my
strengths and weaknesses, {2) rank me with my peers if you need to know how to split up the compensation
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Rcs~n,r~e
pie, BUT 00 NOT FORCE RANK ME BECAUSE WHEN YOU PLACE PERFORMANCE TAGS BESIDE
NAMES BASED SOLELY ON A PREDETERMINED CURVE THEN THE TAGS RELATE TO THE CURVE
AND NOT TO THE INDMDUALI It is poor management
  to wake up one day and say, 'Well, It's February so we must fire 15% of our work force this month." Forced
Ranking means that one can never be satisfied with the department. Management should be required to rate
employees, determine those that are unacceptable, and fire them....that is managing the work force.

Simplify the explanation about Enron's business plans. Mr. Skilling's last (and Mr. Lay's first) was that Enron Is
a logistics company not a trading company. This Is a silly distinction without a difference. What products do we
move around? We must focus!!!! Plus, a logistics company Is not exciting to an investor. I think that we are an
energy company that is an experienced market maker. Now we could just tout Enron as able to create a
market in anything and everything, but that gives absolutely no security to an investor. What will Enron do
next???? The prudent investor wants to know. It was ok not knowing during Enron's hot streak, but after
Broadband investors will not blindly trust Enron to make money without a focused business plan.

Enron needs to return to "RICE". Pull down the signs in the lobby that equate "Open Markets" on one side of a
sign with "Respect". That sends a terrible message. '

Upper management must be Honest with Investors and employees. We were Insulted by Mr. Skilling's non-
explanation that our stock price drop was due to the fact that "we got caught up in a compression of PIE
ratios". He attempted to blame an unknown force instead of pointing out that about $35/share of the $85/share
price had been Broadband and now that value was gone. BE HONEST,

Furthermore, show RESPECT the last few years Enron has become an arrogant bully in the market. The
attilide demonstrated in our commercials that "Enron is brilliant enough to unmuddle the markets around the
world" Is unbridled arrogance. Our commercials stating that without Enron all markets consist of traders blindly
buying and selling without any idea of the proper pricing offends everyone. It tells the world to please just hold
out long enough and then father Enron will make it around to your particular market and clean it up for you. We
must show some RESPECT for customers, markets, other traders, governments (i.e. Enron should not promise
the world and then sell down and leave the foreign country-With another entity performing), HUMILITY at least
Internally .

I applaud aggressive, hard nosed negotiation, and making money for shareholders ... and Enron has made
money...but...I have the feeling that Investors were "holding their collective noses" when they invested because
Enron was not (1) enjoyable to pull for nor (2) understandable (i.e how do they make money?).

  Ken Is Inheriting back a company that is experiencing low moral. But if anyone can pull it back up, he can-
because he truly cares and he shows that, evident by this survey. One used to have pride In working for Enron,
but I think that has slipped the last six months.
  I do think that the PRC Is not a fair process and have real problems with it It definitely needs to be looked at
and re-evaluated.
  My faith In Enron is back at the top with Ken at the tops I trust him to surround himself with good people.

  0 I'm glad Ken Lay is backs
  I see weakness in mid-management levels, and a general lack of people organizational management skills.
The emphasis is on a t of bright number crunchers, with no importance on the skills to Implement. A lot of
importance on raw intelligence (as there should be) but little Importance placed on experience and knowledge.
Company rewards activity over performance-many who will work 2417 are rewarded even when they cost the
company money. No tolerance for those who try to warn of possible weakeness In strategies. Tech staff are
treated as second class citizens (obviously, I am Tech Staff), and often the rewards are given to the guys that
Inked a deal with little consideration of the people who made it possible far him to do it, often in spite of the
"leader'.

  Thnr.w?n,r, September #Jb, Mpl

P'Rr3l rf8.1

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  Respnse
I am concerned about the treatment of workers by immdeiate supervisors
  I would Ike concerns to be addressed without having words twisted and being viewed as a trouble maker .
Employees should be treated with the respect and integrity that Karl Lay talks about
  Personal opinions and office gossip do not belong on evaluations
  Immediate supervisors should not have the ability to keep employees from moving to another department
  # I've been with the firm for 15 years. My tide Is Sr. Director. I've enjoyed working with Enron every year until this
year. I never had to face such abuse and disrespect in our PRC process before. This year the process was
used to place people In positions of fear. It was mis-used by inexperienced and untrained managers. The
unwritten rule was if you wanted someone out of the company rate them as a 5. If the job performance did not
fit the rating make it fit. Mr. Lay, take a survey of how many people left this company this year with mare than 5
years of service, and check into the reasons why they left or why they were redeployed.

  After layoffs and redeployment, people are treated like items Enron owns and want to dispose of. I can not tell
you the number of meetings I've attended and new employees make a joke about how they can redeploy
people. It is the mind set Enron has set and these managers and directors feel Enron will not take any action
against them, and this Is accepted by Enron's management.
# The PRC does not work. Bad concept. There are too many ways to game the PRC, and numerous chances of
being unfairly rated.

The Enron Building and other offices need to be updated - The building floors are looking horrid, Is It that
expensive to replace the cheap carpet every year or so?7?

Enron needs to review its hiring policies. There is too much emphasis on hiring the MBAs. Enron appears to
have lost its middle level professional staff, and has replaced them with the MBAs with few skills, and no
corporate or industry experience.

Why was the Dabhol project allowed to become mis-managed? I find it incredulous that the Indians were not
aware of the costs and rates. Does Enron not communicate with its partners?

One more comment - I am very pleased that Ken Lay is again the CEO, Ken has the respect of the Enron
employees and the Investment community.

# Welcome back Mr. Lay. I did not like the Skiiling era, however brief it was. Please learn from what went wrong
in that time so that we don't repeat It later.

i We must attack diversity, Re-emphasize our Values, and retain assets that make money. See email to Ken lay
dated 8/15 entitled "Going Forward Jeff will be missed but not forgotten"

Instead of easels on every floor, put up pixie glass on walls and allow for poster to slide In It slots for display

PRC remove forced ranking for advancernentm but maintain it for bonus purposes. Educate people on the PRC
process and train supervisors regarding giving feedback. Move from evaluating talent to managing latent

Select a minority for the policy committee-
,

  I truly liked Mr. Skating ...... and have much admiration for him-but I have that comfortable feeling about working
at Enron again since Mr. Lay Is back In charge.
i The culture of Enron has changed, which is a good thing. However. I have seen some things change along the
way that are not so good. I have spoken to several people outside of Enron that would like to work here, but
they have a famIly and they say they cannot put in all the hours that are required. I belleeve on the street, Enron
I

Tlruralnl , .ceps' mrhrr 06, 2041

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r

r

r

r

r

r

r

r

r

r

I

r

Respnnse
has the reputation that It Is a "sweat shop". I believe some of this Is attributable to Middle Management. They
like you to be here for long hours, whether you are productive or not It is their perception that If you are here
for long hours you are more productive. It makes it hard for those of us with a long commute (2 hours a day) to
work those long hours which is required at many jobs at Enron.

I also believe that many leads and managers are not qualified with the proper people skins to motivate and
coach others. Some just want to give orders and take all the credit. It would be nice If they would get Input or
opinions from their employees rather than making demands. This definitely lowers morale.

I have been working for this company for 20 years and have been rated a Superior employee over the past five
years. However, since my commute is getting worse due to traffic and I cannot keep up the pace of working
these hours. I feel I am required to look for employment outside of Enron.

i this place has gone to hell in the past year.

you're an economist, ken. read "the tragedy of the commons." .

you made record profits- then you, in effect, stole them with the bonuses, my bosses boss made more in bonus
than the ENTIRETY of people who worked for him

you republicans are worse than the feudal barons.

you're a smart guy, lay, and you have some good personal traits. rise above the sleaze.

  Enron needs to REALLY support balance between work and personal life, as Jeff has now done. Most of us are
in the "99.9% of the population" that don't have that luxury to balance It the way he has, as Jeff said in
Business Week. Some years back in an ECT employee meeting, a question was asked about the lack of
balance between work and family. The response was, "If you put your family first, then Enron is not the place
for you." People still quote that statement.
  The PRC has gotten out of hand. Some years back Ken supported the position that It was not needed In all
business units do to the nature of the businesses. When Jeff moved to the Office of the Chairman, Ken
decided that it was needed across the entire organization. I was on an employee task force in ENA charged
coming up with improvements. We came up with a number of excellent suggestions that were provided to
management. Not one was ever implemented. Far too much time is spent an the process. I have a number of
reviews to do and in an effort to give meaningful feedback, I spend at least a full week working on the process
twice a year. That is a lot of time allocated to a process. that breeds contempt. I have been rated all over the
board. from I to 4. I have found that ratings are too dependent upon who represents, whet your political
standing is with that Individual, what that person's political standing is with the other committee members, and
what your political standing is with the members of the committee. That is a lot of politicking to dol

  t feel that lower management from Director on down needs some serious training in personal management.
time management and a better understanding of how to switch roles from that of a technical position to a
management position, I believe, more so in the Information Technology field than any other at Enron, that the
Peter Principle is at play and to some extent, favoritism. I see some managers who clearly do not want to be
manager's yet they have been forced into that role. Other Managers have displayed the inability to drop the
technical aspects and grasp the people management focal point of their position. They stnyggte in their position
simply because they do not embrace the responsbiiities that they have been entrusted with or perhaps have
poor role models as headers themselves.

  We need more checks and balances in place. Many at the bottom of the chain feel cornered when they attempt
to address Issues yet their Ideas are either ignored or simply forgotten about. Currently, I just want through a
transition and now have a new director. The transition took place several weeks yet our new Director and even
our new-Manager has taken the time to sit down with us and get to know us. I feet as a leader, they should be
proactive in getting to know who works for them and discuss their visions for where they went their group or
teams to go and what steps they feel are necessary to achelve those goals. I also feel as a leader, they should

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tap the best resource they have when facing difficult decisions - the people who work for them.
0 increase in dividends to shareholders, will this cause more investment?
  the direction of the company is fantastic, how do we as a company and its' employees convince investors to
BUY Enron?
  communicating to employee's how to convince our neighbors,bussiness contacts,frlends to Invest In Enron,the
future looks bright everything Ken said at the all employee meeting has a postive note to It. Knowing just how
"WE SHOOT OURSHELVES IN THE FOOT" so we DO NOT compound the problems with our stock prices.

i WELCOME BACK, MR. LAYI

The PEP and PRC are good tools, but forced ranking Is completely detrimental to the work unit and Enron as a
whole. In addition, having to go through the whole PEP system twice a year Is a waste of manhours-about 4
weeks per year. Since Enron's work force Is barely large enough to handle the work load, these four weeks
could be better utilized.

  I honesty think that contractors and temps should have more of a break In a opportunity to become full time
employess. There as been temps/contractors working at Enron for as long as 4 years.

  i dont think that this issue has been taken seriously.

  1)1 hope this is really anonymous. We are having huge problems with ibuylt payables or ipayit as it is called
today. These problems are not user errors as Rick Causey said they were. We have met many times with the
ipayit chain of command and have showed them huge errors. This system has taken a process that my
assistant used to spend two to three hours a week doing into a system that takes twenty or more hours It we do
It right. What l mean by doing it right Is checking our invoices before we code and approve one to make sure it
has not already been paid. The system is very stow to use just to pull up the invoice to view it can take between
15 and 45 seconds, when you have 60 or 70 invoices a week this alone adds an hours time to everyone that
has to touch this many invoices.
  2) Global Strategic Sourcing is a good idea but they have way too many people and too much time on their
hands, they are alt working hard to justify their existence (we all should) but they are playing a numbers game
with the savings they claim. Two examples of this are:
  #1 They negotiate a deal with a vendor this year and it saves us I million dollars, the next year we double our
business with that company. They have done nothing on the contract but this year they claim another 2 million
in savings based on what they did last year. Could they rest of us base our performance on what we did last
year?
  #2 They meet with a business unit to negotiate a price on.a product we need. They ask for information on the
deal. We give them budget numbers, let's say 1 million dollars, we give them retail price and our present Enron
discount price. They come in and negotiate a price 2% below our present Enron price which Is great, but when
I they want you to sign their deal sheet at the end they will try to claim the saving from the retail numbers or even
the budget number. They should be claiming the delta between the present Enron price and the final
negotiated price. This is the real value they have added, not some Inflated number.

0 I have been with Enron for 16 years and I would NEVER leave, I say for better or worse with you Kent The
stock price isn't doing good right now but so what?lit I KNOW it will come back and I am no less committed to
Enron now than when the stock was at $90. I am so glad that you are back, you give us hope (thanks).
i If I am evaluated on N V, NPV, and NPV, who controls how projects are assigned? For expmple, who gets the
sites with high power rtes and non-union labor vs low lower rates and union labor? Is this distribution taken
into account during PRO?

  0 I think it Is great that we profess "visioris and values" however. I think it is silly to profess these as most people
do not follow them at all, Including many of the folks at senior management levels.

  I truly believe that not enough people have Intergrity. People are constantly dishonest In their communications
with one another. You never know who to believe and who not to. I've also seen on countless occasions

  T1rurrrrrn', Sepfvniher Nrf. 2!1/11 ' Pregr .~~ e8$

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  vendors being treated unfairly. it I were an outside vendor knowing what I know now, t would seriously consider
not doing business with Enron.

  As far as communication and respect are concerned, i can't count the times t've been in meetings with MD level
people who shout and use the "F' word I'm no prude, but this is completely unprofessional and 180 degrees
opposite of the V&V statement.

  I am in one of the "service" business units and we are constantly harassed and criticized by admins whose
attitudes are less than cooperative and team oriented. These adrnins have way too muc}7 power in this
company. It is unlike any other corporation I've ever been associated with.

  The business unit that I work for Is notorious for not promoting people, giving small (if any) raises and running
"lean" (being cheap In my opinion). While I am supposedly a star performer according to my peers,
management and customers, t have little hope that (will be promoted or even recognized for my contributions.
Had I known about this "lean" reputation, I probably would not have accepted this position.

  Recently we were told that HR was doing a compensation survey for our area. We were also told that several
people may get salary adjustments because of this. The next "communication" was that 4 people got demoted
(Re-classed as some would say). The only way these people knew that they got demoted was by accident. One
got a phone call from a peer in Portland saying "i thought you were a manager, but People Finder shows you as
a Senior Specialist". Another was filling out her timesheet and just happened to notice that her title had
  changed. Our management blamed this blunder on HR and claimed to know nothing about it. I find that hard to
believe. Instead of handling the situation immediately, our management didn't address it with the involved
people until probably at least I month later and never addressed It with those of us who were not involved.
Morale in this group remains extremely low because of this incident. .

  This being said, I am very pleased that Mr. Lay is back In the saddle. I hope that changes are made and that
Enron again becomes a great place to work. I've only been here 3 years, but the change in that time has been
shocking. The reason that rve been so candid in this survey is that I truly believe in Mr. Lay's ability to turn
things around. Without honesty this survey is useless.
  In EBS, the huge uncertainty about the future is deviating attention of many from the challenge. Perception of
another round of significant redundancy is highly distracting.

  Perception of much of previous management "moving on" creates a perception of signifloantly less exciting
growth going forward, cf the past few years. If growth opportunities are slowing, then job becomes less
exciting, and one begins to look for better paid jobs outside.

  Redundancies at banks doesn't look so bad when they get 6 months pay on notice - Enron overall package is
slipping badly, especially given share price fall,

  There appears to have been an imbalance between number of and skill of senior commercial employees
(Directors, etc...) Including well-compensated "US expels" living comfortably on an overseas posting and lower
Level employees. i see too many "questionably qualified" directors overcrowding some teams. US expats issue
seems to have been addressed recently - going in the right direction.

l Enron has great potential and great Ideas - Ken Lay admired widely and appears approachable - more than Jeff
Si;illing was - more o en communication is, however, needed at all levels underneath Kent Lay to address real
concerns which have been bubbling away under the surface through 2001 and were obvious to so many but
I appeared to be ignor d by all levels of management.

  This survey Is evidence of It starting to be addressed properly and is welcome.

II am hoping management can address the challenge to retain talent at all levels - this Is the chief reason for
failure recently. People could

  i
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0 prc is a positive process taken to extreme, too much time wasted. the employee who performs a vital function
  who has little potential to grow is not tolerated, which is stupid. some people simply are role players, period and
they have a lot of value! enron's way or the highway. we shall see If that works in our business, but, it appears
arrogant.. not sure front, middle, and back office structure works in all applications. need to polish image, post
skilling (who did project an image of cocky self assuredness, not to say he wasn't good but the public and the
market are fickle.
a White I trust Ken Lay and I trust my immediate Director I sometimes wonder about the management layers in
between. Their methods of management seem erratic and sometimes even antagonistic, which definitely does
not fit with our values (respect). I also worry about our accounting methodology (e.g. the Wall Street articles
regarding our company and talk of "pro forms" results). I'm in one of the old "boring" departments that have
steadily performed over the years helping support all of the new ventures that have come Into existence. I
would like to think that ALL the layers of management would share your desire for Integrity and respect, both for
customers and for employees (your survey would not necessarily show that because of the way the questions
are worded).

+ 1 believe that the management changes that have taken place In the last month are good for our company. Jeff.
Ken, Kevin, and Cliff were very intelligent guys, but were extremely arrogant Let's check the attitude at the
door and go make some money. I felt like were spending too much talking about making money Instead or
going and doing it) I am excited about our new management team!
a I was offended with the recent communication stating the departure of Ken Rice and Kevin Hannon.
  Specifically, the part that gave them a very nice pat on the back for a job well done. Maybe I'm naive, but I think
many of us know what contribution they really made and personally I would have appreciated the
communication stating...Ken and Kevin have decided to leave Enron and we wish them the very best -- and
leave it there... as this communication doesn't have any fluff that might not necessarily be true.
a With Ken Lay at the helm Enron will be restored to its former glory with a little time - confindence by all in-house
and client base will be renewed. .
  We ALL Will have to give that little extra humfp to reach these goals. We all should pitch in because only WE
as Enron will benefit from these goals, but we ALL must try a bit harder and not succumb to too much gossip.
a Keep up with the surveys they are good for employee morale, I'm glad Ken is back - think it will be all right from
now on.
0 There should be more Enron and Enron contractor days or weekends so that we can meet more people that we
work with. Maybe having a bar-b-que or something where we can introduce and meet others that work in the
same building as we do,

a During Tom Whites heading of EES a lot of former retired ARMY personnel were hired. The problem Is, these
people have not "left the Army". They still "bark" orders and expect their demands be carried out without
question. I worked for a retired 2 star major general in EES up until the end of July when I moved to another
position - he WAS/IS derading to employees under him, uses foul language, and has absolutely no respect for
people with titles lower than him (he Is COO). This was brought to the attention of my HR person but he is
completely under the "thumb" of this person and has no backbone to stand up to him. Of course I suffered
retaliation and now I am back with enron Corp and enjoying it very much. This is not the kind of management
that Enron should embrace!!
  RETIREMEMT - I have been with Enron for 23 years and will be retiring in 6-7 years. The horror stories I am
hearing about people taking retirement are unbelievable. There Is NO ONE to talk to anymore. Everything has
been outsourced. I called the 800 number last week to inquire about some benefits and the-person I talked to
was very nice but didn't understand a thing about Enron. Every question I asked I could hear her typing in the
question and then reading the answer off the screen. Then all of a sudden she said - by the way how old are
you. I told her and she said, well that changes everything, 1 guess I should have asked that at the beginning.
For us who have been dedicated and loyal to Enron with our years of service deserve better treatment than
  this. We have questions and need answers, not some automated pick I for this and pick 2 for that, we need
informed people to talk to that can answer our questions.
  I am pleased that Jeff Skilling resigned. He is without doubt a very brillant man but has absolutely no people

Thursdm,. Seplemher 06, 200)

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  skillst If you ever asked the question about how to balance your life between work and family his answer was if
you don't like working long hours and weekends - get out and find something else. This attitude has done a lot
of damage to Enron morale. The layoffs with Broadband seemed to be handled in a very uncaring way. The
day the layoffs were announced Enron ran a contest asking people to submit reasons why Enron reorganizes
all the time. Poor poor timing!!!!
  I am very proud to be an Enron employee and the work we do in our community. I am very happy Ken Is
"hands on" again and will help to get people in the top positions that not only can bring our stock back and take
Enron to the top but will also have people who care about the employees again.
  if anyone would like to discuss any of the above comments I can be reached at 3-6107. 1 would appreciate the
promised two-way communication.

0 Not that It will make any difference; but I will tell you that the perception and daily discussion among the privates
and corporals is that the Generals lost the battle and were paid EXTREAMLY well anyway. The ground troops
now have to cut back and cut back and suck it up to make up for the Millions and Millions and Millions that
walked away.

  You know, when you win the powerbal Irrespective of your success or failure there's really not very much
motivation to make sound cost effective judgments. Every single employee knows that Broadband was allowed
to spend money like a drunken sailor on shore leave.
  The people responsible for that failure and others (Dabhol. EECC) left here never having to work another day in
their lives if they choose.

  If 1 fall at m y job I don't get millions, I just get shown the door.
  People talk about senior executives being risk takers and thus justifying their compensation.
  it seems to me that the only people really taking risks are those of us who don't win the Executive
Compensation Lottery we just get laid off.

  That's my comment; not that It will make any difference.

  You know, having said all that, I still find Enron the finest company I've ever worked for (and I'm a fair amount
older than the Enron average).

  Ken, if you read this, there is a reason YOU received a standing ovation. LEASE take care that your ultimate
replacement earns and values the respect you elicit. The employees of this company find you an honorable
man. Many of your senior managers recently would be found wanting in that category.
0 Our company just joined Enron in April. It was a very welcome change for most of the regular employees.
However, we are finding our area of the country Is sadly lacking getting attached to the values and rewards of
Enron. We are anxiously awaiting the heard about system of employees being allowed to pick people to
evaluate them. Mainly, getting anyone in management to sit down and LISTEN to conerns and Ideas the
employees have. I understand Enron has taken over several companies and is much slower at the present in
getting their values in place with these companies. Enron needs a way to get these promised systems Into
place.

0 I strongly suggest that upper management throughtout the company read an article called "The Human Side of
Enterprise" by Douglas Murray McGregor, paying particular attention to the section an the Conventional View
and Theory X. The ego and self-fulfillment needs of Enron employees (as outlined in the article) are not being
met. I feel this has deteriorated in the recent past and needs to be rebuilt. I am very excited to have Ken back
as CEO. It gives me hop that things will get back to the way they once were and managementall across
Enron wilt once again be nited and in communication with each other rather than divided and only worrying
about themselves and on'a rare occassion, their own departments.
0 Enron has moved away from being an employee sensitive company. All of our Visions are about being the
largest, most profitable company in the world. All focus is on the bottom line - return to stockholders and
no(llmited focus) on employees. All we hear about is earnings, return on invested capital, cash flow, PRC
process with forced rankings. What about employee morale? It used to be a great & fun place to work, but

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I management has lost its focus on the employee satisfaction. All of the ex-management committee members
have left the company with huge bags of money and the base work force Is still left to carry on the work of the
company. Bottom line focus is necessary, but there is a balance. It would be amazing to see how truly dis-
satisfied employees are and how they can hardly wait for 5:00 each day and for Fridays. It never used lobe that
way. Management must get the employees back into their strategies and make Enron once again a fun place
to work. Also, management must truly walk the talk on respect -with the extraordinary focus on numbers,
respect has taken an a false pretence. Not many employees really believe that Respect is truly practiced - you
I must meet the numbers and respect is trashed. Look at the compensation - the big bonuses go to the #1 &
#2 performers (Pay for performance!!!), but there is little recognition on the value side of the evaluations in
determining the rankings. Bring in the numbers and you are rated high - despite how you rated on Respect,
I integrity, Communications, and Excellence. We have been told Values don't impact ratings - only making the
numbers doesll The balance has swayed a lot away from the employee and to just a bottom line to make
Enron the world's largest company. What good is that Vision if the employees don't buy into it??????
  i I would like to take this time to welcome Ken back and to say that I have the utmost confidence in his ability to
bring Enron's reputation (and stock) back where it belongs.
  ,& I am a contractor, so I don't really know if am suppose to fill this out. I just wanted to comment because I do
I work in your offices and hope possibly to become Enron. I just wanted to say good luck to Ken, everyone
seems to be pleased with your determination. I believe you can make Enron better-

  There needs to be a decesion made and communicated about what is to ultimately be done with EES and the
former EES employees moved to EWS and Networks. EES has failed. This needs to be accepted and action
taken to only offer wholesale products. These products could be offered to customers which are considered
retail. There Is certainly money to be made in this regard. However, there is no money to be made in
  citygate/burnertip transactions. Furthermore, any margin EES can get can not be completely hedged. EES
systems are so primitive and fragmented, any value gained- in origination is lost by EES's Inability to properly
book, contract, bill or properly represent it's trading positions. In other words, operational risk Is huge. EES has
been booking fraudulent revenues for years to meet it's goals. Even then, wholesale has been forced to bail
EES out to the tune of several hundred million dollars. EES should be entirely swallowed up by wholesale. For
the most part, the current EES employees will support and accept this decesion. Most employees just want
closure. An "in-limbo" situation has been in effect for over 6 months now. At this point bad news is better than
no news.
  i Thank you, Mr. Lay, for stepping back up to the plate!!!!!!!!
i
  0 Please make restoring investor confidence the number one priority[ We need to explain our infamous black
box as much as we can. Too many peopie/writerslanaysts just don't understand what we do and it's hurting
our stock price. Please investigate what's going on at EPSC. It's the most miserable, inefficient company at
Enron, (t don't work there but I deal with them.) Bill Donovan does not live the values. With the new building,
we MUST have an efficient facilities management function. I don't care how small my cube is, I just want a
facilities function that,works. Innovation has passed up EPSC. Thanks for asking and good luck, Mr. Layl
  0 Now let me tell you the major issue I have. Stan Horton in the process of saving dollars is allowing Phil Lowery
to run our pipline company to ruin. We are not allowed a budget that enables us to property run this pipeline.
We ask for O&M monies to paint and treat corroded engines and pipe. Is it there? NOl They say, "take it out of
i your existing O&M budget which is already so flat that it won't meet our day to day operational requirements-
We ask for monies to maw our right of way so that we do not have 40 foot trees growing over our pipe. Do they
give us the money? ,No again! 'Take it out of your existing O&M budget'they say, knowing it hardly will support
our failing forty yearrold equipment. The real sad part of this story is that people like Phil l owery make promises
to turn back 33 million to Stan so that he (Phil) looks good and prospers; you know personal gain without regard
to others. Well we would like our operations to look good too and were not expecting great big personal
  bonuses in return. We just want a safe place to work, one that looks good, and something we can be proud of
and tell others good things about. Oh, one more thing. Relieving the stress of trying to manage a billion dollar
operation on a hundred dollar budget would help feelings around here. This is my opinion and I know that those
in control will only say that I don't have all the facts. Well this is true, but this one fact I do know, we better get
more monies to operate this pipe or we are in for hard times. Thank You for your time Mr. Lay and may we all
  i
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genuinely make this a better place to live and work. From a concerned Florida Gas Transmission Company
employee.
  PS. My intentions were not to do harm to Mr.Horton or Mr. Lowery because 1 do realize they don't have all the
facts either.
 I am glad the you are back Mr. Lay because your present in the
for-front makes a difference for Enron.
 I believe that we need to spend more time focusing on our values with an attitude of 0 tolerance. I have seen a
lot of employees mistreated and shown absoluttly no RESPECT. The most disturbing thing concerning the
RESPECT issue is that when an employee speaks up and voices their concerns they are told they are being too
sensitive or taking things the wrong way. They are not taken seriously.
  I would suggest that we focus on our values to the plont that they are understood at all levels .... from clerk to
VP.
0 1. Reevaluate our agressive mark to market approach to booking earnings. While it makes sense to work within
the letter of the accounting law, I've become uncomfortable that we are pushing the limits within illiquid
transactions to recognize income today at the expense of carrying forward risks that will hit earnings in the
future. For example, using insurance to guarantee the mark to market value of a business unit's spread in a 10
year deal so it can be taken Into earnings. By by insurance, they satisfy accounting requirements, but they are
paying away a significant part of the economic value of the transaction to gain the upfront accounting treatment
I believe this agressive approach has hurt our credibility on Wall Street and contributed to the quality of
earnings question being discussed by many.

  2. Over the past 6 months, my interviews of associates/analysts and managers has been disappointing. There
is a clear trend away from taking career risk by getting involved with new business ventures. Several have liked
the job opportunity, seen the upside potential and yet have decided against taking the job because they wanted
a safer more secure business area to work in. I believe this is more than a reaction to the failure of EBS. It
reflects a commonly held belief that the people,who take risk and try to start up new businesses within Enron
don't get compensated in the early days for taking that risk. The PRC process and bonus allocation at year-end
reinforce this. The message coming accross seems to be encouraging a large pool of people to want the
security of mature businesses and a certain path to making money. How can Enron stay innovative if this
attitude becomes prevelent in the ranks of very talent we're looking to for the next new business idea? Our
greatest strength has been and needs to continue to be pushing the envelope and taking risk on new ideas,
without the fear of failure getting in the way.
  I strongly recommend looking at removing the preferred distribution from the Pty process. ...it has caused
great problems in our area, and caused morale to drop significantly. Thank you for asking[

  Also, surveys such as this are great. The fact that Enron (Ken Lay) solicits our input means a lot to me, and I
truly believe he has every employee's best interests very much at heart. This is the reason I stay here and that
we can weather the stormy times here.
0 The Performance Evaluation Process must be fixed. It is the most demoralizing thing happening In the
company. The PEP forms and process of direct supervisors sitting down with their reports and discussing
performance is great, but this is blown away by the PRC committee meeting later and producing Forced
Rankings that are unfairly penalizing employees with lower ratings than they deserve. It would be much more
fair to give the supervisors an allocated pool of bonus money and let them apportion it to their direct reports on
the basis of their own evaluation reports. This whole process should be done only once a year. It's currently
killing morale In d is setting the stage for potential lawsuits if not changed.

  I am appalled at the money being spent with 3rd party engineering support by the developers. The company
needs to consolidate engineering into one central source, which will reduce overheads and development costs.
I would also suggest a different CEO for EEOS. This is our third leader since Izzo left. Our current CEO has
no stated vision or direction, hardly ever attends any of his own staff meetings, is not involved in the details, and

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does not carry out regular monthly financial performance reviews. He recently commented that at the end of
each day he wasn't sure what he had actually accomplished. I'd say that sums it up. The first-action taken by
the new CEO/COO when they took over EEOS was to eliminate $1 million for the EEOS oversight functions of
NEPCO. This may have looked good in reducing overhead costs, but now NEPCO is in financial trouble on six
of the fourteen projects it has under construction, with two of these projects alone suddenly losing about $17
million, with no warning, and more losses to follow. This is not good executive management.

it Enron will continue on its downward spiral until it starts to treat people fairly. The PRC process is demoralizing,
and it brings out the very worst In people, as the management scratches for position and places Its buddies in
the top slots while ignoring the pear reviews of an individual. As these Individuals cannibalize themselves,
distrust builds to the point where I have a strong disgust and disrespect for the managers here. Also, the youth
culture here, while it brings talents and energy, also contributes to the heartlessness, as the younger people
seem to have an arrogance and lack of compassion that comes with maturity and having the experience to
manage people correctly. There is no regard for engineering talent here. That being the case, we should never
have started EES, as these projects are based on engineering principles. Our obvious lack of competency In
performing these projects Is the result of not hiring people with engineering and construction background. The
Incentive system for the field people causes them to focus on their personal bonus instead of doing what is best
for the customer or what is the most sound solution. I wouldn't want EES touching my facilities if 1 were a
potential customer because I see Enron as incompetent in managing projects. Enron is awash with too many
MBAs and PhDs with no practicality or common sense. A lot of our difficulty In EES has been brought about by
outlandish ideas on how projects are to be handled, again ignoring the value of engireering. After the layoffs,
the current staff is left stunned and with no direction. Managers are being inserted between the real workers
and their previous management, and no decision making ability of any seems apparent. I have worked for two
utilities, and Enron has become the embodiment of what gives utilities the inertia in trying to carry out initiatives.
Nobody is empowered to accomplish their task, and everything seems to go to committee at my level. 1 no
longer have the drive to accomplish, because someone will tell me why I can't do it.

  One positive: Ken Lay is a great guy worthy of everyone's respect, and I believe he can turn It around. He's
one of the few gems around this war zone. I finally bought some stock on August 14 knowing he wouldn't let
this company go to ground.
I No good public PR related to CA probelms, friends in CA think Enron is a "bad" company that has taken unfair
advantage of them.

  The PRC is a joke and needs a complete revision.

  The PBS program of the CA problem did not present ENE in a good light, ENE.looked like a big self serving,
arrogant bunch of big wigs.

Why not propose to CA that Enron provide the power trading service on a "free" basis, with our only cost
recovery a 10% share of a savings below the average power price for the day and some kind of a cap price.
Maybe there is a way that we could make this issue a positive rather than a negative.

  We need a major PR effort from top management, lets see you and the new mgt team on TV boing proactive in
resolving the probelms, not just saying we'did not do it.
  The current stock price is definitely an Issue at the moment. It's dishartening to see some executive
management (Ken Rice bein an example) cashing in large quantities stock options - at very low s4rick prices.
This is public information ancf makes the rest of the empioyess wonder what's going on with the company. A
moratorium on executive management from selling stock options given until the stock reaches a certain point -
perhaps 80 to 90 would be very appropriate. At the same time, this would be a good time to have some
executives put their money where their mouth is and buy Enron stock for the long term.
  There needs to be more value placed on technical expertise, rather than financial engineering and theoretical
mumbo-jumbo.
  The politics and back stabbing in EES needs to end to keep and attract talented people.

ursdur, Sepr7. l&'r 06, 2001

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  I used to think that this was a place where you where rewarded for what you know and how you applied it rather
than who you know and how dazzeling your powerpoints appeared.
  Hopefully, Mr. Lay can rid Enron of the mean spirited sneaky attitudes that seem to be encouraged.
  1 think Mr. Lay is TOP. He is the greatest and I am SUPER happy that he Is back as our leader. May God
Bless him.

  My other comment is that this company had always been THE greatest company to work for up until a year ago
when the monetization of assets began, leaders started resigning, other were "redeployed and everything went
haywire. I know we should not put all our eggs In one basket, so I believe we should not rid ourselves of the
assets but Instead we need to distribute our workforce and give it our best efforts to continue being diversified
and productive In all areas. I liked very much preparing bids for pipelines, power plants, etc. You might be
losing all your best people that feel the same way to a pipeline company in town.

  I really like the phrase "LAY it on the line!!!

  i Would be nice to have quieter work environment (less interruptions of work flow and thought process). I believe
my balance of work and home life would be improved if I did not have to work weekends to make up for time
lost during the week due to interruptions.
  * With the SAP system, several promised options were untrue. System Is too cumbersome & bandaged. Too
much outsourcing has taken place w/no procedures in place. With lbuyit, we cannot purchase pipeline supplies
at some locations because vendors are not being paid. PRC Is not fair. Employees are being rated by mgmt
who do not know them or who have not even spoken wlthem during the year. Thank you for this opportunity to
comment.

+ We have gone from a company that had pursued growth aggressively to a company that wanting to protect
what we have. The result has been a gradual downfall of an empire. Instead of leading the pact and being the
envy of the industry, we have become just another company. My admiration for Enron and the reasons I came
to work for Enron were the forward view that Enron took on all aspects of the business and risk management
capabilities that have become legendary in the industry. We have walked away from that and trying to protect
(not growl the business, through commodity only.

Suggestions:
Confirm our commitment to the businesses we have undertaken - EES. New Power, Broadband, etc.
Show the market by action and not by words that we are serious about our businesses. Stop bleeding the
talent pools (layoffs).
With EES bring in new deals and accounts to continue to grow the business. We have not had any major
contracts closed since Feb. 2001,
With New Power pursue, acquire and advertise the customer growth. No news in this industry is considered
bad news.
With Broadband put together a vision of where we want this company to be. Consider acquiring/merging with
other broadband companies to strengthen our position.
With Commodity advertise our successes. California is only a side Issue now; Lets move past that.

  1) Issue/Comment: Companies under consideration for asset sales are looked upon as "ugly stepchildren" by
Enron Corp. thro gh no fault of the Individuals employed within those companies. This is Illustrated most
recently where indications are that employees of these companies have not been made elgible for Ken Lay's
special 5% option incentive, despite being current employees (and not In redeployment), and no purchase sale
agreement yet signed.

  This is both morally and unethically wrong given that if no PSA is signed than no sale has taken place, and all
remain as current employees working the assets for the continued financial benefit of t:nron Corp. This has
taken place without any explanation given by Enron Corp as to why? to affected personel.

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2) Issue/Comment: Enron Corp puts extemety high value on MBA's and their related associates program. This
is understandable. Still, at the same time, highly educated I qualified individuals with other degrees such as in
the engineering fields are treated as second class employees, with their career oportunities somewhat
"restricted' because of the over emphasis on MBA's. This has become even more evident as the efforts have
been directed toward selling assets and focusing even more on the trading side of the business.

3) Comment Enron Corp seems to consistently go out of the way to "avoid" commenting on the finanial
contributions made by some particular companies to Corp. Our company made over a $100 million in net profit
in Year-2000, but not once during the past couple of years did our company even receive a footnote in any
presentation by Enron Corp management (Lay I Sutton / Skilling) at employee meetings, presumable most
recently because we are an asset up for sale. By comparison, Broadband got lots of press.(all positive early
on) despite not making a single penny profit during Year 2000. Our company wasn't even acknowledged during
"new employee" orientation. Same for many other of the smaller companies. Seems if you are not
"Broadband" or "Trading" you aren't of much use to Corp.

i 1) internal competition (i.e. driven by the fact that each unit has to provide -survive based on- its own profits) is
NEEDED/REQUIRED but not "sufficient" to ensure Enron's success as a whole.
  The sum of "local optimums" ONLY give "the global optimum" In a market environment, when markets are
"perfect". Therefore, we need a better set of internal contractual agreements that allows us (Enron) to reach a
"global optimum" on each deallbusiness opportunity we Identify/pursue making each buslenss unit to be as
focus on the size of the pie as it is on the chunk it is going to get. There has been various business opportunites
and deals not takentsuccessful because of units being too much focus on what they are going to get from the
deal over what Enron Is going to get from the deal. (Having stock options Is a good first step to make us think
"globally" but It Is too diffuse compared to the effort/reward on an individula basis...) We need an additional step
that better ties individual performancelreward to the overall performance of the company, internal "flexible and
opportunistic" dea !business based contractual agrements among business units could be the way to go,

  2) Need more internal control over origination and investments, specially overseas. To really understand what a
product is about and when it is best to be sold, Is as important as to sell it. Rewards should be tied not only to
the "selling event" but also to the "performance over time" of the deal itself. We need to make the deal people
accountable for the overall impact of the deal on Enron, of course, to the extent that it was up to them to affect
such outcome.
0 .1. 1 think Jeff Skilling's biggest problem was that, despite all the media blitz, he was not a charismatic leader,
like Ken Lay, Lee Iacocca, Herb Kellerman. Enron used to have VERY charimatic leaders that the employees
loved like Ron Burns and Rich Kinder. There are no longer leaders of that ilk here in Enron. External
  customers would hear Ron Bums speak at industry functions and call to say "I want to work for that man!" Jeff
Skilling could not engage that charisma with the media or with the employees. Greg Whalley Is even worse.
I've worked with that man for six years. He is mean-spirited and hateful to employees. I have seen him be
mean just for sheer enjoyment. He has no charisma, in fact, outside peers have commented on his nastiness
to customers and employees alike. I think you're moving in the wrong direction by selecting him.

Furthermore, something must be done about PRC. It does nothing but demoralize and produce the aggressive,
nasty environment that makes most employees leave. First, it undermines the first line manager, who may feel
the employee Is doing a great job. Second, while it may produce the competitiveness that Enron strives to gain,
it also produces an aggressive, back-stabbing, unconstructive environment that Is too difficult for most people
to exist in. (In short, only the nasty survive!)

Finally, I work in risk maragernent. I have seen VP's and trading directors make up a number, call down to the
risk managers and say, this is what I want to report today. Move the curves to make it that way. I have seen
directors tell traders to move curves In outmonths to generate income that the traders did not believe was real.
I have seen traders leave Enron because Enron tampered with the "ethics" of the curves, and I have seen the
trading directors deride traders who tried to stand up to his ethics. I have seen trading directors instruct book
personnel to boost volumes an long term deals that aren't there to generate quarter earnings, only to have to

  i
Thumdr '. Sv'ienncer 0h, 21X11

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  reduce.those actuats later down the road. It's unethical, and as a stock holder, I can understand Industry
skepticism.
4l I have been through quite a few changes at Enron over the years. The best change was Ken Lay coming back
this month!! There was a definite change in air at Enron when he stepped aside. I'm excited that he is back.
Enron is a premier company to work for.
a The-PRC process should be changed so that it does not demoralize and crater the self-esteem of good workers.
A look should be taken at age and sex discrimination.
  Our HR groups seem to be focused on just keeping the wheels on the processes rather than being a resource
for employees and management I asked about a payroll problem and the HR rep said she didn't even know
who to call.
  I didn't get a bonus or a pay raise this year after being a top performer most of my career; my boss gave me a
"reimbursement" in lieu of bonus which I attribute to her sacrificing my rating to others In the ranking process. I
was being rated against management who had huge staffs while I was leading change projects with little staff
but utilizing many employees on Implementation teams. In short I feel the criteria for success is skewed
toward high profile jobs who get lots of attention. Success for Enron depends on lots of successes in many
different avenues.
0 I commend Mr. Lay for stepping back in his original position. I and others feel EXTREMELY confident that
Enron will become a better company to Invest in and a better company to work for in the future. I for one was
thinking of leaving Enron. but have reconsidered since Mr. Lay Is back in charge.

  I also commend Mr. Lay for admitting that there are great morale problems and he Is ACTING on it! It is so
Important to have a leader that wants what's best for his employees... just like the way it was when I started here
5 years ago.Employees with high morale will perform better and exert a positive image for Enron. For the
public to have a positive image of Enron, the employees must do so first.

  Lastly, I have a concern about the Later Move Policy. In my recent search to move to another position within
Enron, I have been told by several HR representatives in various business units that an unwritten policy (an
understanding between business units, so to speak) has been put in place that employees moving Internally
within Enron will be strictly lateral moves. I find this somewhat unsettling and unmotivating.

I've been with Enron over five and a half years and have held four very different positions. This has allowed me
to see and learn different areas of Enron and I feel that I am a more knowledgeable and marketable employee
because of this. In the meantime, I have earned both a SBA and MBA hoping to increase my chances of
advancement. The lateral move policy will no longer motivate me to experience other areas of Enron, I also
find it unsettling that employees leave Enron only to come back two months later for more money and a higher
position that they could not achieve had they stayed (I have seen this for a fact).

Will this policy ever be removed or relaxed??

  Enron Stock price dropping is something that has changed the attitudes of the people t work with locally. The
desire to retire somewhat early is being rethought. The idea of re-verifying to meet the DOT operation
qualification rules may be a deciding factor in whether to stay with Enron or not. There are at least 3 people in
our field team of 12 that probably wilt base the decision to leave the company on how cumbersome the tasting
process will be. Riling the gap when they decide to leave is a concern. We have one person with 2 years, 10,
15. 20, and the rest have over 20 years of service and experience. Where do we get the expertise to operate
these facilities SAFELY and efficiently when these people leave?

  I hike the fact that Ken Lay is; back in the driver's seat. Mr. Skilling's persona portrayed an image of a spoiled,
arrogant yuppie. I do not know the man personally but the image portrayed in the business publications did not
give Enron an image of integrity and respect I am proud to work for Northern Natural Gas Company, of the
history that exists in the field locations, the coming together when an obstacle needs overcome. But I don't
think the public and the financial community always sees that side.

 Thrrnifgr, Selgrennher 04, 2601

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  -- I , III I ~1~~9
i Ken, the new stock option is certainly a good step, thanks. However, some of us were caught befieving Jeff s
$108 price prediction and are now faced with stock options expiring in January and May. It could help us a lot if
Enron could add an additional year to the original term of stock options that expire in 2002. This still keeps the
employees' goals aligned with stockholders. Is this possible 7
a if stock price can return to highs of the last year, the stock options would be really great. As 7t is, we have to
hold and hope for the bast. More telecommutirtg and flexibility in work schedules would increase employee
productivity, especially with cramped work space and many hours spent commuting through traffic and
construction. With regards to PRC, I'm uncertain how well the relative ranking aspect is working out.
Individuals do not feel valued in spite of improved performance, experience, good work ethics and
contributions. In the IT areas, it is common practice for employees to work long hours, weekends and holidays
all year long, year in and year out, It has become an expectation, even though we encourage our employees to
take care of their families and personal lives. The practice and expectations do not match what we say.

i We must team how to handle customers. We are acquiring customers daily and we must do much better at
servicing them and retaining them. Ken, we must really do something about PRC. The morale this time
around was awful. I agree totally with the peer evaluation system. However, it is the committee and ranking
process that turns everything sour. I have had to review people who receive great feedback, however their
overall ranking from the committee was low due to reasons beyond my comprehension. Then, I had to provide
the one on one review and I really couldn't correlate the evaluation with the ranking. This is definitely not fair
and is demoralizing. We must find a better way.

 Ken, we need you to restate the importance of the team concept. Drive it home! Our directors and VP ain't
walken it or talken it I realize the importance of our international presence, but we need to step back and take a
look at what makes people want to invest in our company. If we can't resolve India, let's get out. I know
deregulation is tremendously important to our future but we need to give investors some confidence in our
California (financial) position. Just exactly what Is our exposure? Finally. employees need a clear and
supporting position on self evaluations. The 2001 mandate that XX % of the people are to be rated substandard
was not only wrong, It destroyed moral. We have the best damned pipeliners in the world working at Enron'and
there ain't a one of them that is substandard. Ken, you need to tell us that. Thanks. Jim Sanford Omaha
i My unhappiness with my stint in Enron has little to do with the more macro issues that the company faces, but
the more micro issue of favoritism shown to analysts that come from Wharton. Most of the high profile work
within my group has been systematically given to Wharton analysts as a first choice, and only spill ovens are
given to analyst from less prestigious schools. In addition, 1 have seen a fellow employee, with 2 years
experience with Enron, being told that he was to be given a stint in London, only to have the promise of the stint
broken, and given to a new hire analyst from Wharton. These are just a few examples of the gross unfairness
that goes on in my group that makes me want to leave the company. Part of the problem, as I see it, is due to
the fact that being a foreigner Is a slight disadvantage in the company because my sense of humor Is different,
and that hurts my ability to make an impression. I feel that there might be a remote possibility that form might
just be as important as substance, if not more. I guess I am in Enron's pond now, and I should try my best to
play by its rules, my only. fear Is that form might truly be more important than substance, In which case, my PRC
won't be what I expect
4 Enron has become what they are by the leadership from within all the levels of the organization. While under
Mr. Lay's moral leadership the organization has attracted like kind of investors and employees. When Mr. Lay
left it was my fear that without the Godly type of leadership provided by him that this Company would go down
hill. Moral and sound leadership Is by far more Important than sheer abilities. The Key to the stock price Is the
value that the company places the employees and the values of thier leaders at all levels especially the man at
the top.. Yes it does roll (down hill.. '
 Given the recent layoffs!: redeployment and voluntary leaves, the overall work atmosphere at Enron appears to
be severely damaged and people have lost motivation. Enron's executive management its exercising millions
worth of options, either forced to by expiration or voluntary. Departing executive managers also show a signal
that either something is going to hit the fence ugly regarding Enron's earnings, cash flow or balance sheet, or
individual challenges or opportunities may simply have dried up. (Or personal lives have been forgotten for a
decade In the quest for more and more money) My impression is that the decrease in motivation is partly due

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esprulse
to the fact that there has been a significant decrease in opportunities for interesting assignments and
responsibilities that provide personal development opportunities with the Increased focus on the trading
business. It does not require a whole lot of intellectual skills and medium to long term vision to sell commodity
structures and trade commodities. So I'm wondering why we need MBA's for that (naturally because of the
networks). Simultaneously, profit margins on trades are decreasing rapidly and trading volumes wilt soon see or
already-see a decreased growth rate due to Increased competition and market limits. These Items clearly tell
me that the current trading business is unsustainable In the longer term when relying on less assets. Nothing
against trading as It is merely the more effective utilization of our existing and new networks. However, with
trading margins decreasing and less reliance on the productive assets, the end result could be a financial
bubble. To me, and to Wall Street, quarterly figures are Important but by not having a sustainable long term
vision and strategy, combined with limited productivity (and economists have to agree that trading in its essence
does not add real production to the economy), the future of the company could be at stake. In addition,
change, trying new ideas and being 'a first player in the market is good but only to the extent that there really is
  a market (lessons can be learnt from Philips Electronics' experiences). Rupturing up group structures each six
months with a change or restructuring is probably not too beneficial for people's motivation either, just as having
3 feet of office space and a PRC process that probably takes up half a year of our HR-departments time, and
ranks people not only for their performance (should be) but also for the level of conformity. This conformity
severely limits the creativity of Enron's employees. Simultaneously. Enron recently seems to have taken a
typical 'U.S. foreign policy approach' towards the outside world by acting arrogantly and confrontational and
sometimes even avoiding negotiations with mutual benefits or intent of sharing long term Interests. Perhaps this
works in the U.S. (maybe not in California), but certainly not In Europe and the rest of the world where lack of
integrity, arrogance and a short term look at business relations will be punished, certainly in a slow economy.
Although attention has recently increased on cost savings and rightly so, I think It is more important to look at
more effective execution of projects, one of the main reasons why our international assets are performing so
badly. Again, this could also have to do with the confrontational or military approach that we'd do things no
matter what, without understanding the real values of other cultures. Despite. globalization, people in the world
will continue to behave differently and limits to (a company's) growth will be reached sooner when taking the
wrong approaches. Looking at deal execution will also include analyzing our bonus structure to be more
compatible with the long-term prospects and execution of deals instead of solely based on the closing of deals,
including bad ones. it is not too hard to figure out that, In the case of Azurix, water Is never going to be traded
as gas or electricity, certainly with a foreseeable global shortage of fresh water. Populations have and will claim
a basic. right to water, although some countries use it to hold other countries hostage. Summavizing. a lot of
attention at Enron is being spent at watching our stock price on an hourly basis, while, to my opinion, more
attention should be paid to rational investment decisions and productivity in real economic terms! As a result of
the latter, nobody should have to worry daily about the stock price. Recognizing the challenges in identifying the
productive opportunities, and realizing the difficulties with billions of dollars in International assets on the
balance sheet with minimal returns, fact is that Enron will have to determine a long term strategy with some
degree of sustainability in order to regain investor's confidence.
0 The push on United Way is getting out of hand. I understand the importance of the campaign, but had other
people that I know spoken to about their lack of contribution. Even though she had logged into the system and
chose not to contribute, her boss was spoken to about making sure she contributed at least $25.1 thought that
information was confidential.

0 t am really glad Ken is back!
0 Force Ranking needs to go.
  Need to get back our core btisinesees, then go forward. .
  Establish a corporate vision d rid direction and goals, and tell us to roll up our sieves and get to work. Give us
the opportunity to participate.' Ken's a good leader, and the people will follow.
$ Ken Lay seems so trustworthy and Intelligent, and I think employees and potential investors want to believe in
him. As for the new COONlce-Chairman, they're fine operationally, but no evidence of vision. And reality is Ken
was on watch when Enron made billion dollar mistake after billion dollar mistake (Azurix, El, EES, EBS. now
maybe even New Power. etc.). And compounding this, the top management who directly made these bad
decisions were compensated in the tens to hundreds of millions of dollars, leaving the line employees to deal
  O

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  with the aftermath, and a feeling that the proper management incentives do not appear to be In place to make
sure that risk-taking is encouraged, but that billion dollar mistakes do not continue - the feeling is that this time
the company cannot afford any more.
  The hardest thing for me about working for EBS was the ability to respect that Enron 1s a Fortune 100 company,
when I saw so much money being wasted on a daily basis. EBS did not set the standard correctly when they
started hiring people and the result was a lot of overpaid, underqualified people doing nothing but spending
Enron's money on travel, food and entertainment. I have never been at a company whos spending was so out
of control. The other thing that really bothered me was the lack of respect other Enron entitles gave to EBS. i
was in charge of making sure Enron's Analyst Conference was webcast and was told on that day, when we
were having network difficulties, that there were people at Enron that hoped EBS would fail. Even if that is the
case, I don't think it was appropriate to be told to me. On that same day when we were having network issues, I
told Ken Rice and Kevin Hannon that Mark Koenig had been very upset at about 5 am and that I just wanted to
let them know what happened so they would be prepared. The response I received from Mr. Rice was, I don't
care about the Analyst Conference, I just want the CNN test to work later today. Again, I don't believe that
anything like that should ever come out of a CEO's mouth, but then again it is the same CEO who drank too
much at the Portland Christmas party and told me I was beautiful. These incidents reflect very negatively on
me, even though I did enjoy what I did and my co-workers. I am just shocked that these type of things aren't
better controlled.
0 Comment: believe Enron has professional and able executive management, and I feel confident that Enron will
succeed if that Is what the executive management deems best for the bottom line. I am pleased that Mr. Lay Is
back. He emulates a sincerely positive attitude. I don't have any serious complaints. r
  Suggestions:Affordable seminars and on site self-improvement classes.
Issue-Wore equitable treatment for all department members, not just a chosen few.

0 PRC -we were all graded on criteria that we didn't know about - there was no communication of what we were
graded on. e.g. the #1 ranked employee doesn't even do the core competency of our dept (URM in EWS,
formerly in EES); the ranking of all of us was up to a single person No communication on our status - URM has
been reorganized 3 tiaras in 2001; each time our directors are unable to tell us what's happening because their
mgmt won't'tat' them - e.g. we are operating in a re-organized group now, and we still haven't officially been told
how we were reorganized. This treatment of'intellectual capital' is disrepectful. it is also poor business
  practice - the employees are left unmotivated and resentful. Values - RICE - R - lack of respect (see item
above), especially with respect to government affairs. i - lack of integrity. we were accused of price fixing in the
Pac NW - did we or didn't we? didn't we eam a tremendous amount of money? doesn't'mark to market'
accounting (of the EES variety) push the limits? C - communication - (see items above) E - excellence - when
the PRC process rewards people we see as incompetent in anything but claiming credit, it's hard to see where
excellence gets rewarded. Doing the right thing as opposed to the self-serving thing only gets one penalized.
  I relocated here from Canada. I have found excellence, especially in the calibre of some associates and
analysts. What I have mostly noticed is the self-serving. 'what's In it for me' attitude of people at the VP level.
this attitude Is then propogated. In URM, a lot of systems were broken or developed poorly in the first place.
Its frustrating for those trying to Improve them (in order to meet goals of sca(abitity and growth) when they're
given no support by people focused on signing the next deal. I would like to know what the engine of EES
growth really is. It seems tome that it should be the opportunity to sell wholesale generation into deregulated
markets. DSM seems like small potatoes tome. This suggests that the tariff curves are not really part of the
picture. Please be honest with us and tell us what you're thinking. Most of us are experienced professionals
who won't be devastated - we want to be treated honestly and with respect. We seem to be a unique group
within our area - this group is made of us industry experts - why does Enron not want to heaeour opinions? Our
previous mgmt (VP level) seemed to dismiss the complexity that goes with electricity tariffs and act quickly
without regard for the advice of others. Most of us came here to team - by isolating us, Enron doesn't learn
from us and we don't learn from Enron. Given the self-interest atmosphere that's promoted here) wasn't
surprised to hear that United Way contributions were slim.

ii It is wonderful having Mr. Lay back at the helm.

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I miss having someone I trusted to discuss benefits issues with. The help line provide 4 different answers to ,
the same ESOP question 4 different times. I even conferenced my financial advisor in on one occasion to try to
obtain some clarity.

  There are so many systems and so many passwords.
 Starting with you Mr. Lay down to the Director level you need to clearly communicate ENRON's goals and
direction and how we plan to meet these objectives for each Division and that they our humanly possible and
not a pipe dream!
0 Over the last year we have lost respect in the investor community with some of the comments that have been
made and the disclosure of our fnancials. I support Ken's abilities and believe and can help restore the
respect, but with the bad ventures that have failed recently and the job loss associated it has taken the steam
out of people willing to take risk and move around the company. Employees own stock and Pike to take pride In
the company but it has been difficult lately with all the bad press. I think by meeting our financial earnings
targets and chaning our disclosure we will again reclaim the Investor community. I hope to be at Enron for the
long haul. I do expect the executive leadership to go out and positively promote Enron as a great company with
high expectations.
~. There is a pervasive theme throughout Enron from associates to vice-presidents and managing directors that if
something Is "NPV possitive by a buck" then it Is a sound decision and worth doing. I disagree and fear that
Enron will not accomplish its value to capital objectives until you Ken send out a clear message to all levels that
a quantifiable metric for return on capital is to be managed to. The theory works if capital is infinite. I am
confident that a dose or reality to theoretical personnel would go a long way in assisting you to accomplishing
the next 5 year vision.

Since there are a variety of my colleagues who have not opted to particiate in this poll because of fear of
reprisal, the notion of confidentiality is something to be sensitive to. Just six days ago a broadcast message
was sent out advising that no electronic, telephony or physical information is to be considered as confidential.
Three days later... "Lay It on the Line" promised electronic confidentiality which Is mutually exclusive with the
prior broadcast message. I thought you should know this; possibly reinforce confidentiality and soliceit
additional feedback.

At the recent all employee meeting Ken, you were wonderful. I sense a disconnect however between EES
upper management and your vision. You need to rectify It. Your overview communicated the truth... EES does
manage physical properties, EES does do facilities maintenance and EES does leverage virtual utility value
from Its sites. Unfortunately, current EES upper management seems to be commodity driven and seems to be
allowing origination to starve Asset Operations (AOPS) and DSM out'of the action. Two years ago bundled
outsources were the origination theme. Last year origination found it difficult to close deals with Asset
opperattons so origination left that to "upseli". This year AOPS was cut to the bone and stigmatised as low
value. in addition, this year DSM has been viewed as difficult for originators to close; thus originators have been
adopting a close the commodity now approach and leave the DSM as upseii. One could forecast that next year
at this time DSM will be people heavy and deal light. The imbalance -due largely to origination focus on the
easy quick sale - will cause EES to cut many talented people who could deliver physical value to Enron. This is
a headsup to align EES to your people doing business with people phylosophy.

When the upper management at EES was asked if personnel would be cut a few months ago the answer was
no. Within weeks redeployment and dismissals occurred.

When EES management was asked if EES would reconsider the click at home policy of full. payment becoming
due upon departure from the company - no click at home participant would expect to be layed off or redeployed
within a few months of enrolling in click at home - the reaction was one of confusion by management. People
without jobs are less likely to want to pay for a brand new computer and upper management didn't get the
message. This was analagous to Marie Antoinette saying to the starving masses... If they don't have bread... let
them eat cake.

  Thur. 'ar. Seplearher 06, 2001 ' Fuge 47 of 88

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The EES meritocricy is more of a popularity contest and very political. As Enron redeploys or removes talent
new personnel are hired. Many of those positions would be very appealing to EES personnel. The Directorship
for Load Curtailment is one such an example of a new hire (and friend of a EES VP) coming into EES filing a
newly created position which was not posted. EES can not place the very best individuals in the most
appropriate vacancy without Internal competition, needs and credentials based scoring etc.

  On the above point, HR is failing the system for neither setting leadership nor gate keeping the matter from
happening.

  Middle and upper management within the opperatinng group is conducting very expensive "on the job training".
The shareholders deserve better from your support or executive committee on down.

  The number of re-orgs are professionally embarrassing. In the beginning it played well that EES was tacking
like a sailboat making course corrections. Now it is clear to the marketplace (and hopefully to you Ken) that re-
orga are a confirmation that EES management can not execute on vision becasuse it does not understand the
business.

  EES management is well rewarded. The rank and file are not. We live from paycheck to paycheck and are
often very experienced in this industry with no desire to be "Just passing through". We want to be heard and
offer the kind of value to the share holders that you expect from us. Management has admitted in open forum
(floor meeting) that it does not know how to get the job done, that is for us to figure out; then they will deliver our
work up stairs.

  This creates a frustrating workplace and it demoralises the team because the management admits it is not on
top of Its game.

  EES is a very viable cornerstone for Enron. This is a fabulous business model. The execution of it is not the
"high lever' 50.000 foot approach any longer. The value is in the details. The commodity product Is price
sensitive four places to the right of the decimal point. There Is nothing high level about that. Management in a
vacuum with, managers surrounded by yes men awaiting their tum to be rewarded with VP Utles in exchange
for phantom value creation over the past six month PRC cycle ought to be contained. High Level presentations
should raise a red flag for you Ken that the messenger is not up on the details and likely neither is his or her
staff.

  Par to many personnel tollerate and adopt an 80/20 rule of acceptance. 20% inaccuracy Is huge error and since
we are a team handing off models, data and perspective; 20% errors compound into huge!'tiskl

  We need a robust fast accurate Rate Engine. EES has been opperating with state rates for two years. Rates
are blended (energy and demand) so demand is not valued. This is the wrong signalto send the team. The point
is that if the matter were corrected then lots of latent value in our portfolio deals would become deep In the
money and mark value (shareholder value) would rise!

  I wish there were more time. Task forces for each opperating group, leveraging managers - not VP's and senior
directors - should be given a chance td rebuild Enron with you and for you!

  Thanks for asking!!!! I

  Yours in -kai- "

  I believe that the intent of the PRC Is appropriate for Enron. I understand that there must be a manner to
'evaluate and 'rate' the company's employees. I believe that the 360 Review in the PRC is good way to
'evaluate' employee performance. However, I believe that the PRC process has recently faltered In its ability to

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  ~ I Ii/MIM~~II IIw
  'rate' the company's employees. While I am not privy to the proceedings of the PRC, t do believe that an
employee that is characterized by his peers or supervisor as having "outstanding potential for a leadership role
in Enron" ought not be categorized as a 3 or 4.

This PRC process is the greatest threat to Enron's Intellectual capital. What can be done to mitigate this risk?
This Is a tough balancing act as the high performing employees must be evaluated and rated to promote a
meritocracy. I would like to think that as integrity is restored to the company via the leadership of the office of
the chairman, the Integrity of the PRC process would be restored.

I am confident that the leadership at the top of the organization can accomplish the issue of restoring the
Integrity, respect, and morale of the Enron workplace. We are on our way to achieving the above mentioned
items as a result of Ken Lay returning to the company in a more involved role. The experience, integrity, and
dedication of Ken and those recently promoted to the Office of the Chairman has gone a long way to re-instill
my confidence in the company.

I believe that the employees of the company are good people that may act in a manner that Is not
representative of their character as a result of the Enron environment. With the recent advent of the "get yours
now" mentality, not only are individuals being harmed, but also the good of the company is being harmed. I
believe that some ventures that Enron enters are doomed financially from the on-set as a result of conflicting
deal and employee compensation structures. While this phenomena Is part of an evolving organization that is
attempting to mature with the business, we must evolve more effectively and efficiently. I believe this will come
with a greater emphasis on aligning the internal reward systems while Increasing the levels of communication
and teamwork amongst the various groups with in the company, Again, I believe this must trickle down from
the top to be more widely accepted in the company.

0 There seems to be a lack of leadership at this time. It seems that the way to move up in this company is to run
over fellow employees and butter up to manangement. It seems to be very political at this point. I am very
excited about Ken Lay's recent decision to come back. He Is more genuine and concerned about every
employee and not just himself.
  1) I would like to see Mr. Lay take the management team to task for some disturbing comments which have
arisen in the past, I am sick of the derogatory remarks that are still being made by some of the executives
regarding Azurix. I feel it Is in poor taste and extremely unprofessional. I am also tired of attending a meeting
by upper management where I've left the meeting with the feeling that I'm a pledgee at a Fret brothers
gathering. The arrogance that is projected by some of middle management Is uncalled for, Whatever
happened to manners and dignity? I have never heard such remarks from Mr. Lay. With Mr. Lay behind the
wheel, I feel that Enron can now look forward to climbing the ladder to the number one company. Mr. Lay has
recoginized there are problems within Enron and has taken the necessary steps to correct these ailments. I'
have respect for an executive who "owns up" when management "messes up" rather than trying to sweep
problems under the carpet and pretending they don't exist. Mr. Lay talks to the employees, not at them. Thank
you Mr. Lay. 2) Another area (would like to address is the recent PRC's. I too feel Enron needs to have a
method to gauge the value of each employee. We don't need employees who are In for the ride and not
contributing to the benefit of the..Company. However, my observations of the last PRC have shaken my
confidence in the program. There has to be safe stops against management abusing the system.
  3) t would like to see Enron get away from the "no assets" made. We need to be diversified. We need both
assets and trading elements in our organization. We need to give time to building good customer relations and
not use a "hit and run" attitude. You may not make a quick profit today, but over the long haul you have a
steady profit that gets you through the lean times.
  4) Give the employees the confidence that they can plan on working here for a career. It's hard to focus entirely
on your job If you are cdnstentfy looking over your shoulder for the next hit in the lay offs.
  5)Also, redeployment needs a little work. If you are going to advertise redeployment, at least interview those in
the program before you go outside the company and hire off the street. .
4~ I feel it is very Important for you. Mr. Lay to remain in your current leadership position. Your respect within the
company and outside the company is what we need to move us forward and regain our financial position we
had a year ago.

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The PRC process has degenerated into an often Inaccurate rating system of an individual's worth to Enron.
Supervisors with little or no direct knowledge of an individual are voting on an Indivkluars rating. The process is
both political and demoralizing to those who participate. The fixed percentages are pushing people into slots
that are often undeserved. Evaluating our performance. and receiving feedback are essential, but we must find
a better way. If we don't I think we'll fund it very hard to attract and retain the best talent. To read press reports
that liken our PRC process to the "Survivor"TV series is not very flattering to Enron. Unfortunately, It may not
be too far from the truth.

I am currently In redeployment and have felt like I have been able to get an interesting view of the company
currently, having had discussions at all levels of the the company and most every major group. What 1 will lay
out is the current view of Enron which was assembled over the last month. The conclusion I came to may be
obvious to many, but was a learning experience for me. The discussions were had under the auspices of
looking for a senior origination position for a person with a 17 year background in the gas power business from
the trading and finance side. All I have talked with feel that we are a very different company than we were two
years ago (which was when I started at Azurix). The thought right or wrong is that the orginal core group that
made Enron what it is is today made their money and have left one way or another. The new group is very
bright, but currently doesn't have the strategic capabilities that others had before them and there has been a
large gap left by Jeff leaving. Related to skill sets it is felt that trading Is very much the earnings driver for the
company albeit traditional and strucuctured trades, and no one can equal our market Information. Although for
this reason, in Enron North America originators have had to take a distant back seat to the traders based on the
relative earnings each has made and will make this year which is supported by Kithcen and Lavorato and isn't
surprising based on their trading backgrounds. If you want to do origination the groups to look at are EES and
EGM, and the need for origination still exists although it is hard to compete with the big profits trading is making
on a corporate wide basis. We also preach being entrelintrapreneurial and taking risk, but the We from for
how much risk one can take doing that has shrunk to the length between PRC reviews e.g. 6 months . The
message Is if you don't have a long history with the company, but like building businesses stick to startups you
can make money for within months or you are at risk. In PRC reviews the more senior you get it is all about
dollars brought in and all else has minimal impact It reminds me of my Marine Corps day when the success
of the mission (e.g. MTM value obtained) was all that matter and casualties sufferred along the way were
expected. I don't feel that any of this is necessarily bad, but Lather is the state of where we are today compiled
from one persons perspective. I very much feel that Enron is a great place to work for those who thrive In the
environment we have established, and I expect to be In a new group within the next few weeks. 1 am optimistic
about the companies future and our ability to overcome this down period. In general It appears we have gotten
a little more Darwinistic at least in the front office over the past few years, and therefore if that was the intention
then we should embbrace it and recruit accordingly. If not then change will come by design or by default.
Either way I think we are all happy to have Mr. Lay back. I would be happy to expand further if helpful David
Pruner 713-646-8329.

After seven years at Enron, I am saddened to share that I have been contemplating leaving Enron after the
hellish EES reorganization. Enronians were treated
with little to no respect during the redeployment/reorganization process. While I strongly agree with Dave
Delainey's vision for the future, I believe that
the treatment people have received has been unacceptable and counter to the Vision and Values Enron
proudly displays in the lobby. The morale here is at an all time low and it's become an incredibly depressing
place to work.

My hope is that Ken and the new management team will rescue us from the abyss. Save usi

My thoughts may be slightly am rtionai, but here it goes:

I have been very disappointed in the direction Enron Networks has taken in the past twelve months. I work
within Enron Networks, and have for over two years now.

Today, most of Enron Networks is a disaster. Things seemed to go bad when we moved into the new working
desks. These desks are way too small, and the evironment is too noisy. The bathrooms are dlsgustionly dirty
and crowded, the elevators are hot and crowded, it is a real chore to get meeting space, and it is very difficult

irrrrrluy. Seprember 04. 21101

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Resparrre
to concentrate or Invent in this setting. It was obvious at that time that the upper mamangement felt they could
afford to-lose some people with this decision. Unfortunately, they did not realize that the people they would lose
would be the best skilled. Also, the place has become much less attractive and we are much less competitive in
the hiring market. The HR department is a huge bureaucracy. It is very difficult to get a job and interview at
Enron, even thouh we are desperate for people. As a result, we now have mission critical systems that are
being managed by very inexperienced people.

There is a VP that is abusing the PRC process by ordering her direct subordinates to review certain people in
the department certain ways, regardless of peer reviews and achievements, In what appears to be a political
popularity contest. Others are being appointed at the director level with out the skills or ability to fulfill their
duties. Projects are being forced in particular directions using specific technologies to fulfill political agendas
even though it Is against the wishes, visions, and needs of those responsible for driving the projects. People in
this department are not allowed to choose new opportunities for growth, even though they have served the
department for years.So they eventually leave the company. Meanwhile, management at the director and senior
director levels change projects every 3-5 months, in many cases just weeks before important deliverables are
due.) have seen directors make promises of rewards to subordinates that are never kept. Most projects are
never delivered and those that are consist of poor quality solutions. In the end, our customer, (the traders), are
being poorly served. In short, non of the values that Enron professes are sustained In this department.

  I work In technical support for EBS. The now defunct office of the chair for EBS (Rice/Hannon) was the worst
executive leadership t have experienced in my 13 years as a software system developer. There was NO
leadership - no communication, no direction, no decisions, no email, nothing. Strong. decisive decisions about
the role of the network and its relationship to trading (i.e. world's best network vs a commodity to trade like any
other network) was needed but never materialized and contributed greatly to the financial problems of EBS. In
the last three weeks, I have already received more information from Ken then in the entire tenure of Rice and
Hannon. Keep it up and keep providing direction. -

The most serious issue at my level Is the "prima donna vs peon" attitude of Commercial to Commercial
Support. I understand that traders are busy - we all are. They are also the money makers for the company. I
would assume they are compensated accordingly. It is very difficult to provide support to people who regularly
don't show up at meetings, don't reply to emails/phone messages, and don't review requirements. This seems
to be a common problem throughout the company which tells me that this behavior is at least tacitly acceptable
at the highest levels or it would stop. Cooperation between Commercial and Commercial Support is the key to
success, not competition.

The trading floor layout IS NOT an appropriate layout for software development This layout is conducive to
conversations, spontaneous meetings, and interruptions - in other words - making trades. it IS NOT conducive
to creating systems. Software development requires individual, clear thinking - an efficient software
development floor is one where you can "hear a pin drop". Different jobs require different layouts. I think the
attitude that the trading layout Is fine for everyone Is another symptom of the "prima donna" attitude found In
Commercial.

Finally, currently an employee's bonus Is based on how much perceived value their work provided for the
company in the last year. This makes sense. The employee's rating is also based on this perceived value -
this is unethical and lacks Integrity. If an employee is assigned to a high risk project, does excellent work, but
the project fails to meet its objectives, the employee should not be ranked as "average" or "needs
improvement" because it f this. Obviously, their bonus will be affected - their ranking should still be "excellent".
The current pressures the PRC to "fit the curve" almost guarantees that the employee will be ranked lower
than is ethical.

0 Now that Ken is back, I feel that I might be able to think about the possibility of retiring from this company.
Before - - it was, 'Where am I going to tomorrow?"

  With Ken Lay back, I am confident the stock price will go back up.
  I have heard so many horror stories from employees regarding the PRC process -- I sincerely hope that

Thnridar. September 06, 20111

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  Ken Lay

  RGSporrse
I process will be looked at closely.
PRC. Get rid of it' 11
  Too much change too fast People are not accountable when they only last 3 months on any given job!
Ken: You need to act, and act now!!! I trust you... I really do. Welcome back!
  ~' I think that Enron should quit worrying so much-about being a 'fun' place to work. We are going to spend
I money putting a rock climbing wall in the new building (or some such silly thing) but we cancelled the Employee
picnic this year. To me it seems like the 'fun' things keep being taken away like the Christmas play from a few
years back and the Employee picnic. Enron only wants us to have fun if while we are working. I come to work
to work. I like to leave work for my fun. (With or without my coworkers.) I understand that people need to
I enjoy their work enviroment, but t don't like seeing initiatives that Imply that I should be at work 2417. It seems
as if some values are getting lost...family, home, etc.

I a Politics are incredible, we have been managed by fear. The policy of speaking when you are spoken to only.
We are all afraid of loosing our job if we turn in our manager; he constantly brings up your (Ken Lay's) name
and how good of a friend he is to you and other board members and how he can get anyone fired at any lime.
Gossip and lies are his way of managing, he has talked to each one In his group individually about other team
I members, and how he has saved their 'ass,' and how he doesn't understand what is'f..: wrong with such and
such. I am scared to death about writing this, but I understand this is confidential, and hopefully I will not loose
my job over this. Mr. Lay, 1 have hopes on you. I have only been with the company for a short period of time,
and have friends in other Enron companies and all have told me that we should report him, but all of my co-
workers are afraid of doing so, just like I am; we are afraid that because he is your friend, and is well
acquainted with other executives in the company, reporting him will back fire, and we will be the only loosers.
His name: Edward Hamb
  i With innovation, comes risk, if the company makes a business decision to not pursue a certain direction, every
possible venue should be taken to keep those people in the desimated group employed at Enron. Not force
them out because management made a mistake. It seems like the management stays and the people they
I hired have to leave. How many strikes before Management is OUT.
  ri I am glad Mr. Lay is back. I have been with the company for almost 16 years. Mr. Lay shows a great confidence
with himself and the company. This is very important for others Inside and outside the company to see. When
Mr. Lay speaks, you know he truly believes in Enron.

,~ in terms of compensation, there does not appear to be ANY accountability post-transaction. In other words.
people have been highly compensated for transactions that'blow up' soon thereafter (next 12-18 months). The
people that closed these deals have moved on to the next'big deal' without any accountability for the prior deal.
Compensation should come over time as the transaction progresses, not all at once, The current compensation
structure for commercial people gives them incentive to close the deal at all costs, not to manage the deal after
closing. The incentives given to commercial people for transactions have, at times, exceeded the value of the
deals! I am deeply disturbed at where our company has come over the past 6-12 months. I am a 14 year
employee of the company and have always beleived in our vision and values - the same cannot be said for the
vast majority of the company. When we had as our vision to become the World's First Natural Gas Major.
EVERYONE believed in this. in addition, they could recite each of our values. Again, the same cannot be said
for the vast majority of the people today. A tot of people in this company truly value those executive managers
who demostrate integrity and respect (not just talking about it). Those people who are arrogant, self-serving
and disrespectful should be removed - they are a virus that should be stopped. I am strongly encouraged by Mr.
Lay's ability to turn this around.
  When we have no assets & we claim intellictual capital is what moves us forward, how can we retain good
people would seem to be a good question. With recent stock price deflation what is the incentive to stay here. If
things keep on going South, all of your good people will leave & the company will never get out of the cellar.
Seems to be a poor strategy to run a trading only business if you can loose your human capital so easily. What
is wrong with good assets that make you $$$'s day in & day out. Others can do it, why can't ENE? Was India a
bad business decision that we got into with our eyes open or was management asleep at the switch? I worked
for a competitor of ENE at the time & we got out of India in'92. We had a development in country with very
  i

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  good connections, but Bechtel & Fluor senior mangement told us they had lost Millions of $$$'s there In the
past, (major facilities built that were never paid for), they would be happy to go to India & do work for us, but not
for the Indian's again. Did our Harvard MBA team have the experience to assess this potential problem at the
tme? What happened? I guess 1st mover advantage can hurt us really big time. It seems that ENE has a
military approach to things. Start up a new business, thaw a lot of people at it, re-evaluate the situation every 6
rrtonths. Cut back to 1/3 of the initial staff & hope to build the business. I've seen this happen atAzurix,
Broadband, & EES. I guess when the military goes out to take a hill or win a war you have to do some of this.
But is this is this the way to make a profitable business? I don't think so. The military is a big bureacracy. That
is what the military develops, burecratst That is what happend to EE&CC & El. How could it be expected that
burecrats could make solid profits? Do we really need such a big conceptual engineering & performance
group? Why did 2 people in this group spend 4 to 6 months on a project that never went anywhere In Florida?
Why can't indicative performance information be enough for the analyst so they can determine a go-no go
decision for the project. Too much time & effort is spent trying to revive'dead dogs' around here. Besides the
costs being spent. their is the opportunity cost of missing out on other potential deals. The question shoulds be
asked in every meeting being held: Is the meeting necessry? Are all the people there needed for the meeting?
Are the all adding value? There was a lot of unnecessary travel in El. Do we really have ro travel so much?
Wouldn't a phone call or conference can have sufticied. It never seemed that ENE was conscious of the money
it was spending. El had a lot of young MBA's who had no business seasoning. How could they go out & make
good business decisions & good deals for us? They were not being managed properly. Now 1 note Calpine's
Energy Services has 6 former ENE people who are listed as part of their 14 key executives. Thank ENE for the
3 year associatelanalyst program & getting seasoning so I can move on. Does this really make sense for us?
These young MBA's initially are 'spreadsheet jockeys' here for 3 years. This work can be done just as well by
analysts who do not have MBA's for significantly less. Do we really need to spend-so mucit money to bring In
175 to 200 a year? Does it payout? Is our growth so much that we need this many every year or is our turnover
such that it is needed. The traders bonus structure has to be revised so that it supports our shareholders goals.
When you hear stories of traders who let deals expire so they can do a new deal when the existing deal could
have been extended, but wasn't & ENE lost 4 cents per unit on the new deal, & the customer could have been
required to stay with the old deal, you know the trader Was not properly motivated, In this case the trader was
asked by the customer why didn't you extend the origionat deal, & he said he got no bonus to extend existing
deals, but did get bonuses for doing deals, even if they were poorer then extending a deal, he was going to take
care of himself & forget about ENE. What a shame. Ken, you have a big job ahead of you. But I am sure you
are the man for the job. It was a great company when I joined back in'96. I am sure you will lead it back to Its
former greatness. We were all so glad to see you come back. Get Enron back on track, I am sure you can do Ill
The PRC process is the most damaging action our Management has ever taken. Management presumes the
employees are morons as they continue to maintain the need to force a curve of performance criteria, but rely
on such biatent political agendas to establish rankings. Management needs to quit lying to the employees and
simply say') wont to give my friends the better opportunities'. At least you could respect that-

  0 The PRC is a motivational killer. During the Ail Employee meeting, Mr. Lay said that Enron needs to be a
'Meritocracy' and I agree. Mr. Lay also said that Enron has a deep talent pool. How can we know that if we don't
measure ourselves? The PRC Is a SUBJECTIVE ranking weapon (notice I didn't say tool.) The PRC promotes
networking and In-fighting. Each-employee is ranked against their peers. The worse yorl can make your peer
look, the better for you. The more face time one gets with upper management, the higher the ranking one
achieves. Is this really what we want? Do we Want more people who talk and socialize and 'rub elbows' than
people who have goals and accomplishments that are met and exceeded? During my review process, I was
never told that I did not meet my goals. That would be because I did not have any defined goals. How can a
person be measured without goals? I was told that I was'crucial to the success.' of our department. Yet I was
ranked a 4. Last year I vas ranked a 2. The year before that a 2. How can someone who ranks 1 above the
bottom of the barrel, be'crucial'? Why should I strive and achieve? I did that and look what it got me! My
supervisor was new to my department, didn't know me, and spent most of his time in meetings. How does that
make him qualified to rate me? He didn't even ask for input from my previous supervisor. The 360 feedback is a
good opportunity to have people tell your supervisor how they perceive your attitude and abilities.
UNSOLICITED feedback is a great weapon to destroy your opponents and anyone else who has decided they
don'hllke you. 1 don't know if anyone provided unsolicited feedback on my review, but I have spoken to many

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  other employees who have found out what kind of damage it did to their review. Employees need to measured
against predetermined goals. Defining these goals can be difficult for a supervisor. TOO BAD! If you don't like
to manage, get out of management. A meritocracy is DEFINITELY what Enron needs. We need to put quality
back into our jobs. We need to reward people who have shown commitment, dedication, and who have set
goals by which they can be measured. I have always been so proud to be an Enron employee. I have
personally invested my own money Into stock (that's hurting now) and will hold on to that stock. I have
recommended Enron stock to other people Including family because I believe in the company. I have always
had to work hard, and put in a few more hours than my wife would like, but until recently I have never felt that
my time was wasted. I've always felt that I was making a difference. I hope that THAT Enron comes back.

f There are concerns at all levels of the organization about PEP. The approach seems destined to Identify a
certain percentage of poor performers, no matter how wag they do their jobs. Early in the survey, I was asked
if I would invest my money In this company. I HAVE A SIGNIFICANT FINANCIAL INVESTMENT IN THE
COMPANY. Obviously, I am dissappointed in the recent devaluation of our stock price. Some stock price could
be attributed to normal market fluctuations. I am concerned that other portions of the devaluation may be tied to
misunderstood comments, actions and behaviors by former key management lam very pleased Ken Lay is
back in more of what I understand to be a day to day leadership role.

g Whoever came up with the PRC idea was not thinking of employees growth, morale, ethics, and integrity. How
can it be that you have to compete against your peers? Why can there be 2 people at the same level in all
aspects? YOu are teaching us to be betray and backstab in this matter. Where does this fit in our vision &
values? Integrity? I think not. My other concern Is who will be replacing Skiiling? Not that I ever thought highly of
him. I guest we can rest assure that it will be somebody better, since chances may be scarce that there are two
headbiting-calculating. selfish leaders. Skilling had a Trading mentality and that's all he cared about if I'm
wrong, why have all the leaders of our formerly El company jumped off the ship? I believe Joe Sutton was one
of the best leader Enron ever had and will ever have. If I may say so, he only comes second to Mr. Lay. I am
relieved that Mr. Lay will be taking charge again, at least for a while. He Is the only leader that cares truly about
his employees and the general wellbeing of the company. He has been the one that pulled Enron through In the
late 80's and made it what Enron is now. Skilling, I'm sure, iss the one that came up with the idea of 'trading
environment'; thus, we are now set up as traders. Why? It does not work for everyone. People In the legal, PR,
communications, HR departments cannot possibly operate that way when we get 0 privacy. I think irs just a
away of making us work more. As if we do not work hard enough as it Is. Enron Is a great company to work for,
but it's no longer a much enjoyable one. We have sacrificed the pleasant work environment. Our personal life
has been sacrificed because we have downsized and now we are doing the work of 2 or more people. I've seen
people's marriages and health being jeopardized. I don't think that In order to make this company a success, we
have to come to such extremes. Furthermore, some of our leaders have taken over the International assets
where the former recent leaders have left off and have handled the issues with little tact Thus, I believe the
message has gotten across with a negative Impact; therefore, becoming a factor that has affeeted out stock.

,tiff I work for Broadband, Commercial Support. I recently began graduate school to better myself and make myself
more maketable in Broadband's ever changing environment I was shocked to learn that my tuition would not be
reimbursed by Enron. I was told 'I have a lot of nerve asking for tuition reimbursement right after all the layoffs'.
  I was surprised to learn this was my Dept. phylosophy. I was told to wait a month and see how Q3 shakes out. I
was confused due to the fact I had just heard you (Ken Lay) speak in the all employee meeting and discuss
how your employees are your biggest asset..... Mean while I am continuing with my studies at my own expense.
i am sure you are asking why did't I go to HR. I am afraid of being too vocal which may result in my name
coming up in the next round of layoffs. If tuition reimbursement is being put on hold in Broadband why do I hear
from my peers their supervisor encourage any form of continuing education. I feel my pursuit of an MBA will
benefit myself as well as Enn as I have enjoyed working for Enron and plan grow with the company. I would
appeciate some clarification concerning tuition reimbursement program. Thank you
a People have become a commodity to use and throw away when it not longer suits the powers that be. I
understand that companies need to be flexible with all resources, but everything can be taken to the extreme.
By treating people purely as a commodity, loyalty, enthusiasm, and morale all decline which does not bode well
for the company.

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a1 Thank you Ken Lay for getting the company where it Is today, and thank you for bringing Integrity back to Enron.
I always believed that when you left the CEO position the company might take a nose dive. With you at the
helm. i believe we will see a turn around. The employees are behind you and support you.
 In the past 12-18 months, Skiliing st al have managed to destroy most of what is good about Enron, the things
Ken Lay and many others spent the better part of 15 years building. No doubt that Jeff is a smart guy, but he
just 'didn't get it' when it came to people. Internally, we need more people with experience and common sense
and fewer kindergarten MBA types. Externally, we need to work to change Enron's reputation from an arrogant
'assholes r us' exploiter of the masses to a leading company that truly provides win-win solutions to the energy
needs of the world. Thanks for coming back Ken.

  My biggest concerns are our accounting and financial reporting practices. I believe they are deliberately
misleading to investors, and I am often ashamed to be a part of it. I think it is a disgrace that, while our
management is busy making bold statements about the changes in our reporting practices, I am working on
multiple transactions involving complex financial and tax structures that are designed to deceive the investing
public and nothing more. If our management really cared about long-term value, it would stop these practices
Immediately and clean house. Nothing is more frustrating than listening to outright lies from pore other than
our Chief Executive. I never thought I would say that about Ken Lay.
  PRC is a dreadful mess. How a CEO like Ken Rice can receive over a S1 million bonus for driving a business
into the ground is ridiculous.

  Compensation as a whole has been entirely based not upon merit, but upon stack appreciation. Without a solid
stock price, our merit system is broken.

  Management has grossly forgotten how to reward solid employees.

  We need a true sign that employees at Enron are valued and that management wants good people to stay.
Almost everyone I know at the company has resumes on the street To me, that is very sad. -

The stock price is obviously significantly less than it should be. I'm not a financial expert but I would guess the
value should be at least 70 dollars a share, even with 'business as usual' issues in India. California, and EBS.
Human resources here at Enron are our second most important asset, next to the leadership, vision. Integrity,
and reputation of Ken Lay. We must continue to recruit and keep the 'best and the brightest" and unleash them
in the right direction. It's worth repeating that I'm not a finaclal expert but I have an idea for the financial
experts to consider. What If Enron bought back shares of stock and based the next four years of employee
stock option grants on prices of $39, $42, $45, and $48 respectively.., with the original vesting dates,i.e., 2001,
2002, 2003, and 2004. This suggestion may not be financially feasible and please delete it if it's not, but I think
this would significantly improve employee morale by creating long term incentives. The employees feel strongly
that the stock price will return to the 80s someday soon and their stock options will represent a positive value.
And it could help minimize the disappointment of employees that received stock options with grant prices In the
80s that have a current value less than $40 a share. I think it would demonstrate to the financial community that
Enron believes in its human resources, that success will continue, that the stock prices will go up, and they can
share in the success or risk not being part of it. My perception is that we've been trying to talk the stock price
up because we know it's worth much more. I'm sure it's been as challenging as pushing a wagon uphill with a
rope. Instead of asking everyone to help us paint the fence, it's time to get the white wash out, start painting...
and demonstrate how much fun we're having. As far as EBS goes, my take is it's an Investment (n the
future... don't give up on it so s on. The possibilities really are endless. I think the best strategy is to engage
the first curve while building th*second curve rather than jumping on the second curve right out of the gate.
Invest in a carefully planned global infrastrucure or consider building a strategic partnership that could provide
the solid foundation for future bandwidth trading. Thank you for asking for my Ideas, comments, and
suggestions and for your time.

More emphasis on risk reward ratios rather than just large risk and some reward. Compensation to commercial
groups should be more structured to Include; 1) deferment of payment for deals that are long term, 2)
compensation should reflect the risks taken and capital used 3) Some desks need better organisation and

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structure so they work as a unit rather than a group of individuals

I We need to balance the need/desire to be innovative and agressive with some business planning. For
example, there are many times when an idea/concept is thought of and we start running down the road without
first stepping back and thinking through the real business value in proceeding. In other words, people focus on
what 'can' be done more than they focus on what 'should' be done. This may be due to a lot of credit being
given for-the 'origination' of en idea/concept before it has been shown to produce business value. Enron is a
fantastic company and you can already feel the changelimpact with Ken Lay coming back.
  Too many automated administrative systems have been introduced too soon. Global systems should be
introduced. Europe and Houston work on various different administrtive systems e.g expenses.Sorne of these
systems have created red tape that is hard to overcome. Not everything is black and white and exceptions
should be taken into consideration. This Is not happening. Some people are not witting to go above and beyond
their role to assist others.

Stick with it Kent

Enron needs to align strategy with 'essence of what it is'. Credability to gain analysts and staff. Further
development of a history for'Enron' needs to be undertaken to develop a sense of ethos for the company and
link ethos to strategy so that all actors, rather than just senior management. This may make us better
positioned to find 'waves of market change' that can increase revenue. To become the worlds leading
company, focus needs to be longer term rather than the next deal and managing reputation is key. This should
be integrated into enterprise risk management from a DASh point of view, rather than a PR post deal re-
building exercise.
I think one of the main issues is the working hours, everybody expects to put in additional hours it is part of the
job. However with the constant programme of moves every weekend people's personal and home enviroment
are becoming severely affected and I think this contributes greatly to staff leaving Enron certainly within the IT
enviroment. This also causes problems with moral. It also causes problem with sickness as people are so tired
and worn down. Why do we have to contually move people around in London one month we moved an
individual 6 times within that month. This must cost Enron an extreme amount of money.
Mr. Lay I am extremely disturbed by the lack of direction/leadership that has been given to India. The whole
concept of 'just get the deal signed' (DPC) without sufficient due diligence for the capital outlay Is appalling.
India has been around thousands of years and therefore Enron should not have been surprised with the
politicallculture difficulties required to be successful in this'developing country'. The very idea of Enron coming
in and thinking that we can be the white knight and help with the development of this country Is absurd. We
built a Town Car in a country that travels its roads with oxen drawn carts. And to add insult, Enron rewarded
those who were responsible for this mess (deal makers) with tens of millions of dollars of options. The key
personnel responsible are now departed (richly I might add) and the stock holders and employees are left
holding the bag. Somebody was not watching the navigation of this ship, unfortunately you were at the
helm. It's not to say we can't be successful In India. EOGIL is a prime example. We (yes I work for OGIL)
have been very profitable to Enron, our partners, and the Indian government. Our efforts are not flawless and I
assure you this has not been easy road, but throughout the developing process we first assured ourselves that
what we have will work and we took every necessary step required to keep our partners in focus. DPC on the
other hand is a total disaster in this regard. 'The perception of Enron India to the local public has' one from
Hero to Zero. So what do we need to do to improve? We need to clean up the mess in India. be more
proactive In settling the dispute with California (stop sitting on the sidelines waiting to see what's coming at
us), and give this company some direction with the new'light assets' philosophy so we can re-build a strong
Image to the public. Right now nron looks Hke a fish out of water. Welcome back and sincerely 'Best of
Luck'.

1) Arrogance of commercial / trading. This is not a blanket statement - most are professional and respectful.
Problem is that key, usually leadership, personnel with exceptionally bad respect and leadership skills are
tollerated (taken as part of the personality of success, $). 2) Focus on individual or project success is a little
too heavily weighted. Some corporate 'good' and efficiencies are being lost. Balance is In the right ballpark, but
-we are pushing the line a bit. 3) Lays communications on turning the company around need to be toned down

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  a bit and focus more on growth and Improvement. e.g., At employee meeting he said we had slipped and
needed to regain mastery of corporate code of conduct. In his phone message about this survey he wanted to
re-establish trust. Those comments dearly sound like scape-goating and are disrespectful to Skat(ng. Enron
says there was not pressure to leave and he did a great job... these messages say It went In the toilet doing his
tenure. The message should be we can improve internally... we need to build Wall Street confidence iii the
future. 4) In general-good job. Some context to answers: a) While I think we need to focus on stock price,
that will be taken care of as an after effect of improving core attributes. b) My low rating on loyalty to Enron
(intent to stay) Is directly related to how I see Enron views its relationship with employees... it's mearly a
business deal until conditions change or there's a better offer. I'll stay as long as Its in my interest and the work
environment is good... there's no Intention to use-and-leave. However, I'm not sure I would stay to my
disadvantage to help Enron through tough times (as I would have with my old employer). Its a two-way
  street. c) There has been a lot of focus on employee moral and bad press on the PRC process... I haven't
seen anything worrisome on my end. The PRC process is good... just needs better positioning and a clearer
message. Internal bitching about management is significantly less here than at other employers I've been
associated with.

  My biggest concern is the poor grounding we are providing to the talented, promising, and impressionable
young people working at Enron. They are being conditioned to think and behave such that the only way to get
ahead is to politically badmouth others, lay blame on others, or to even take credit for the work of others. It is
getting so bad that workers in the rank-and-file joke about how Enron Is just like communist China... utilizing
the PRC process to weed out the dissidents. People are afraid to speak out because senior mgmt knows that
this goes on, but looks the other way. How different is this from the injustices during WWII when people
suspected injustices going on with the holocaust, but chose not to take action? Given the tremendously
talented young people we have at Enron, we have an obligation to these people and to the greater business
population to groom these people with the proper business and moral ethics to become the leaders that they
are capable of being. With the Enron lustre having dimmed In 2001, many people who came to Enron as
mercenaries will choose to go elsewhere because the.void of real ethical management and leadership make
the risk-reward ratio no longer worth staying at Enron. It is very disappointing to see this happening. I hope
that Mr. Lay can right this ship before we lose too many of the right kind of people.

  We as a company are at a crossroads where we have seen great successes juxtaposed with disappointing
setbacks. The stock price has had an adverse effect on employee morale, and the drastic changes in the
company organizational structure have left most confused and in a general state of malaise. We need to
continue and expand upon our current efforts to bring our varied business units back under a single corporate
umbrella. This move toward unification will allow us to operate more efficiently and inexpensively as we
consolidate similar groups and functions and should help with our next step of recreating Enron's sense of .
purpose. Each group must then be given specific targets; each set up in a way to convey how these goals
benefit the particular business unit and then Enron as a whole. As our employees gain greater understanding
of how their productivity translates into success for Enron, our current stock value then becomes an implied
challenge. Once each employee's function and potential company value becomes defined, then any
dissatisfaction with the stock price simply becomes a question of Increasing productivity at the individual level.
As this commitment grows, Enron can then redouble these efforts by reinforcing and reciprocating the same
dedication to Its employees. To show how we might progress from our current state through the stages
described above, here are some examples of internal marketing that could be used to foster the desired
feelings: Step 1: Unification. In the most realistic sense, as we reach what we hope is the turning point in
our recent downward turn, now is time for consolidation and streamlining which sadly often takes the form of
redeployment and reduction of assets. During this time we must show that It really the goal-is an integration of
assets working toward common goal, separate entities becoming cogs in a great machine. This initial
marketing strategy shod emphasize the Dr. Lay's and company's role in getting our groups on the same page,
making intelligent and profitable moves towards a common goal. Step 2: Definition of functions and goals
from the individual level to the corporate level. Once we can foster a spirit of camaraderie, it is now time to
ask back of the workforce. The company has banded together, and now it is time to identify the specific targets
and goals that will deliver us into greatness. Planning of this type has to come from the top down. Corporate
has to establish a high, yet realistic goal for the end of the next reporting period. From that, each specific
business unit beneath the corporate umbrella has to Identify both a goal of its own that help in achieving those

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  ends, as well as seeing how its performance can positively Impact those other business units around them.
This can them be taken down the line until each group has certain objectives from which they can create
metrics and maximize performance. This will allow each employee to see where their individual efforts benefit
their department, business unit and Corp as a whole. The marketing campaign shifts its focus to the
employees: What can I do to make the stock go higher? This takes the stock from being a independent
component of company worth to a value based on the level of all of our applied efforts. Step 3: Commitment
to each other. As goals become realized and the bar is raised, the last step is tie the company and individual
fortunes alongside one another. Employees at this point see that they are the masters of Enron's worth, but
these efforts only reach their highest potential when they feel that as Enron prospers, the company brings that
prosperity back to its workforce. The marketing now focuses on both elements working to further the interests
of one another: 'You work to make Enron's vision a reality; Enron works to make your dreams come true.' I
am willing to make this commitment to our organization. I know that my hard work makes a positive difference
in the destiny of our company, and I feel that my company will recognize my efforts and make the same impact
on my destiny. I know that as I can Instill this mindset on my colleagues, our potential will grow exponentially.
Enron's growth has always been a result of the astute management of commodities and resources. The most
valuable resources that Enron has at Its disposal are talent. Intelligence and dedication. At this momen4 we
have the tools to succeed. If we can Instill this mindset and renew confidence in ourselves and our company,
there is no limit to what we can achieve.

r keep ken in the drivers seat
+ Ken Lay is going In the right direction. This company pretends to be horizontal but instead is pretty vertical and
information does not flow. The management and the employees need to build better ways to communicate with
each other. It's urgent to work on the morale, I'm personalty very dissatisfied of the management. I have not
seen clear direction, we need leaders at all leveis..managers, driectors VPs. The PRC effect was
  devastating, it's urgent to work on better ways to evaluate individuals based on clear goals and criteria.
Currrent system Is surrounded with secrecy and lack of transparency. My point is, recover the trust of the
shareholders but don't forget the employees.
 t am glad to see Ken Lay back in charge. He is respeptful of people at all levels and has the success of the
employees and company as a top priority. Instills my confidence back in Enron.
0 1 believe the biggest problem we have at Enron -- and one of the top reasons why morale is so low -- is the lack
of values in our management. I think Ken Lay lives the values, but I don't see the same commitment in other
management members. For example, some of the worst abusers of our values are on the Culture Committee --
like Beth Tilney and Dennis Vegas. How can we trust management when the very people that are positioned to
live our values are the worst offenders? I have to also say that Greg Whalley scares me for the company. While
I'll give It to him that he's brilliant, I can understand why the stock went down after that announcement. I am,
however, thrilled to have Ken back at the helm again.

  Ken,
We need to show the world that we are still the BIG EI
  Enron has a huge problem with skewed financial incentives at the upper reaches of management I think that
compensation in the form of options help align management interests with shareholders', but at some point I
think it encourages excess risk aversion. I believe this has been a big part of the management failures over the
last two years. In one case, we agreed to pay an executive over $40mm in options to run an unproven
business far a number of years. This executive literally sat on his hands the entire time, hoping against hope to
get out intact. He did not and has recently left the company; I'm keeping my eyes on the SEC filings to see if he
got his options "repric d" in the form of a package.

  I'm not advocating rep riicing our options - the stock has tanked, and we need to take our lumps with our
shareholders. But there comes a point when an executive is so rich that he no longer cares about growing the
business; he wants to preserve the value of his portfolio. We should join private partnerships in recognizing this
change from risk seekers to risk averters and force people who reach some substantial economic scale in the
form of our stock to leave the company.

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~i~Pl I~~~Iq~ll  I~~q 11~~/I~~r1111 The thing that confuses me is you, Mr. Lay. Of all employees, you seem to be the "longest" in terms of Enron
  exposure. but I don't notice the same kinds of risk avoidance, or sitting back on their laurels, that I did with the
other executives. I f a policy described above resulted in your leaving the company. It would be extremely
negative for us. However, I believe that what happened with Mr. Skirting is a symptom - he finally felt he "had
enoughl' and no longer put the interests of shareholders first

  It's important to compensate middle tiers of management well to keep them at the company. But one
substantial issue with morale deals with the wealth of these executives and the fact that they prevent youger
managers from moving up. By enforcing this "senior partners" system, l think you'd solve more problems than
you'd expect.
4 I think Enron is very flexible and that is worth so much when balancing work vs.personal life. I have heard of
several companies going to a 4 day work week every other week, always having coverage on Friday but
alternating with a fellow employee and working the same hours just in 4 days Instead of 5. 1 feel this would give
employees time to make needed appointments during the operation of buisness hours. Reducing time taken
off for personal reasons, such as doctor or dentist appt., personal buslness,ect.
0 1. Accountability/Executive Compensation - Even though I am a VP, t feel that executive compensation has
gotten way out of control, We seem to have been paying executives astronomical amounts of money with very
mediocre, if not poor, results. Lou Pai may have deserved lots of money during the glory ECT years, but
apparently he totally mismanaged EES during the last several years. And what about all the money paid to
Rebecca Mark, and the ridiculous results she gave us. We, the employees and shareholders deserve better
accountability that this. The same goes for several other execs. who were wonder-boys for several years, but
then got "fat and slow" and lost their edge. Every executive should be paid for results, not just for closing
deals. If they won't stick around, then just let them go. We need "professionally hungry" people who will work
their tails off for the bottom line.
  2. The PRC needs major reworking! I support all the concepts of the PRC as a way to weed out people who
are not the best. But the comparison of people across business lines does not work. I work for a small group
in corporate staff, and I am compared to commercial VPs. So,e van though I get rave reviews from the people
I work with and for, I continually get blanked on some parts of Incentive compensation because my group and
my work is not perceived as being as essential to the company. That conflicts with what Ken Lay said about
every person counting here. It just doesn't translate. Also, having forced percentage Into the lowest category of
PRC Is inhuman. it has greatly demoralized our work force, and (just don't believe that there are that many
losers still here. There has to be a better way. I say that you should get rid of PRC as we know it and come up
with a newly named and better system for evaluating people. PRC has done great damage to this companyttl
3. Please focus an what we do best and stop spending money on goofy ideas, all In the name of innovation and
other buzz words. Tried and true business models and people with a little gray hair still have a place around
here. As a matter of fact, I wish we had had a little more gray hair on the 50th floor In rodent months! Don't let
the Madison Avenue consultants give you this new age hog-wash about everything that is different being
  better. The Management Conference agenda last year, especially the outside speakers, made me feel like an
old lady, and I'm not!! Let's get REAL and do what we do best!

0 Ken, will you stay as President & CEO? Things were better when you were there.

 Top three (3) worst things about working at Enron
  1) Lack of experience of VPs and above (some are too young and only know trading - nothing else). People
cycle through the ENA Office of the Chairman so quickly that I doubt anyone has had the time to really
understand the job and pdd value to the company. Executives move up the learning curve and then leave.
2) "Boon-Boggles" are sfrnetimes quite excessive, especially for groups that are not adding to earnings
(example: article came out blasting Enron for Project Timber and accusing Enron of manipulating earnings,
while the deal team was spending a long weekend in Sonoma on the company dimet)
  3)No communication between the trading side and everyone else (asset origination groups, finance groups,
etc..)
 I believe our stock price has taken a beating because I do not feel that we have effectively countered the
publicity over California and the Dabhot project. For the company to be as healthy as it is, there is simply no

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 r r.+r~.rr-..rrrrrr.r_rr
  reason for our stock to have fallen over 50% in one year. We must launch a tactful PR campaign to counter
this.

  Ken I work in HR at a Business Unit and think we have come a long way since Cindy Olson was put in charge.
She really challenges the status quo. Now that you are back, I think she is toolli Why was the HR
leadership/responsibility split? We need one HR leader to provide a central focus. Like you Keniil

Now there are some things that do need fixing in HR. I hate it when HR get's called out at an all employee
meeting. It is embarassing because I, and others, work very hard to do the best job possible. I realize we need
to take care of management, but we also need to take care and focus on employees. We need to get back to
the basics!!!

I think we need to reevaluate the HR Senior leadership to ensure we have the right people in place. It is SO
political. You do well if you are in good graces with certain people. And of course you can fall In and out of
good graces! What happened to doing well It you do your job and do It well... I will not name names but think
about it. Who manages by Intimidation? We have really good people but can you honestly say there are no
Americans who can lead key functions like Head of HR, Recruiting and OD&T? Believe me I have nothing
against non-Americans. This has got to be costing us a ton of unecessary money to have expels in these key
roles.

I am a Director and at this last PRC period, the HR Leadership evaluated the Directors and Sr. Directors
together. Why? I assume this was not done in any other function at Enron. IT IS NOT FAIR. There was no
communication as to the logic of doing this. What has been communicated to employees, Is that you will be
evaluated with your PEERS. A Sr. Director is NOT my PEER. Let's look at it from the Sr. Director's view. Are
they now really considered Directors? Have they been demoted and not been told? I thought
COMMUNICATION was one of our core values. Kent have no idea where t stand relative to my Peers and it
looks like my Peer is a group of people who have greater responsibility than myself. I may have done ok, but
how would I know? I'm thinking 1 don't have a chance. This has created unnecessary paranoia, not only with
me but with others. We all recognize PRC drives compensation and promotions. The HR Leadership does
not have the balls to even communicate PRC ratings. Ken, let me repeat, THIS IS NOT FAIR. At least
communicate the PRC ratings. How do I know what to do to do a better job, or am I doing ok? Who knows?
Am I eligible to be promoted to Sr. Director?

Enough complaining. My recommendation would be 1) Put Cindy Olson back in charge, reporting directly to
you. We need one leader, reporting to the Office of the Chair. HR has been shifted around too much and this
role is too critical. Sign her up for at least the amount of time you have committed. 2)Evaluate the HR
Leadership: Manager through VP and put the right people In place. Make the hard callsllt For those who
deserve it, promote the right people to Director, Sr. Director and VP (these people have worked very hard and
they do existl!l) 3)Communicate PRC ratings, especially if people want to know. 4) Have HR focus on
employees mare. 5)Tatk to the HR management and understand what is really happening in this group. They
will tell you if you ask. But you have to be willing to do something about it. HR will be critical in bringing us back.
like you Ken...

  Thanks for the opportunity to tell you how I feel without any threat of being discovered. I hope we can get to the
point where we can speak to you, or Cindy face-to-face in addition to this type of survey. This Is a cool tool.
especially the speed of geting it out to employees. I hope you communicate results just as quickly.
  Mr. Lay
Welcome back and thank you for asking us to respond. There are some Issues, I feel, that are impacting our
performance and public image and I hope I can convey my thoughts and feelings without offending anyone.

I am disturbed by the lack of directionleadership that has been given to India. The whole concept of "just got
the deal signed" (DPC) without sufficient due diligence for the capital outlay is appalling. India has been around
thousands of years and therefore Enron should not have been surprised of the potiticallculture difficulties

Thur 41eiI, Septe+nGcr PA. 1Anr

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  required to be successful in this "developing country".
  And yet throughout the whole DPC ordeal, Enron was jerked around because of our lack of understanding of 1.
The PSA (we can power up from a cold start in 4 hours? the person that signed this should have been
decapitated) and 2. The lack of commentment from a frail and weak government that changes with the
monsoon. And yet we come in and build a first class Town Car in a country that travels its roads with oxen
drawn carts. And to add insult, Enron rewarded those who were responsible for this mess (deal makers) with
millions of dollars of options. And now, the key personnel responsible are departed (richly I might add) and the
stock holders and employees are left holding the bag. Somebody was not watching the navigation of this ship,
unfortunately you were at the helm.

It's not to say we can't be successful in India. EOGIL is a prime example. We have been very profitable to
Enron, our partners,
and the Indian government. Our efforts are not flawless and I assure you this has not been easy road, but
throughout the developing process we first assured ourselves that what we have will work and we took every
necessary step required to keep our partners In focus. DPC on the other hand is a total disaster in this regard.
The perception of Enron India to the local public has gone from Hero to zero.

So what do we need to do to improve? We need to clean up the mess in India, be more proactive in settling the
dispute with California
(stop sitting on the sidelines waiting to see what's coming at us), and give this company some direction with the
new "light assets" philosophy so we can re-build a strong image to the public. Right now Enron looks like a fish
out of water. Welcome back and sincerely "Best of Luck".

  M.A.Garred
EOGIL
4l There are too many employees who view themselves as self created managers, and are very adept at creating
situations which accomplish one goal.. self preservation. Almost without exception, each one of these
"managers" envisions their sole purpose to micro-manage and then delegate their management directives to
their subordinates. The only problem is these subordinates use the same mentality as their
  superiors, they micro-manage the directives from above, rubberstamp
  the decisions they make and delegate the next step to others and the cycle continues.... where does the buck
stop? Nobody it seems has the guts to take ownership of the issues and see them through to resolution.
Admitted ownership means responsibility, and with that accountability. Total deniability seems to be the norm
here. If something is a success, everyone wants credit. If there are problems or even failure usually the only
people willing to take the blame are the ones that were doing all the work that was delegated to them by the
managers that can claim total deniability. What is wrong with this picture? Too many Chief's and not enough
indians Chars what.

  PRC is a farce.-Clearly a method of measuring performance Is required,
however when the current system Is wrongly used as a tool to determine
  which employees should be terminated due to an impending layoff, and the employees deemed as 5's were
clearly higher performers than some of the employees rated 4's and above something is wrong with the system.
This happened within EES to co-workers of mine and I was never more ashamed to be associated with a
company that condones such
  actions than I was the day these terminations took piece. This must be corrected or It will be as fetal to this
company as cancer is to a y living creature.

  I am looking to you Mr. Lalto return this company back to what it was
  just a few years back; a respected, admired and successful company whose employees are proud to work for,
not just be employed by.
i The fact that high level executives in high paying positions (i.e., Beth Tilney) perform jobs that could be done by
a manager and the fact that such executives have such jobs because they are friends of Ken Lay. Furthermore,
the pay and benefits are not commensurate with the amount of work executed. Then, too, for a company of a

Thr.rvduv. Sipfrn rnr IM. 2(wl

rng4 6r a faa

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  Y rr~wrr~la,rr..~~~. Irrli.Yr~~Wr.rrr /
  Enron's stature, the pay and benefits are very poor. ,
  Change is great .... but there Is a difference between change and caos. When PRC time comes, how will we be
able to be judged fairly when we have changed roles so many times due to re-orgs. This affects are packet
book and feeling of self worth and contribution.

  Quit having so many chiefs with ideas (each talking and interpreting the message slightly different).... and let the
"do-ers" get to doing something! And don't change that every 15 minutes.

  Continue to invest time/money into having one world class system in which our customers up to date contract
and billing information can be housed!! Amen.....can't wait for that!!!

  Divide the work more appropriately. I think there are people doing nothing and people running around crazy.
Let's have a happy medium.

  The all employee meeting was AWESOME!! Gave me the goose bumps!! Thanks Kenli
Looking forward to a fun, top notch Christmas party again this yearlt Can't wait!!
 Communication has taken a nose-dive. Decisions are being made at the tap (where they should be), but put
into action prior to anyone taking the time to look at the Impact or how the and result will be achieved. Morale Is
at an all time low in the field.
 I've been at Enron for five years, and I am extremely concerned about the number of high-quality people I have
seen leaving the company in the past year. Every one of these people was an asset to Enron, and now they are
almost without exception all working for our competitors. I attribute many of these departures to political
  vendettas that have been allowed to take place within the framework of the PRC. If Enron is to continue
attracting and, perhaps more importantly, retaining the best and brightest, It should seriously consider a total
overhaul of the PRC process. A key first step should be the cessation of forced ranking; if we pride ourselves
on the quality of our employees, then how do we reconcile that belief with being forced to designate a certain
percentage of employees as 4s and 5s every six months? I say this not as someone who is disgruntled, but as
someone who has enjoyed high rankings during every performance review I've had during my tenure at Enron.

  I also feel that Enron has strayed somewhat from its vision and values, particularly when it comes to respect
and communication, and am hopeful that with the return of Mr. Lay to the daily leadership of the company, this
is an issue that wilt be addressed In a decisive manner.
  I previously worked In the Associate and Analyst recruiting department and decided to transfer to a commercial
role. When I told my supervisor that I would like to make an internally transfer she treated me like a terminated
employee. I was not allowed to check my phone messages because they changed my Id code and made me
pack my own belong' ngslfiles, etc to take home for the weekend. I do not feel this encompasses the Vision and
Values of the company especially RESPECT! Now I see why there are so many disgruntled AA members. I
see that the management in that department carries that attitude over to them as well.
  Also, being a recruiter in that department I feel Enron is over hiring. In the past Enron had a reputation of only
hiring the cream of the crop. Last semester we went to campus and made as many offers as possible without
really screening candidates. Because of this attitude we have become a joke an many campuses and a fail
back to students who do not get offers from the company they really want to work with.

  t have been here slightly over three years. In those three years Enron has changed considerably and not all for
the better. While we p 'de ourselves on the ability to change, which is generally perceived as being good, we
must change for a reason. Currently we seem to be making changes for the sake of making changes. We
appear to change and re-organize around objectives. I feel that no work (or very little) has been completed over
the last six month because most of the effort has been spent by management jodrying for positions. There are
way too many egos at the upper management level. This, combined with the relative young age of upper
management, is having an effect on morate.and the Enron culture.

  1
i
Thnrsrli y, September 46, 200!

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  The culture at Enron has changed significantly, even just over the last year. We currently do not have a real
champion for Enron. When Joe Sutton was here, like him or hate him, in public he was great at convincing
others that Enron was the best. He always conveyed this message to new hires and during guest appearances
at offsites for existing employees. You used to walk with a spring in your step knowing that you worked for
Enron. You worked hard but you were treated you right A lot of that luster has dulled recently.. I feel that the
morale is very low, and while job security is a thing of the past with most companies, it seems even more so
here. It is very difficult to plan your personal life when you never know from day to day It you will still have a job
tomorrow, even though you are a hard worker and have the performance reviews to prove It.

This brings me to my last Item - the PRC. As it Is used at Enron, I feel It is very counter productive. When I first
hired on, I thought that the process was great - selecting peers to review your performance - this was better
than most other companies that I had worked for. However, the forced ranking system currently being
employed is difficult to accept. If t am going to be given a performance review, it should be just that - a review
of my performance and not some rating given to me by someone who does not know me or the type of worker I
am. Instead of being an Incentive it is actually demoralizing.

Even with all this said, Enron is still a great company and can return to it's glory days. I just feet we have taken
one step forward and two steps back recently. Management should realize that not all of us can be traders. We
need to stop treating people like commodities, focus on a direction, give it a chance, stop selling goods that we
don't really have, and work as a team. There seems to be too many silos and politics involved which prevent us
from successfully getting around to the business of doing business.

 Glad Mr. Lay Is back at the helm. He Is the role model of our visions and values.

Employees may not take advantage of new opportunities close to a mid-year or year end PRC because they
may suffer in their rankings with the new group. This keeps Enron from maximizing their talent.

,i 1. Employee morale Is a major issue now. Factors such as the PRO process, the sinking stock price, and
layoffs I redeployment have had a significant impact on employee morale. I think this needs to be addressed
before we have an even larger loss of talent Many talented people have left or are considering leaving Enron.
2. The PRC system Is broken. I find myself unable to explain rankings to those I supervise. I often disagree with
the rankings and don't know how they were determined. I don't have a voice in the final ranking determination.
The rankings don't even necessarily reflect the written Input from the people chosen to review employees. In
addition, this system is stifling cooperation. It is a zero sum game that encourages people,to withhold
information to gain "PRC points". It also encourages withholding feedback in order to have "ammunition" to use
at PRC meetings.
  3. Working space and meeting space is becoming an issue. it is often difficult to find a place to meet and to
share Ideas. Elevators are amazingly crowded. Hopefully this will be helped by the new building.

  PRC this year was a disaster. The relative ranking system might be useful for the company
because it forces employees to work harder and harder to get a better score than the neighbor,
  but it does no good to the employee. The system has been abused: a manager would give a departing
employee a poor ranking in order to allow another employee to receive a good ranking.

I'm glad to see Mr. Lay back at the helm. Please never leave the CEO post again.

It's very discouraging to see so many top executives leave the company. All of EES last year's
top management Is gone.

  Ken, it comes clown to this, I am not empowered as an employee. I have an MBA from UH-CL, which is not
enough to get me hired to a position where I can really do something to help this company - I have a great
passion for finance but training and other opportunities in the company are limited for me. I have a couple of
ideas that I think could make this company's stock go back through the roof but without a fancy tide, I can't pull
it together. I'm going back and get a second Masters (in Finance), this time from a top business school like

77irerwhq, .Stpft' nhe'r 116. 2001

. . . Lira? 63 uf.7.1
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  London Business School or Haas at Berkeley. and then I'm going to work for Goldman Sachs, where I can get
the training I want. I'd love to stay here but If I do I would never get a chance to do anything great. Best of luck.
My biggest complaint about Enron has been the application of "the curves", as it pertains to the PRC.

I can see where having goals of having so many 1's, so many 2's and so on makes sense for a work area that
1) has a large number of staff and 2) sees a lot of turnover. The odds say that there will be a bad apple or so In
every box. And the PRC approach forces a supervisor with those bad apples to deal with the situation quickly.
However, for the department 1 oversee where the opportunities to fill a vacancy are rare (10 direct reports /low
turnover). I make sure that I hire the right person for the job at such time. I have a pretty darn good track record
over the past 20 years - one of my direct reports was a Chairman's Award winner. But when something did not
work out as planned prior to the PRC, I rapidly dealt with the situation, knowing that you can't get too far in this
day and age with a bad wheel.

Being asked to label someone a poor performer In the PRC process just to fit a curve does not make any sense
in my situation. In fact, assuming that there will always be pressure on me to have a poor performer, my
Innovative mind says that I need to fill my next vacancy with someone that I purposely know won't work out as a
way to shield an existing staff member from an artificatty tow ranking. Is that Visions and Values in action; to
purposely hiring a token sacrificial lamb? I don't think so.

  i also know of one case where the PRC ranking process Is currently being used to literally "blackmaf" an
employee. In this case, the employee (J. Doe) is a functional mangager currently assigned to provide system
support for Company A. Others within Enron would like to have access to J. Doe's talents and have attempted
many times to attract this person to their area. However, J. Doe is extremely happy with is role supporting
Company A and Company A is very pleased with J. Doe's work.

  With no success in winning J. Doe over to their side using the more traditional means (promotion, salary
increase, increased responsibility,...), those who would like to have J. Doe under their wing hove given this
persona four ranking in the most recent PRC to "motivate" J. Doe to reconsider, This is not what the PRC Is
designed to do. The PRC Is designed to Identify performance problems, not as a means to influence someone
to do something that Is against their will. What if this employee decides to leave Enron? So much for finding
ways to retain intellectual capital that has made this company so great.

  This "blackmail" example points out another shortfall of the curves approach - everyone has to fight to get that
good ranking. What ever happened to doing things as a team? Forget teamwork, hell it Is every person for
themselves (especially now where most stock options are underwater)-

  If I run over someone to be the first M line, tough, they should have seen me coming. This type of attitude may
work when we are competing outside of the walls of Enron. But is this truly the environment that we want
inside? >
While my tenure with Enron has been relatively short, I came to this company with extensive experience in
leading and managing the personnel and assets of large organizations. Consequently, although I would be the
first to admit that my comments should be appreciated in that light, t can say unabashedly that thirty years in the
military, commanding units with as much as 3500 personnel at one time, does offer me a unique and somewhat
informed perspective an what I think is Enron's trenchant weakness -- the quality of management practiced by
its leaders. We can debate the virtues of the pros and cons of this Issue ad nauseum. Nevertheless, if, as I
suspect, you hear a consistank theme of employee morale being at issue, or concern about where the company
is headed, or questions aboutlmanagement communications, then these need to be taken as red flags warning
us that there is a problem at tl~e core of this organization's leadership. And, if anything reinforces this, I would
call attention to the almost two minute standing ovation that Mr. Lay received at the last All-Employees
  meeting. That wasn't contrived nor was it uncalled for. It came as a result of what I would offer is a crisis of
confidence in the leadership and management of the company - - something that is not solely the fault of Mr.
Skilling (although as the senior executive of this company the buck certainty stopped with him). And, if left
unchecked, this crisis will fester and its deleterious effects will have both internal as wells as external

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  consequences beyond the bounds of the market value of our stock. This confidence has to be restored quickly
and, interestingly enough, some of the remedies are not all that copmplex - - candidly, this survey is a step In
the right direction - - as long as it is used and not perceived as a bandaid to display the "obligatory" show of
concern. It continues with the selection of right-minded executives to take the company forward after Mr. Lay
retires (selections which have already occurred hence somewhat questioning the efficacy of this survey). You
see, there appears to be a fundamental flaw in the selction criteria for the corporations and subsidiary
companies leadership. Success in very narrowly focused venues (trading, sates) would seem to be mistaken
for ability to run large organizations - - hence the selection of people who, while earning vast sums of money for
this company, may not really have the basis or personality to run large organizations and orchestrate the
actions of many employees over a diverse spectrum or requirements. In fact, one could argue that the type of
people who have been successful as traders and/or sales types, are the antithesis of what good
leader/managers are all about. The latter knowing how to mobilize the talents and energies of many people and
use others to maintain the company's momentum while staying focused on a myriad of issues and sustaining ail
of our efforts towarsd the long term vision put In place. It's this type of leader/manager that somehow, of late, Is
not being nurtured and culled from the pack to lead us forward. Rather, we appear bent on selecting those who
have garnered success in a mostly individualistic endeavor where teamwok and motivating others may not be
the recipe for success. If this Is too harsh and a generalization, then understand that it is unfettered by any
emotional baggage (i am happy with my immediate employment circumstance and superiors)and based
exclusively on many many years of leadership under the stressful circumstance of combat and within the
context of many different leadership environments above me. Furhtermore, I came to Enron because it
exhuded the qualities and virues I didn't think I could possibly find anywhere than in the military. Until this last
January it continued to be that way. However, the change since then is almost palpable and it will need to
dramatic and forceful leadership to change It if that Is the company's Intent. Frankly, l really believe your
sounding of the situation doesn't go far enough. Would ferevntiy recommend you take a sensing of what key
customers (especially retail customers) think as well as middle management. I do not wish to be rude or
disrespectful, however, if this process doesn't drill down into the deep-seeded Issues barely scratched on the
surface by this survey, and, if left to the sole interpretation of the current executive leadership, It will never have
the complete airing it needs. In closing would just add that something that clearly is absent in the whole
equation Is a leader/manager development program. Some say that leadership can't be trained. Others insist
that there are skills that can be taught. I believe it's a little of both. But I can tell you that It is neither
serendipitous nor purely mechanical. But it is something that is thought out and it is a nurturing process that
requires employees being groomed and developed early on in their employment at Enron.

  EMPLOYEE MORALEIWORK ENVIRONMENT
  I don't need an office with a great view of downtown Houston to feel wanted, but I do need a working
environment that wifi help me produce in a way that is expected of me. I work in ETS engineering and we are
being forced to work as a "paperless" society. Moreover, our workstations are being drastically reduced in
area while the same level of production, efficiency and accuracy is being expected from us. The upper
management people who are making these decisions (sounds like people with IT or Trader backgrounds)
obviously have no idea how engineers must function to do their job. The effective message is that the price of
real estate Is more valuable to Enron than our product or the morale of our people. They ask, "Why retain
books, binders and drawings with data when you can call it up on the net?" This logic must be fostered by lack
of understanding.

HUMAN RESOURCES
If Enron wants to save considerable resources, try deleting about 90% of HR. These people passive, not
proactive. They rarely ar of much help in almost every situation I or others have experienced. They offer no
help whatsoever when someone calls about employment (they say go to our web page I)or when an employee
is redeployed. Regardless what IiR people or Mr. Lay may say, redeployed employees are on their own. That
does little to boost employee morale

  Dear Mr. Lay,
  Today is my last day of working for Enron. I am going to back school next month. I was a summer intern in
Enron in 1998. 1 decided to come back to work for Enron because I really enjoyed my working relationship with
my boss and co-workers 4iuring the summer. I felt respected for not only my skills but also my Ideas.

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 But things have been changed since I came back from school in 1999. I was promised by the HR department to
get a sponsorship of Green Card. But that promise was denied since I became a permanent Enron employee in
I1999. Celeste Roberts told I have to wait for three years in Enron in order to get a sponsorship. I felt Enron
cheated me. But I still stayed with Enron because I believed Enron stiq had something I appreciated.

  Things were getting worse. My current supervisor never shows me any respect. I never felt I was respected but
I like a tool for working. I am a CPA graduated from UT-Austin. I developed very solid finance and accounting
skills but I felt my potential and skills are not recognized. My supervisor thinks the person who can make her
happy is the good employee. I don't like politics and that is the reason she does not have a favorite opinion on
I me. But eventuetiy I still had to be judged and represent by her in the stupid PRC system. I did not get a fair
PRC review since I started working for her. My morale sank to the lowest point in my life. That is the real reason
why I decided to leave Enron. I could have found another rotation and leave the group but all the unpleasant
experiences make me feel upset and disappointed. Comparing to Enron of 3 years ago when I was a summer
intern. I found Enron has changed a lot Respect has only become some slogan instead of the really spirit. If all
the employees keep leaving Enron, how can Enron maintain Its expertise and stability? Like the A&A program's
PRC system, all the analysts and Associates have to fight to death in order to excel each other. Why we have
to go through such a brutal war to success. Where is the respect? I felt I am a gladiator who has to kill his peers
to survive.

  I have great respect for your leadership. I hope you are going to save Enron one more time. I don't know
I whether my voice can reach you or not but I do hope Enron keeps moving forward. I want to see the company
really become a world leading company,
  0 We must do something to restore much of our stock valuel t I realize that $90. may have inflated, but $35. will
I lead us to being absorbed into another Company, which probably won't be beneficial to the employees as a
whole.

  It may not be the most palatable game in town, but Enron Mgmt. is going to have to start treating the investment
analysts a little better, so we can negate some of our negative publicity. it's too bad that this Is necessary, rather
than just being able to "make money" and call it good, but it seems like those who don't bow to the "Street',
come out the worse for the wear.

  Something needs to be done about the PRC system, especially in ETS. Having to rank people, even though
H.R. won't call it forced ranking, Is completely unproductive in a Division with a high average years of service
like ETS. The PRC system Is too labor intensive and produces very fittle except confusion, hard feelings and
extra expense.

  I for one, am very glad to see you (Ken Lay) back at the helm!! There are very few of us who do not have full
faith In you to return OUR COMPANY to a position of respect, profitabilty and prosperity.
  I was appalled by the statement Jeff Skilling made regarding Enron and pornography. I read it in one of the
internal publications and I can't believe that It was Included. I cannot imagine Mr. Lay ever making a statement
like that. I am very relieved that Mr. Lay is once again CEO of Enron.
  * Several points should be made:

  (a) The so-called mangers at Enron have rarely managed. They have usually been traders or developers or
others who were very hood at what they do individually, but leadership is rarely their forte. Someone at Enron
has to make sure that people at all levels are taken care of (and Human Resources has done a miserable job of
that to date).

  (2) The PRC is counterproductive. Sitting in PRC review meetings is an exercise In defensiveness,
destructiveness and humiliation when It should be a celebration of what is good about the employees of the
company and an analysis of how to make those who are less driven, less skilled or less capable more
productive members df the Enron community. __

  Tkursdrn. SgNernher fire, 2001 EC2 000046302 Prt,$C , r f R Y
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  (3) There are many of us who have known for years that certain members of the executive team were driven
more by self-interest than company concern. It is good to see some of them leaving the fold.
i We talk a lot about R.I.C.E. (respect, integrity, communication and excellence) and 1 see all Of that in Ken Lay.
However, there exist many areas in the company where staff ideas are not really welcomed, changes are made
in people's lives without even asking for their input. Change is good but management should involve (ask for
input) from all levels before making sweeping changes that may or may not be the best thing for Enron but they
are the best thing for management.
 The back office infrastructure has been totally Ignored and
  this will continue to cause heartburn for a long time unless steps
are taken to fix the problems,
0 This may sound crazy but when I heard that Ken Lay was leaving I was so sad it was like losing a Father, after
asking around and talking with others they felt the same way. During our all employee meeting as t sit there
observing all the tears that came to peoples eyes when Mr. Lay announced he was backlit

  I do want to thank the redeployment team effort and I thank God and the people I mentioned above but if it
wasn`t for Stan Horton and H.R. I may not be here today. I think there could be some improvements to
redeployment.
0 t truly believe the fundamental success of Enron is based on the talent of our people. This is mainly
accomplished by having the right leadership at all levels focused on coaching and motivating their staff. I have
been at Enron for over 5 years and have held close to my heart the Vision and Values of this company. Im
currently a Director and manage a large team. I have witnessed leaders at higher levels not portraying the
Vision and Values of this company, this hurts Enron more than any single item. Happy motivated people work
harder, its not rocket science. All of our management should be held accountable for adhering to Enron's Vision
and Value system. Ken's return has been instrumental in the morale of myself and my team. People truly
believe in his character. Even as CEO he treats everyone equally. I have personally witnessed Mr. Lay on the
elevators talking to folks as if he knows them personally, this is awesome. Imagine if all of our top leaders
portrayed this type of behavior.

+ Question: There was an article in the Aug 17 Wall Street Journal about five Hollywood studios (Sony, Warner
Bros, Universal, Paramount and MGM) forming a joint venture to deliver feature films an demand to consumers
via the internet. I can't find the specific article announcing Enron Broadband's termination of agreement with
Blockbuster Video (which would have delivered movies over the EBS network). However, I seem to remember
Ken Rice saying something to the effect that EBS didn't want to work with a distributor such as-Blockbuster, but
rather, Intended to work directly with the movie studios. Seeing that these five major studios are joining
together to provide a product that Rice seemed to be referring to, I was wondering whether EBS was involved at
alt In these talks? Also, are we still pursuing the direction (of working with the studios that Rice referred to,
amongst other strategies?
  Issues to be addressed:

  EES Customers are receiving SHUT OFF NOTICES at an alarming rate. Recommend a root cause analysis be
done to determine why this continues to happen.

Probable causes: I
Customer wants EES to play bill that is not covered in contract.
Incomplete TPAs resulting from de-DASR/re-DASR fiasco earlier in year.
Customers not set up in billing sysem.
Customer 'missing bills' issues not readily addressed by CSC or EES Bulling Management Bills are now past-
due and start shut off notices.
20/20 Double Discount Effect - CSC taking 20% rebate on amount Invoiced by Utility (SCE & PGE) not knowing
20% rebate was already taken into consideration in invoice. These under-pays will also trigger past-due & Shut
off notices. - - -

Thnrr,A{r. Teplember 04, 2001

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Payables Due Date Issue. When entering due date for past due and/or shut off notice payments Into SAP,
payment due date being entered is the date of the shut off and APs disburses funds based upon this already
past-due date which compounds the problem.
  ED[ Lag issue. Add in an atledged delay (2 days) of EOt payments in August (due to an IT virus), and you will
have created hundreds of shut off notices.

Long term resolution of this Is necessary.

0 1 believe this survey will uncover tremendous discontent with the PRC process. Performance review is
necessary and important to a company and to employees - both the reviews from superiors/peers is vital, as
well as self-assessment. However, this PRC process In particular engenders a battle mentality, and I believe
may very well be the cause of losing top performers rather than 'deadwood.' The arbitriness of fitting within the
scale to best serve your group's overall rating needs, and the capriciousness of having people review you
and/or block your ability to'score weir who have NO familiarity with your skills, performance, OR job
responsibilities, is counterintuitive to getting the best from employees over the course of the year. Its all about
positioning rather than client service and innovativeness. And this, coupled with a very poor external image at
this time, is causing the quick disintigratlon of employee morale. The current leadership (in Ken Lay) Is
certainly able to turn things around, and I am optimistic that it will,
& We are so blessed to have you back Mr. Lay.
0 My credibility and reputation of integrity and service is at many times jeopardized with my customers in the
marketplace. Previous to Enron I promised and delivered professional services to customers. I was known for
my Integrity in service delivery. Now, with Enron, in Instances where I am merely attempting to deliver what we
promised in a contract my efforts are thwarted by lack of internal resources that are overwhelmed, or broken
promises to deliver. It seems like I am a shield or a front to make customers believe there Is someone
servicing there account. Without Enron's support their shield will fall and someone will have to stand tall not
just before the customer, but possibly the customer's legal couch as well.
i 1. Reevaluate the Associate/Analyst program - It is so poorly managed. The Associate class of 2000 submitted
to Billy Lemons our comments about the program. These should be viewed by upper management (including
Ken Lay) and taken seriously.
  2. Salaries should be level with our competitors (rumor has it that El Paso and others pay more)
i Unfortunately, over that past year employees have lost the sense that Enron operated as a meritocracy.
Nothing can erode the morale of a company than this type of malaise. The movements and maneuvers at the
higher levels were viewed with scepticism given that there often was no corresponding reference to an initiative
or endeavor that the particular individual was responsible for.

  Secondly, the disparity in the amounts of money that many were making did not reconcile very well with what
others earned. The integrity of the bonus plan and PRC process is under attack. To your average employee
the critical component appears to be who you know or who you work for and not how well one performs their
job.

  Finally, there is a glaring underrepresentation of women and people of color in upper level management. I am
suprised that Enron has not been taken to task for this earlier given their high profile. A serious, commited and
sustained should be undertaken by you and the Board immediately to rectify this imbalance. The individuals
should have a commerc platform to quantify their contributions to the company and managers should be
rewarded for promoting a h d grooming for leadership individuals from these underrepresented groups.
0 Mr. Lay, It used to be that we wanted to get our name out and known to the public, but somehow we went
backwards. How about supporting something at Yellowstone National Park to get our name recognized by the
millions of people that pass thru the park. You know there are alot of both Americans and foreign visitors from
all walks of life. the exposure would represent us as being not only enviromentally friendly, but also reputable
and on the move once again.
  Alot of employees have more than just their jobs at stake with this company, many have their retirement

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dreams. Make believers out of us once again.

0 The person who follows Ken Lay as CEO must have most of his personal attributes (caring, people-oriented,
great manager of people, visionary, personal Integrity, community and civic minded, great communicator), in
addition to his strong business capabilities.

We want to hear the good and the bad news from this survey and what Ken and the management committee
wilt do fix the problems. The Pulse results were not communicated to employees well at all, and there was no
follow-up or follow-through on the proposed solutions to Identified problems that happened to be identified. If
you take the time to ask us, then tell us and then do what you say you will do.

  I liked the format of this survey. It went right to the core of what is brewing under the surface !at our company.
a Listen to your people and take care of those who want to grow within the company. For example I worked full
  time and went to school full time. I graduated, received my engineering degree, and thought I can contribute
even more to Enron. Didn't happen. Yea, Mr. Lay read my email and forwarded It on to Cindy Olsen, but there
was no follow up and frankly it becomes tiresome. What am I doing to take care of this? Unfortunately, I'm
looking for a job outside of Enron. Hopefully someone else will appreciate my skills and what I can bring to the
table.

i Dear Ken Lay,

You sought'honest feedback," "confdentlallty", "responsive action steps," and "two-way communication." I
share the following commentary because I still believe that you personally hold Enron's vision and values
seriously. I am holding on to the edge of the tier, so to speak, about the negative Issues I have seen In Enron.
If what I say will sound like something from a bitter employee or a troublemaker, I have not succeeded in
communicating with you about my issues with Enron. Please understand that I feel I am making a big risk by
disclosing my concerns in this medium even though "confidentially" Is assured. There are things that I like very
much about Enron and I carry a lot of hope in you personally in giving Enron closer attention to its long-ignored
problems and ultimately a healthier work environment. I admire strongly and share the visions and goals of
Enron- and want to see them In practice In this company. I hope you can communicate your thoughts and
reaction with me directly soon.

Sincerely,
Hector Alvier

  1) Human Resources have very serious problems. In my two-years in Enron, I became increasingly
disappointed with how little integrity and respect this area of Enron carried with me and other employees. Not
only have worked with HR but also have worked in HR as part of a year-long rotation. I observed irresponsibility
in hiR handling personal and corporate Information, resulting in perhaps politically convenient but nevertheless
unsatisfactory excuses. An example of Irresponsibility and suspicion was the recent discovery of my highly
confidential employee file on the desk of a non-Enron person. which was somewhat unsatisfactorily excused as
a courier mistake when I asked for an explanation. Another example of neglect was the failure to manage the
human resource budget and identify variances in an out-of-control spending process primarily due to poor
communications between management when I worked in my rotation (HR Analysis and Reporting). In contrast
to supervisors ]'bad in other Enron companies, my directors in HR were, with all due respect, political
  machines, not problem solvers. They appeared to come across as thinking and acting It was more prudent to
play a blame game or a to war than to resolve or communicate serious business problems with the executives
or with their Enron counterparties. Their conduct and lack of team commitment and Involvement In our work
shocked and ultimately hugely disappointed me In 2000. I have tried repeatedly to communicate directly and
indirectly with them in different levels with very little success and instead I felt punished for pointing that out
honestly and trying to communicate. Far from being a simple case of personality conflict or unfortunate or
accidental misunderstandings, the problem was sourced in people who took Enron's values and visions very
cynically. Subsequently, I documented and wrote down specific grievances about this experience among
others, and since they involved violations of the company's policy and values and visions, 1 submitted these
concerns to Enron Fair Employment. I requested a written response to my 4-page paper involving specific

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  complaints and Issues - I was refused and given a very empty explanation in a one-hour verbal meeting. Rick
Johnson, the person who refused a written explanation went further and admonished me what I believed were
urgent and Involved serious communication problems for reasonable accommodations critical for my job. The
fair employment director did not show acknowledgement of my concerns.
  2) In the summer of 2000, after my internship, Celeste Roberts, the director of the Analyst & Associate program
made a very clear promise that I would be a full-time associate when I came Into the program but failed to live
up to it. I have o hearing problem, but I heard her very clearly and specifically an her assurance with a revised
offer. I followed through several phone conversations and emaits with her staff (i.e. Shelly Jones when Celeste
Roberts was "unable" to return my calls for at least 3 months and did not get an indication of any contradiction
to that promise until December 2000 when, with shocking disappointment, I received a revised offer as analyst,
not associate. Given a almost a literally last minute notice and not much alternative to wait out and look for
another more fair alternative, I trusted the program in good faith that they rightly placed me and in what they
gave me as a carrot of soon-to-be promotion. My chances in Enron has been damaged because of my work In
"commercial support" .work In HR -despite its requirement to Enron in analytical ability, the program did not
esteem my role as important or critical as the "commercial" roles by other analysts and associates. My good
faith has been deteriorated after seeing how promotion opportunities have been closed to me (out of procedural
changes) and making side-by-side work and background comparisons to associates and analysts that made
the program quite inconsistent with what they said In public. Bottom fine, the program failed to rive to its
expectations in regard to promotion and mentorship and communicated misleading signals and distrust with me
and other analysts. Later on, I have heard similar attractive but broken promises Celeste Roberts made with
other analysts and associates. The last time I heard from her, she still maintained that she never made such
promises; this greatly disappoints me to why Enron would put someone with low integrity In such an important
position in the first place -- especially when these concerns were made known a while ago when she held the
job. Although she Is out of the program (and Enron?) and there seems to be more honest management on
behalf of Billy Lemmons, the damage has been done. Instead of a cover-up or a convenient "let's move on*
attitude, there should be some investigation in the conduct of the previous leadership of the Analyst Associate
program. If there was, it should be revealed to the recipients of the program. I would appreciate some
acknowledgement and justice in this problem.
  3) increase diversity and affirmative action in the direction of people with disabilities, I have tried to be a mover
in ibis, but, while the spirit and words are there, I have faced some friction and apathy. I have received very
positive lip service but not enough action (actually, nothing at all). My vision may be a high can, but one of
Enron's goals is to Improve diversity - and this is a good area to improve diversity and find a lot of untapped
talent. I keep hoping that this will move in a faster direction In which I could play a bigger role.
  4) The PRC process is not a 180 degree process between management and employees. It is very
unidirectional, going from supervisor to employee. There Is also very insufficient communication about how the
process should be and Is done. The PRC committee appears to be pulled by many ropes and pulleys by a few
over many and is not understood by many. The PRC is also a highly political process - hugely advertised by
key people who carry very conflicting views about process - producing a lot of anxiety and conflict for most
employees. Please understand that i am a BIG believer in meritocracy and in employee performance systems
- and the theory behind the PRC Is very attractive to me. However, in practice, the PRC so far seems to have
pushed us in the other direction. Sometimes, something can be worse than nothing -but we need something
better than what we have now In the PRC. Despite good things advertised by key individuals, I have heard and
seen very little that indicates a fair and objective PRC process. Perhaps I ask for the Impossible, but when
PRC is communicated as a healthy system and contradicts my experience, it only produces a cynical result.
  5)1 did not understand really why Jeff Skilling resigned after 6 months on the CEO job. A short-term drop in the
stock price in an adverse market environment does not justify his resignation, t understand there could be
'personal reasons" to his resign tlon, but I don't understand why it should be so private for a man so public in
=nron. I respect his decision th ugh and have good faith for his unexplained reasons, but it left me a slightly
tinny taste in my mouth. I was a little surprised how some employees were glad to see him go.
  i) I understood there were Issues of "respect" and "Integrity" in Enron brought up when you (Ken Lay) spoke in
he all employee meeting. What did they involve specifically? Were they issues like the ones I brought up?
'Vhat "responsive actions steps" wilt be taken? In the spirit of "two-way communication," will there be a
esponse specifically to my commentary, issues, and questions?

'though EES has recently started to speak of the importance of the customer, focus on meeting our

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  contractual obligations has not received much attention in recent months.
  Recent change seems to have taken on the feel of change for changes sake, not because their is a specific
goal In mind.
0 1 am making a suggestion which I think will be very good for all of us and it is simple.

   Have an environment in the workplace where the unwritten code Is to "constantly train and Improve one
another on the job".

  I can elaborate on this, but it" take a very long elaboration. First, the benefits. Everyone will have a chance to
be knowleagable in the work place, thereby eliminating only a few people knowing everything. It eliminates crab
mentality where only a few people will know all the skills and use it as job security. What If that person gets sick,
what if that person leaves the company. if all knowledge and skills are spread out and shared, thect all of us will
know what to do and making everyone Important.

  This atmosphere should start from the top management. The Idea of helping one another should be
emphasized by upper management The ideal way is drip system of training. Like the drip system of farm
irrigation. A pipe has holes directly on top of a plant and when water flows in, there will be a constant drop of
water. A little at a time. It is better than pouring a tot of water once a day.

  Case in point. If an employee has some things to learn, he can read and study for It, but It takes time. If he
thinks a co-worker knows the answer, he can just go to that person and ask. The other worker should help by
explaining and sharing his knowledge. This might be just a few minutes. They could always do the knowledge
transfer anytime, everyday. It must be a mutual learning process for everyone. Everyone will know something,
either big or small. rt

  This Is so simple, but in every company you go, there is that environment of non-sharing and the saying "you're
on your own". If we want to be ahead of other companies and become number one...l believe we should have
this practice. This will also help In the PRS. Instead of seeing more people in the low level, It will minimize this
problem. Also, why wait for six months before you try to improve an employee when he can be given training on
a daily, drip system type training in a non formal, flexible manner.

  Another perspective...why is there a "Special Forces" In the Military? Why is it that the "Marines and Airborne"
are always saying they are the best Simply because, they are constantly training and improving. They got
knowledge transfers from people who have more experience. They won't say to the new recruit that "They have
to go to war and get experience". No...they are being taught almost on a daily basis about combat based on
real-life experiences.

  In AmE..ican War History. In World War It the Japanese have taken the lands occupied by America and Britain
In Asia, simply because they are more experienced with previous combats In China end Manchuria. Also
because all their knowledge In combat was shared to new recruits.

  Again it happened in Vietnam. Where America sent troops who have little or no experience. During the Gulf
War, it is different because the soldiers sent there are "well trained" and the outcome is a real victory for us.

  If we want to be number one...then we should build up one another and make the chain link stronger than ever.
Many companies are say. q that they are empowering their people...only in words,not in actions.

  The whole world will look lrp to us In envy when we say "we at Enron Is making sure everyone will be a better
person In life and at work." and then we can truly be number one.

  1) 1 have been with EES for almost 3 years and I would tike to continue working with EES !.like the idea that
even though we are a large company, we still have an opportunity to make a difference.
  2) As a professional, I have a difficult time when an Executive leader

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gets up in front of his department and says that if they want to leave
then they should leave the company and he would help. He based this on
the fact that he understood that the job they were originally hired to
do was now different. This was just after half of the Svc. Mgmt. dept.
had been redeployed. This is not what I expect from a Leader at Enron.
At Enron you expect your role to change, you expect to be challenged
in different ways. I do Not expect a leader to say this. The personnel
asked themselves If this was said because more redeployments were coming
and he wanted them to leave. This is Not the motivation our employees
need. Mr. Lay, I have Tremendous respect for you and the Enron organization.
I hope to be able to continue making a difference and living the values
that you stress at Enron. However. I feel we are going to lose good
people when we have this type of management. Thank You for allowing me
to voice my opinion.

I think that each person who Is not In a true commercial role should be considered valuable to the overall
objectives of the corporation, and should be treated fairly in the PRC process, although they have no margin
targets.per se. Many times In the past I think individuals were highly compensated for taking risks that
ultimately dragged down Enron's stock performance or business viability, which was a serious mistake that
senior management appears to have missed. Many of those Individuals are no longer with Enron, and have
taken their fat packages with them. IT's time Enron became a place where you can trust your neighbor, you
can be judged based on a job well done with objectives metlexceeded, and not solely on whether you closed a
deal at ANY cost. This, in my view, is the core dilemma of Enron, how to treat its people fairly within PRC while
encouraging sustainable growth within the various buslensses.

Mr. Lay, I'm glad you're back. Can we please build something that wilt last?

I am concerned about what seems to be an overly short-term and "unfocused" focus of our company. From
getting rid of personnel who were focused on monitoringlanalyzing the future and our competition (e.g the Mgr.,
Competitive Intelligence and Future Foresight for EES) to endlessly re-org$nizing, re-deploying and having
bunches of people in the lobby for the new-hire orientation, it just seems like we're treading water and churning
staff. Further, It seems that since everyone thinks he/she won't be around/doing the same job in six months
time. they don't take ownership of decisions and others are left to live with and/or fix the consequences.

In the big world of city attitudes, striking the balance between pay and work is crucial - people don't stay in their
jobs just because they like the work and their colleagues.... everyone will move for money and security. In a
weakening market this balance will become more difficult to achieve, for both employer and employee. If Enron
wants to be the next 'bank', the split between 'commercial' and'support will require lots of attention - or the
support professionals will be deeply unsatisfied - as today's professional support teams provide heaps of
guidance and Ideas to the commercial originators.

I am disappointed that all the founding executives such as Jeff Skilling, Ken Rice, Cliff Baxter, John Echols,
Kevin Hannon has left the company. It seems as they lost their Inspiration and drive by working long hours and
weakened travel and what else? These gentleman were an asset to Enron and I enjoyed working with them and
contributing to a team effort.
The PRC needs serious review. It may function at the MONP level but, not at the lower levels. The salary and
titles are not consistent among t e business units. I am experiencing this issue and having been trying to
resolve for a year. The unbaiancte affects my compsentation and bonus and earning potential, coupled with the
stock price, it has not been a financial stellar year.

1. SAP and downstream processing.

Our SAP install and design was one of the very best I have heard of. We developed a single enterprise system
for all of Enron with a flexible design in a minimum amount of time and at less cost than most large SAP
installations. Our support of SAP? is terrible, There has been no knowledge transfer to our Enron employees or

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  super users. In fact, most of our Enron talent has left the company either due to frustration or Inability to be
effective In carrying out the design and application of the system. This was not our original plan. It was to keep
our super-users and their expertise for the benefit of Enron. At this time, two plus years after initial go-live,
there are still no user groups defining the future and current priorities of system enhancement - no user
involvement what-so-ever.
  No system communications of any type from ISC except for system outages. Our support is too heavy on the
external, expensive analyst side and made up of people who do not understand our business, nor our
requirement to change things fast. Most of our top level Enron people who were involved In tha project have
abandoned in disgust, the enthusiasm displayed with a successful Implementation, turned to frustration. There
are major training, data monitoring, and support issues that need to be fixed NOW. We have people entering
data who have no knowledge of what they are entering - just trying to make system work. Reporting and data
accuracy coming out is consequentially unreliable. We need to upgrade to current SAP version before too
much Enron enhancement is applied to SAP design thus making it much more difficult to upgrade generically.
Entering data correctly should become part of performance and monitored.

  iPayft - there is nothing wrong with SAP or it's processes. It is the caliber of people entering Invoices. They are
uneducated, untrained. Cannot make decisions regarding tax, commodity judgement etc. They simply punch
numbers. This will not work at Enron. We need knowledeble people paying our invoices. They have to know It
the Company is correct, if the tax rate is correct for the delivery location, what the final destination was for the
materials, etc. The system will process data as entered, it cannot make those decisions, only the human mind
can ask questions. Can Source Net process invoices faster - perhaps yes, but if tax liability is wrong, and OL
information is wrong and accountants spend hours journaling amounts to correct accounts, and we have
  greater liability for tax audits, did we really buy cost savings? Also, the time it takes to process an invoice is
much greater and involves may more people handling the document Enron requires many paths for invoice
processing. Contract invoices must be checked for rates, time sheet verification, approval of work done. Use
tax is not getting correctly processed when included in the contract amount. Retainage processing is a major
Issue. Purchase Order invoices must be matched to the receipt and PO. We are skirting our normal matching
procedures In many cases just to get an invoice paid. We have duplicate payments. We have many more
people tied to their computer and desk top for invoice approval. Many of our managers are working In the field,
and this type of work requirement is time consuming and unproductive. Most of all, we havevendors that are
not getting paid according to terms because of our internal processes. This is really causing havoc for Enron In
the business relationship area. We should have tried iPayit in a small trial environment rather than trusting all
Invoice processing to an external company. Our former AP clerics In retrospect had many years of working with
Enron AP processing and could catch blatant errors in most instances. iPayit processors cannot do this .... and
the assembly line processing feature will miss most of the thought processes that are required to catch this type
of error. Computerization Is great, but as always, the data-is only as good and correct as, the employee that
enters It. Enron because of it's diversity in business processes has many, many tax issus. Some of our
business are exempt due to resale, some due to export, some commodities are exempt due to usage. A good
AP clerk will know our different business and recognize some of the processing requirements for each business
type. To succeed, SourceNet must commit to high level training of their people on both base tax processing,
Vertex data handling and requirements, SAP data requirements, etc....and to paying those people well enough
to keep that expertise. The cost savings gained in AP processing will be spent in expanded general accounting
babysitting and error correcting, tax department expansion, internal and tax audit expansion etc. Let's look at
the whole picture before making these snap decisions on what is best for Enron AP processing. Sometimes
what seems good on the surface is not really what is best for us as a whole,

  2. Change and re-orgaqization are required at Enron. but they should only be for the better. 'We should plan a
little more and not makel such hasty decisions. We should include some of the employee experts in our
decisions - more of a team effort to design the change. Our management tends to.come from outside Enron
and they are not always familiar with our historical knowledge and make some of the same mistakes that were
made before. No lessons learned. Hasty, uninformed judgement calls.

  3. We put a good deal of effort into our Analyst program and mentoring program, but I have seen very little
training or encouragement for middle and bottom level management and supervisors In the last few years.
These are the people who make the top decisions work, the ones in the trenches. They are also a valuable

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  asset to Enron, and therefore worth some equity investment. On site training would be most cost effective and
schedule beneficial. It would also help us have happier employees due to better management skills. Perhaps If
we spent more equity dollars on our current employees, we would not have to rely on Arthur Andersen,
Coopers, McKenzie etc. for our top managers and could rely more on Enron employees who also have some of
the business knowledge and lessons learned experience.

4. We develop expertise and then tend to cast It aside. Example: We had a top knotch international
procurement group at EECC with expertise in international procurement, expediting and logistics. With the
reorganization, the skills developed in this group are left under utilized while we develop new procurement skills
in the ETS group with under-experienced people, in the EES group with Ineffective procurement practices.
With iBuyit, we allow anyone to become a Buyer - no professional procurement training required. We have
Global Sourcing involved, but very little professional communication from that group to all the professional
"Buyers" at Enron. No interaction between all the Procurement departments at Enron. SAP makes a tot of
procurement functionality previously unavailable because of system constraints available. We are under-
utilizing our investment. We are still using system same way as on go-live date. We should be involved In
expanding usage of SAP to give us better information for cash flow, commodity expenditure etc. Correctly
used, the system can provide multitudes of information to planners, project management etc.

Procurement Is a big area - a professional area - that could save Enron lots of dollars. In this day and age, we
would do better to have expert commodity buyers -we are as close as an e-mail or WEB request away - to
handle any kind of large purchase for Enron. Expert procurement personnel have knowledge of material
availability, new product development, best sources etc. Instead, we tend to farm the procurement function out
to job site personnel, contract buyers,and others who are not true professionals and usually have other, more
important work to do. Most think of 'buying" as a "pick up the phone and call Joe" requirement, it truly Is not. It
requires much experience to negotiate Terms and Conditions, Payment terms, progress payments, bonus-
penalty, correct material handling etc. With the level of communication effectiveness that exists at Enron, we
do not need the procurement function spread all over many positions. Many of our professional Purchasing
Agents are Engineers, or have some type of field experience. They work with engineers and project developers
as team members and in many cases have saved project costs and caught errors in equipment design or
requirements. These people are skilled in vendor negotiations, price neglotiatton, contract language,
commercial code requirements, and can help us avoid unnecessary litigation. They are professionals, just like
our traders, tax accounts etc. With our expanding international involvement, it should be a requirement to have
an experienced, top notch procurement group to handle our material requirements for our global business
requirements.

iBuyit is a great idea for everyday commodity purchases from the desk top, but it Is not a great Idea for pipeline,
power or facility procurement except for operational items. And, it is very time consuming. There are safety
issues in the material manufacturer and sourcing. Engineering standards to be aware of, substitution Issues,
logistics issues, material handling procedures, documentation requirements etc.

5. Record storage. We are continually fighting for electronic storage space. IT policies of 1 year data might be
good for traders, but not good for pipeline, power, engineering functions. Paper storage Is expensive. Online
storage, not so. If we don't want to keep this Information on-line, why not help the business units develop good
methods of downloading Information for record storage. E-mail has become the communication tool of the
time - just as paper memos used to be. A project can run for two, three years .... and, to lose data after one year
can be detrimental to project success. Each of our business units has different requirements, perhaps some
flexibility could be justified I some requirements for different business types.

We generally do not see tax audits until 4,5, or more years after a project has reached completion. If we cannot
produce the correct Information, we can owe money. If we cannot produce material certifications, testing
information etc. on materials ordered for a site that had a spillage or explosion, we could be liable for extra
dollars. Contract language and Info can be important long after the contract was completed, due to warranty
requirements, etc. We want to avoid this type of liability, and loss of records can be'very costly. It is difficult to
export large files to vendors through our fire-walls. Engineering statistics, equipment drawings, large spread
sheets etc. that are exchanged with contractors, vendors, partners and others become a liability and in some

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cases we must resort to paper to get the data to the destination. I would like to see IT help us solve our
problems rather than tell us our limitations and enforce them without regard to consequences.

6. Mr. Lay, extraordinarily happy you're back. it's going to take a lot of hard work from all employees to turn us
around, but It will be a lot easier with someone at the top who listens and cares.

 I'm glad Ken Lay is back.

! Enron has taken risks to gain the high returns for our investors (stock price). Unfortunately these investments
have not flourished as expected, There have been other Issues, such as California and India that have also
occurred untimely. This has driven investor confidence very low. There seems to be a reoccuring issue of
"unclear financial reporting"?

The employees have been the "bedrock" of Enron. Keep employees clearly informed of our situation. Keep
moral high, but do not shelter employees from the facts (good or bad).

  One Issue I have is better treatment between employees with degrees compared to emotoyees with yrs of
experience.

For experience: I have 9yrs of Corporate experience, and was promoted end of yr 2000, based on my
experience, proformance and my ability to out proform my peers, and handle mufti-functions, and was told my
pay could be better, if I had a degree, the only futher education I have is Bussiness School certification. It is
hard to attend any schooling when we work long hrs, and even sometimes on weekends, and yet take care of
our personal life and family. I attend courses that are offered by Enron when they are available. I was told for
my review end Aug. that I would be competing with empotyees with degrees In other departments, since I'm the
only one in my group that has the I have.

0 111 find the operations reporting capability amazingly Inept for a large computer savvy organization.
  2/ initial Impression is that people get promoted for trading profitably which can result In both weakening trading
and having managers who aren't necessarily good at managing.
  3/ There Is still too much internal battling over accounts - natgas should not have liquids business end vice-
versa now that EGM is fully staffed.
0 Really appreciate Mr. Lay doing this survey. Employees want to feel as though they have a say, It Is our
company too.

One of the most unsettling things at Enron is the time spent on PRC. Is it really necessary twice a year???
Why if are ranked SUPERIOR by people who know you - then in the PRC meeting you come out a ranking
lower by people who have never worked with you and may not even know who you are.

  I also feel assistants who have spent years in there careers doing a top notch job should receive compensation
and not be told they are paid top dollar in the Industry. What Incentive do we have to continue doing the top
notch job??? How many years will Enron be able to keep the "BEST" If they don't show we are appreciated with
raises. We are not working for the rating - we are working for the almighty dollar. Many of us are the sole
support of our families an the cost of living continues going up so should our salaries. If you aan't do raises
then how about higher bonuses?
,f Remember the days when' EDC would develop projects like Hainan, Dabhol, Dominican Republic, Brazil, etc.?
Remember how Enron Power, EOC or other operations groups would have to live with the bad deals while the
developers were buying houses on fairways at the Woodlands? Seems to me like EES was set up on the same
model. Originators signing JC Penney, Starwood, Lilly, etc. with no concept of how we ca-possibly deliver on
the promises made. And worse, marking profits that will NEVER come to pass. So. they get promotions, or
leave rich, flaunt their Porches and Ferrarls, and us poor working folks have to deal with the mess. These
same people dominate the PRC, rewarding their buddies, and arbitrarily getting rid of the companies

71a,trrth, ..Sej'lrnther 04. 211111

EC2 000046311

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Ken Lay

Ritsponse
backbone - the average working guy In the trenches.
  Ken, THIS HAS TO CHANGE TO RESTORE MORAL AND GET THE COMPANY MOVING FORWARD
AGAIN. Thank you for the opportunity to do this survey.
  1. I do not understand why (in the face of $83/share ESOP) options issued at year end 2000 for 5 years, why
we do not allow employees to trade those options for an equal number of shares priced at today's stock price --
no change of date when the option expires - trade share for share for options that have not been exercised. I
do not see this as violating external share holder rights because these options were issues to imployees not to
non-employees, and because they were issued as part of the salary compensation package to employees. My
way of looking at this is to say to the external shareholders, "Hey If you want to see the Enron stock increase In
value in the future, that will take talented employees like those we have on board, keeping them is more
  important than worrying about what others outside the company may think because to do so will improve the
odds that our stock price will improve and sooner, rather than later by haveing that talent on board. What about
the saying, "our employees are our most important asset", well If they are, then let's give them a hand in this
situation -- one that they did not create, but are the ones suffering. _

2. 1 do not understand why, if we expect to be the "World's Leading Company" we are not doing more "leading"
in the face of all the negatives about Enron and the deregulated electricity market in Catifirnia and the western
US. Has Kenb Lay considered taking a more aggressive "industry Leadership" role by mobilizing the energey
companies and the state governments to work together to solve the Issues rather that stand behind the banner
of '"it was legal free competition and we did nothing wrong". Whether we did or did not do anything wrong, we
are getting blamed for something the California and Western US governors "think" we did, and that seniment
will be harder to overcome then anything in improving our stock price and getting 'Wall Street' to respect the
stock again. Wall Street cannot solve our low stock price........ the situation is the general public does not love
us as a company...... why not turn the tables ever so subtley and get people thinking that we are not only the bad
guys, but also that we are working to solve the issues they see as causing us to be seen as than bad guys ..... by
leading other energy companies to the negotiation table, we beneift by Ion the eyes of the general public by
demonstrating 'Industry leadership' and our stock price benefits by having shareholders who appreciate that
leadership. Something akin to the colitatfon of business leaders in Houston that Ken led to get Enron Field
funded and built.

f I am a Director at EES. I ahve been here five years. The edge has been taken off of this company by the way
the recent redeployments have been handled. Many employees have lost faith and confidence in this company
to deliver the goods. The company appears to have lost its concern about the employee while expecting a
greater level of loyalty to it.

  The ARC system pits workers against workers. Best thing to do with it is TRASH IT. Obviously employees
need to be evaluated and those thoughts need to be communicatated. However they don't need to be in
competition with one another. Enron needs the "steady Eddies" along with the superstars. One may stay at the
same level while the other rises through the ranks, but they're both needed.

I'd love to see us go to a 4 day work week. All of us work really hard when we're here. You just don't see
people goofing off at all, and I guess that means employees are really committed to the company and to their
roles here. Sometimes it's hard to relax and really take a weekend "oft" and I think having 3 days off would
really help with that.

0

Thurv,lm, St plembcr 116, 2001

EC2 000046312 Page 76 t,188

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Kevin Hannon

Response

* - We need to retain our talent, including at senior management levels. The recent leakage in talent has not
been limited to El-people like Mark and Sutton, now Skilling leaves and is followed by Rice and Hannon. If the
'top dogs' are leaving the boat, is it a sign that it's sinking?

- What does being 'The World Leading' company means? Leading in what? We need to know what we are
about, the previous vision of being the World Leading Energy Company was dear and led to a strategy.
Change is good when it leads to something, but it looks like we're starting to change just for the sake of It.

  - We need to generate recurring earnings and CASH. Mark to market earnings are great, but the street Is
probably right in being weary that we'd incur major charges if the accouting rules were to change. Cash
generating assets are a good thing, world-class companies prove that every day, and we badly need a couple of
them. It was our asset strategy that was probably wrong in that it was too aggressive and overly reliant on
deregulation at emerging markets, in addition to an Incentive system that created agency problems.
  Some people In senior management positions may be good at the deal, but have little leadership ability (e.g.,
Jim Fallon, Greg Whalley, Kevin Hannon) while the true leaders go unnoticed (e.g., Stan Horton, Rob Walls,
Mary Joyce).

  The hardest thing for me about working for ESS was the ability to respect that Enron is a Fortune 100 company,
when I saw so much money being wasted on a daily basis. EBS did not set the standard correctly when they
started hiring people and the result was a lot of overpaid, underqualifled people doing nothing but spending
Enron's money on travel, food and entertainment. I have never been at a company whos spending was so out
of control. The other thing that really bothered me was the lack of respect other Enron entities gave to EBS. I
was in charge of making sure Enron's Analyst Conference was webcast and was told on that day, when we
were having network difficulties, that there were people at Enron that hoped EBS would fail. Even if that is the
case, I don't think it was appropriate to be told to me. On that same day when we were having network issues, I
told Ken Rice and Kevin Hannon that Mark Koenig had been very upset at about 5 am and that I Just wanted to
let them know what happened so they would be prepared. The response I received from Mr. Rice was, I don't
care about the Analyst Conference, I just want the CNN test-to work later today. Again, I don't believe that
anything like that should ever come out of a CEO's mouth, but then again it Is the same CEO who drank too
much at the Portland Christmas party and told me I was beautiful. These incidents reflect very negatively on
me, even though I did enjoy what I did and my co-workers. I am just shocked that these type of things aren't
better controlled.

  I work in technical support for EBS. The now defunct office of the Chair for EBS (Rice/Hannon) wws the worst
executive leadership I have experienced in my 13 years as a software system developer. There was NO
leadership - no communication, no direction, no decisions, no email, nothing. Strong, decisive decisions about
the role of the network and its relationship to trading (i.e. world's best network vs a commodity to trade like any
other network) was needed but never materialized and contributed greatly to the financial problems of EBS. In
the last three weeks, I have already received more Information from Ken then in the entire tenure of Rice and
Hannon. Keep it up and keep providing direction.

The most serious issue at my level Is the "prima donna vs peon" attitude of Commercial to Commercial
Support. I understand that traders are busy - we all are. They are also the money makers for the company. I
would assume they are compensated accordingly. It is very difficult to provide support to people who regularly
don't show up at meetings, don't reply to emailslphone messages, and don't review requirements. This seems
to be a common problem throughout the company which tells me that this behavior Is at least tacitly acceptable
at the highest levels or it wou)d stop. Cooperation between Commercial and Commercial Support is the key to
success, not competition. :

  The trading floor layout IS NOT an appropriate layout for software development. This layout is conducive to
conversations, spontaneous meetings, and interruptions -in other words -making trades. It4.NOT conducive
to creating systems. Software development requires individual, clear thinking - an efficient software
development floor is one where you can "hear a pin drop". Different jobs require different layouts. I think the
attitude that the trading layout is fine for everyone is another symptom of the "prima donna" attitude found in
Commercial. ;

Tharstiur. ,SeplemAer Ilh. 2001 _ Page 77 of 88
  EC2 000046313

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Kevin Hannon

Response

Finally, currently an employee's bonus is based on how much perceived value their work provided for the
company In the last year. This makes sense. The employee's rating is also based on this perceived value -
this is unethical and lacks integrity. If an employee Is assigned to a high risk project, does excellent work, but
-the project fails to meet its objectives, the employee should not be ranked as "average" or "needs
improvement" because of this. Obviously, their bonus will be affected - their ranking should still be "excellent".
The current pressures of the PRC to "fit the curve" almost guarantees that the employee will be ranked lower
than is ethical.

  My main issues with Enron today are that I cannot get a good feeling about where we stand today and the
degree of promise that our future holds.

I can weather the Enron bashing in the external analyst community if I can firmly say that their writings are
misplaced and points unfounded. However, with the state of EBS and the stories of how major EES deals are
missing key variables and requiring major clean-up leaves me uncertain as to where future revenue (besides
Wholesale and ETS) are going to come from.

Additionally, from a personnel front, the following have left me with lower morale and (unfortunately) positivity
about working at Enron:-
- a tot of really talented and super individuals have left Enron for various reasons in the last year
- unexplained removal of those individuals whom 1 thought to be most deserving and akilled to make a
successful business of trading advertising (in the Media Services group) by arrogant and unproven Individuals.
- apparent lack of interest and caring by ex-EBS and now ex-Enron executives Rice and Hannon. I feet that
they fooled me as much as the market in the prospects of EBS (aside from the telecomm meltdown).

4 I am disappointed that all the founding executives such as Jeff Skilling. Ken Rice, Cliff Baxter, John Echols,
Kevin Hannon has left the company. it seems as they lost their Inspiration and drive by working long hours and
weakened travel and what else? These gentleman were an asset to Enron and I enjoyed working with them and
contributing to a team effort.
  The PRC needs serious review. It may function at the MONP level but, not at the lower levels. The salary and
titles are not consistent among the business units. I am experiencing this Issue and having been trying to
resolve for a year. The unbalance affects my compsentation and bonus and earning potential, coupled with the
stock price, It has not been a financial stellar year.
 Would basically want full disclosure from management if there Is some storm brewing In the background that
others are not aware about ...seems very odd that Skilling, Hannon, & Rice all departed the company within a
month....Is there something going to where they don't want to be around to have egg on their face when
whatever arises??

 This is my last day, as the Portland office is being shut down. While I had no illusions the Poittand office would
stay open forever, it was discouraging to hear one thing ("we're committed to a strong Portland presence") and
see something else Cobs and departments being moved to Houston). As a shareholder, I applaud the move to
cut expenses. As a (very-soon-to-be-former) employee, I can't help but think that this whole experience over
the lost six months could have been handled more openly. I find it ironic that the three people
  (Skilling/Rice/Hannon) who stood on the podium at the Marriott in Portland five months ago to announce layoffs
at EBS are now "pursuing other interests"...
 We need to stem the flow executive leadership departures. This cannot be good for the company In the long
run. We have lost Sutton, Baxter, Hunicke, Pai. White, Rice, Hannon, Sunde. A tremendous amount of talent
that is not easily replaced. We have smart people who know how to make money, but do not necessarily know
how to run a business with talented employees.

i I was offended with the recent communication stating the departure of Ken Rice and Kevin Hannon.
  Specifically, the part that gave them a very nice pat on the back for a job well done. Maybe I'm naive, but I think
many of us know what contribution they really made and personally I would have appreciated the
communication stating...Keh and Kevin have decided to leave Enron and we wish them the very best -- and

Tbirrsdar. September 116, 2001

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Kevin Hannon

Response
leave it there... as this communication doesn't have any fluff that might not necessarily be true.
 Glad Hannon is gone. He was filthy-mouthed, arrogant, and did not respect others. We don't need that type of
person in a key leadership position, or In any position for that matter, at Enron. The message needs to be sent
that that type of attitude/behavior will not be tolerated here.

Regarding United Way, I am grateful for the financial benefits that Enron provides to me and I was glad to be
able to give to support the United Way. I anticipate, however, that there might have been some hesitancy on
the part of other Enron employees to give as a result of the stock's decline. So we didn't raise as much this
year or have as high of a participation rate. That's OK. Let's just say we did our best and move on. No more
time extensions or emailsill

i Too many executives are leaving Enron with too much money after accomplishing too little. 13hatnagar, Rice,
Hannon - the list goes on. And EBS, while moving towards a streamlined company, is still retaining overpaid
underperformers.

In general, however, I am proud of Enron and hope we can pull out of the slide.

Than..lm. Sg'k'nihcr 06.2001 EC2 000046315 Pirgr 7s of 38

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LF ouise Kitchen

Respansc
I don't think we have really had a forum for employees to share their Ideas with management on different topics-
like the committees we had at one time. Cindy Olson was always listening to what employees are saying and
asking people to serve on committees to enhance change. We haven't done much of this lately.

I don't think we really embrace the vision and values at Enron - we talk a great game, but we idoot walk the
walk, We reward and promote people based on the risks they take and the money they make for Enron, but we
consistently promote people to high levels within Enron who treat others like trash. Several of them are on the
management committee- Whalley, Kitchen, Koenig (& Rieker), Lavorato, Shankman. It really sends a loud and
dear signal to the rest of us. It is not that the aforementioned aren't extremly smart,, talented and great for this
company, but they aren't the "whole package". Ken Lay has never treated any employee disrespectfully, but he
continues to promote people who do. I think this says something to everyone about how differently this
company will be run following his departure.

I also question many of our business ethics and it makes it very hard to work for this company and defend us to
others. I think we play too much in the gray areas. I don't think we are wrong in the California situation, but It
certainly makes me wonder what I don't know. I can't defend us when I know we pride ourselves on bending
the rules to meet our needs. I question Fastow and the UM deal. I realize that it is legal, but l think it walks an
ethical line when out CFO personally profits from an Enron deal like that. It warrants external attention.

I think we need to take a look at the way IR has handled our stock price drop. I don't think our "logistics
company" message has worked AT ALL None of us even understand it, so I don't know how anyone else can-
not customers, not analysts, not the media.

We really have some good guys here at Enron too- Frevert, Sherriff, Kean, McConnell, Horton... they work hard
and follow the vision and values.

I think the Issue is that if we aren't ALL going to follow the V&V, then just get rid of them and quit touting them.
Be clear with what the rules are to move ahead in this company.

r

r

I

  EC2 000046316

  T'lutn da . ,Sememhcr 06. 2001 Page Rn of 88

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Ylark Frevert

  t don't think we have really had a forum for employees to share their Ideas with management on different topics-
tike the committees we had at one time. Cindy Olson was always listening to what employees are saying and
asking people to serve on committees to enhance change. We haven't done much of this lately.

I don't think we really embrace the vision and values at Enron - we talk a great game, but we don't walk the
walk. We reward and promote people based on the risks they take and the money they make for Enron, but we
consistently promote people to high levels within Enron who treat others like trash. Several of them are on the
management committee- Whalley, Kitchen, Koenig (& Rieker), Lavorato, Shankman. It really sends a loud and
clear signal to the rest of us. It is not that the aforementioned aren't extremly smart, talented and great for this
company, tit they aren't the "whole package". Ken Lay has never treated any employee disrespectfully,-but he
continues to promote people who do. I think this says something to everyone about how differently this
company will be run following his departure.

I also question many of our business ethics and it makes it very hard to work for this company and defend us to
others. I think we play too much In the gray areas. I don't think we are wrong in the California situation, but it
certainly makes me wonder what I don't know. I can't defend us when I know we pride ourselves on bending
the rules to meet our needs. I question Fastow and the UM deal. I realize that It is legal, but I think it walks an
ethical line when out CFO personally profits from an Enron deal like that. It warrants external attention.

I think we need to take a look at the way IR has handled our stock price drop. I don't think our logistics
company" message has worked AT ALL. None of us even understand it, so I don't know how anyone else can-
not customers, not analysts, not the media.

We really have some good guys here at Enron too- Frevert, Sherriff, Kean, McConnell, Horton... they work hard
and follow the vision and values.

  I think the issue is that if we aren't ALL going to follow the V&V, then just get rid of them and quit touting them.
Be clear with what the rules are to move ahead in this company.
V In light of our published "values" respect Is one of the major challenges our management team should
Concentrate on. While I did not select the disparity between commercial and non-commercial as a tap 5
challenge, some of our lower level commercial managers (Director thru VP)could utilize a bit of humility.
  Those who have excelled and are excellent role models include Mark (revert, Dave Delainey, Mike McConnell
and Janet Dietrich.
  Our employee benefits implementors could use improvement, Its difficult to get the right answers at the right
time when one needs to make changes outside of open enrollment.
I My business unit has decided to allow only 50 hours of FWP; why Can't policies be unilateral across Enron
Corp, rather than by business unit? This was never an Issue in my 14 years in GPG.

  When I have asked about the long-term sabbaticals as described In "Work Perks" I was told, it too, would be
decided on by business unit.

  This is very disappointing to me.

  I feel that the Old Enron that was fun and exciting to work for, that I was proud to work for, has gone away.
I must say that I was jubilant uron hearing of Mr.Lay's return to CEO. I am also very impressed with the
selection of Mark Frevert; an excellent choice, in my opinion.

urn. rlnr, Seplewher 1)6, 11)11

EC2 000046317

PrguSi of R3

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r

  Mark Haedicke
Response

  Because we've gotten so used to change, I fear many of us have stopped caring about the "big picture" of the
company. This causes us to lose our sense of direction. I like it when we are told about the company's plans
and strategies.

I The work atmosphere In many departments make employees feet Isolated. I'm a legal specialist (paralegal) In
EWS Legal, and even though our department is fairly small, I don't know more than half of the people in It.
I Mow, legal specialists were just "un-invited" to the EWS Legal Conference due to cost reasons, we were told. 1
feel diminished and less Important (and thus more isolated), since all legal specialists heretofore have been
Included In these types of offsite meetings. -

A regrettable situation In EWS Legal is that many well-qualified and highly regarded administrative assistants,
including my own, have been "run-off' by the group's administrative coordinator. 1 believe that nobody speaks
up because the coordinator is Mark Haedicke's assistant, so people figure he must want things this way. As a
consequence, the (Enron) experience base of the administrative assistants is not very deep, and morale is low.
This has affected a large portion of our group because there's little "esprit de corps."

FC2 000046318

T1,ursd?P. September 075. 2#111

Page32of88

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Mark Koenig

Response
 I don't think we have really had a forum for employees to share their ideas with management an different topics-
  like the committees we had at one time. Cindy Olson was always listening to what employees are saying and
asking people to serve on committees to enhance change. We haven't done much of this lately.

I don't think we really embrace the vision and values at Enron - we talk a great game, but we don't walk the
walk. We reward and promote people based on the risks they take and the money they make for Enron, but we
consistently promote people to high levels within Enron who treat others like trash. Several of them are on the
management committee- Whalley, Kitchen, Koenig (& Rieker), Lavorato, Shankman. it really sends a loud and
clear signal to the rest of us. It Is not that the aforementioned aren't extremly smart, talented and great for this
company, but they aren't the "whole package". Ken Lay has never treated any employee disrespectfully, but he
continues to promote people who do. I think this says something to everyone about how differently this
company will be run following his departure.

  I also question many of our business ethics and it makes it very hard to work for this company and defend us to
others. I think we play too much in the gray areas. I don't think we are wrong In the California situation, but It
certainly makes me wonder what 1 don't know. 1 can't defend us when I know we pride ourselves on bending
the rules to meet our needs. I question Fastow and the LJM deal. I realize that it is legal, but I think it walks an
ethical One when out CFO personally profits from an Enron deal like that It warrants external attention.

  I think we need to take a took at the way IR has handled our stock price drop. I don't think our "logistics
company" message has worked AT ALL. None of us even understand It, so I don't know how anyone else can-
not customers, not analysts, not the media.

  We really have some good guys here at Enron too- Frevert, Sherriff, Kean, McConnell, Horton... they work hard
and follow the vision and values.

  i think the issue is that if we aren't ALL going to follow the V&V, then just get rid of them and quit touting them.
Be clear with what the rules are to move ahead in this company.
  The hardest thing for me about working for EBS was the ability to respect that Enron is a Fortune 100 company,
when I saw so much money being wasted on a daily basis. EBS did not set the standard correctly when they
started hiring people and the result was a tot of overpaid, underqualified people doing nothing but spending
Enron's money on travel, food and entertainment. I have never been at a company whoa spending was so out
of control. The other thing that really bothered me was the lack of respect other Enron entities gave to EBS. I
was in charge of making sure Enron's Analyst Conference was webcast and was told on that day, when we
were having network difficulties, that there were people at Enron that hoped EBS would fail. Even if that Is the
case, I don't think it was appropriate to be told to me. On that same day when we were having network issues, I
told Ken Rice and Kevin Hannon that Mark Koenig had been very upset at about 5 am and that I just wanted to
let them know what happened so they would be prepared. The response I received from Mr. Rice was, I don't
care about the Analyst Conference, I just want the CNN test to work later today. Again, I don't believe that
anything like that should ever come out of a CEO's mouth, but then again it is the same CEO who drank too
much at the Portland Christmas party and told me I was beautiful. These incidents reflect very negatively on
me, even though t did enjoy what I did and my co-workers. I am just shocked that these type of things aren't
better controlled.

Th,i, dal.. Selirnther 116, 2.901

  E C2 000046319
Pager 4.r of 88

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=============

r
  Mike McConnell
Response

t  In light of our published "values" respect is one of the major challenges our management team should
concentrate on. While I did not select the disparity between commercial and non-commercial as a top 5
challenge, some of our lower level commercial managers (Director thru VP)could utilize a bit of humility.
I Those who have excelled and are excellent role models include Mark Frevert, Dave Delainey, Mike McConnell
and Janet Dietrich.
  Our employee benefits Implementors could use improvement, it's difficult to get the right answers at the right
I time when one needs to make changes outside of open enrollment.
  I don't think we have really had a forum for employees to share their ideas with management on different topics-
like the committees we had at one time. Cindy Olson was always listening to what employees are saying and
I asking people to serve on committees to enhance change. We haven't done much of this lately.

  1 don't think we really embrace the vision and values at Enron - we talk a great game, but we don't walk the
walk. We reward and promote people based on the risks they take and the money they make for Enron, but we
I consistently promote people to high levels within Enron who treat others like trash. Several of them are on the
  management committee- Whailey, Kitchen, Koenig (& Rieker), Lavorato, Shankman. It really sends a loud and
clear signal to the rest of us. It is not that the aforementioned aren't extremly smart, talented and great for this
I company, but they aren't the "whole package". Ken Lay has never treated any employee disrespectfully, but he
continues to promote people who do. I think this says something to everyone about how differently this
  company will be run following his departure.

  I also question many of our business ethics and it makes it very hard to work for this company and defend us to
others. I think we play too much in the gray areas. I don't think we are wrong in the California situation, but it
certainly makes me wonder what I don't know. I can't defend us when I know we pride ourselves on bending
the rules to meet our needs. I question Fastow and the LJM deal. I realize that it Is legal, but I think It walks an
ethical line when out CFO personally profits from an Enron deal like that. It warrants external attention.

  i think we need to take a look at the way IR has handled our stock price drop. I don't think our "logistics
company" message has worked AT ALL. None of us even understand it, so t don't know how anyone else can-
not customers, not analysts, not the media.

  We really have some good guys here at Enron too- Frevert, Sheriff. Kean, McConnell, Horton... they work hard
and follow the vision and values.

  I think the Issue is that if we aren't ALL going to follow the V&V, then just get rid of them and quit touting them.
Be clear with what the rules are to move ahead in this company.

EC2 000046320

Thoralnr, Srplensher 06. 2001

Page 84 of 88

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=============

0

tck Ca usey

ponse

1) l hope this is really anonymous. We are having huge problems with ibuyit payables or ipayit as it is called
today. These problems are not user errors as Rick Causey said they were. We have met many times with the
ipaylt chain of command and have showed them huge errors. This system has taken a process that my
assistant used to spend two to three hours a week doing into a system that takes twenty or more hours if we do
it right. What 1 mean by doing it right is checking out Invoices before we code and approve one to make sure it
has not already been paid. The system Is very slow to use just to pull up the invoice to view it can take between
15 and 45 seconds, when you have 60 or 70 Invoices a week this alone adds an hours time to everyone that
has to touch this many Invoices.
2) Global Strategic Sourcing Is a good idea but they have way too many people and too much time on their
hands, they are all working hard to justify their existence (we all should) but they are playing a numbers game
with the savings they claim. Two examples of this are:
#1 They negotiate a deal with a vendor this year and it saves us I million dollars, the next year we double our
business with that company. They have done nothing on the contract but this year they claim another 2 million
in savings based on what they did last year. Could they rest of us base our performance on what we did last
year?
#2 They meet with a business unit to negotiate a price on a product we need. They ask for information on the
deal. We give them budget numbers, let's say I million dollars, we give them retail price and our present Enron
discount price. They come In and negotiate a price 2% below our present Enron price which is great, but when
they want you to sign their deal sheet at the end they will try to claim the saving from the retail numbers or even !
the budget number. They should be claiming the delta between the present Enron price and the final
negotiated price. This is the real value they have added, not some inflated number.

EC2 000046321

Ttprrarrm. ,S,.nh'ntbrr 06. 2001

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e

I

R
w

Stan Horton

Response
* Some people in senior management positions may be good at the deal, but have little leadership ability (e.g.,
  Jim Fatloh, Greg Whalley, Kevin Hannon) while the true leaders go unnoticed (e.g.. Stan Horton, Rob Walls,
Mary Joyce).
* Now let me tell you the major issue I have. Stan Horton In the process of saving dollars is allowing Phil Lowery
to run our pipline company to ruin. We are not allowed a budget that enables us to properly run this pipeline,
We ask for OEM monies to paint and treat corroded engines and pipe. Is it there? NO! They say, "take it out of
your existing O&M budget which is already so flat that it won't meet our day to day operational requirements.
We ask for monies to mow our right of way so that we do not have 40 foot trees growing over our pipe. Do they
give us the money? No again! 'Take it out of your existing O&M budget" they say, knowing It hardly will support
our falling forty year old equipment. The real sad part of this story is that people like Phil Lowery make promises
to turn back 33 million to Stan so that he (Phil) looks good and prospers; you know personal gain without regard
to others. Well we would like our operations to look good too and were not expecting great big personal
bonuses in return. We just want a safe place to work, one that looks good, and something we can be proud of
and tell others good things about Oh, one more thing. Relieving the stress of trying to manage a billion dollar
operation on a hundred dollar budget would help feelings around here. This Is my opinion and I know that those
in control will only say that I don't have all the facts. Well this Is true, but this one fact I do know, we better get
more monies to operate this pipe or we are In for hard times. Thank You for your time Mr. Lay and may we all
genuinely make this a better place to live and work. From a concerned Florida Gas Transmission Company
employee.
  PS. My intentions were not to do harm to Mr.Horton or Mr. Lowery because I do realize they don't have all the
facts either.
  1 don't think we have really had a forum for employees to share their ideas with management on different topics-
like the committees we had at one time. Cindy Olson was always listening to what employees are saying and
asking people to serve on committees to enhance change. We haven't done much of this lately.

I don't think we really embrace the vision and values at Enron - we talk a great game, but we don't walk the
walk. We reward and promote people based an the risks they take and the money they make for Enron, but we
consistently promote people to high levels within Enron who treat others like trash. Several of them are on the
management committee- Whalley, Kitchen, Koenig (& Rieker), Lavorato, Shankman. It really sends a loud and
clear signal to the rest of us. It is not that the aforementioned aren't extremly smart, talented and great for this
company, but they aren't the "whole package". Ken Lay has never treated any employee disrespectfully, but he
continues to promote people who do. I think this says something to everyone about how differently this
company will be run following his departure.

I also question many of our business ethics and it makes it very hard to work for this company and defend us to
others. I think we play too much In the gray areas. I don't think we are wrong in the California situation, but it
certainly makes me wonder what I don't know. I can't defend us when I know we pride ourselves on bending
the rules to meet our needs. I question Fastow and the LJM deal. I realize that it is legal, but I think it walks an
ethical line when out CFO personally profits from an Enron deal like that. It warrants external attention.

think we need to take a took at the way IR has handled our stock price drop, I don't think our "logistics
company" message has worked AT ALL. None of us even understand It, so I don't know how anyone else can-
not customers, not analysts, not the media.

We really have some ood guys here at Enron too- Frevert, Sherriff, Kean, McConnell, Horton... they work hard
and follow the vision 4nd values.

1 think the issue is that If we aren't ALL going to follow the V&V, then just get rid of them and quit touting them.
Be clear with what the rules are to move ahead In this company.

  Upper management needs to publicly recognize those employees who have done something significant for the
company. Maybe quarterly, recognize 1 or 2 individuals from the various companies who have gone above and
beyond to either reduce costs, help a customer, or make Enron money. If Stan Horton called me and said, hey,
I like your project, keep up the good work, I'd probably fall off my chair.

nurrdi, '..Si ,ft'n,h r afi, 3/1/11 EC2 000046322 P ge m a f.78

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1
j
Stan Horton
i
f
Response

  This may sound crazy but when I heard that Ken Lay was leaving I was so sad It was like losing a Father, after
asking around and.talking with others they felt the same way. During our all employee meeting as I sit there
observing all the tears that came to peoples eyes when Mr. Lay announced he was back[!!

  I do want to thank the redeployment team effort and I thank God and the people I mentioned above but if it
wasn't for Stan Horton and H.R. I may not be here today. I think there could be some improvements to
I redeployment

  l believe the single greatest challenge faced by Enron today is In operating profitable businesses. We have an
outstanding team of originators who are highly incanted to create and sell our Ideas. However, we have a
great deal of difficulty in profitably delivering on those Ideas. The ideas are excellent, the opportunities to profit
from them are outstanding, the execution has been less than stellar. Examples Include Enron Energy Services,
Azurix, and Broadband. There have been great rewards for those creating the Ideas and initiating these
businesses and those same Individuals, in some cases, have been given the opportunity to run the business
they created. Unfortunately, the skills necessary to create and sell the idea are very different from those
necessary to manage and grow an operating business. I strongly believe in the Enron approach to creating
new and innovative businesses, to driving greater efficiencies into markets and to monetizing businesses and
assets when doing so provides the greatest value to Enron. At the same time I believe that greater value could
be realized from those assets If they were better managed. The rewards at Enron are greater In origination
than in managing an operation. Perhaps a greater balance could be struck between rewarding origination and
operations. There may be value in creating a strong team of general managers who demonstrate skill in
delivering value to the enterprise through the management and growth of new businesses. Stan Horton stands
out in my mind as an example of an Enron business leader who has demonstrated the ability to manage
operations with excellence. While we have the best traders and originators in business today, the skills of
those individuals do not necessarily translate into great general management skill needed to grow a new
business. I appreciate the opportunity to provide my thoughts. I believe Enron has the opportunity to
capitalize on our strengths, to improve on our weaknesses and to restore Investor confidence as we work
through this time of change. Thanks for your leadership.

+ 1. Enron needs to lower the cost of doing business. EES and International, in particular, have been notorious
in the past for unchecked spending. one immediate way to save Enron several million dollars per year of
expense would be to put the operations of the ESS fiber lines under Stan Horton. Another guggestion would
be to benchmark Managing Directors against their counterparts to determine if the MD's are focused on cost
effective management and then include the results In the PRC process. 2. Originators In EW5 should not be
leading projects to build jurisdictional facitties, Originators typically do not understand jurisdictional processes
and are unwilling to work within the parameters to make a project successful. After giving Enron a bad
reputation with the general public, regualtors or special interest groups, an originator can move on to another
deal, however for the rest of the organization who manage those relationships on an ongoing basis, the job has
been made much more difficult and Enron assets and future development opportunities have been put in
jeopardy because Enron has fallen out of favor or received a black mark on its record.

EC2 000046323

Thurtdor. Saplemher 06, mol

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Steve Kean

Response
 YYY~ Y~.r. ~Y/ Y~Yi~~~~Y rill P/ rY.Y~I~~ YI~M~r ~~IAl11~AY~YY~Y~~AiIi~lY~l ~/~YYrI

  There needs to be a better work/life balance. For example, i want to go on vacation and not feel compelled to
check voicemail, email or take my call phone. The downside about this job is that it Is all-consuming -- I work
nights, weekends, vacations. There is never en Enron-free break. This is a surefire recipe for burnout - and
resentment.

I do not have complete confidence in upper management -- t truly believe that Jeff Skiliing's resignation left us
with an enormous void - we do not have a strong "second string" management team, with the exception of
Steve Kean. It would help externally if Ken Lay made a commitment to stay for a set period of time - f.e. he will
remain as chairman and CEO for at least two or three years. At this point, If Ken left, I would leave, and our
stock would plummet

I am concerned with our ethics and Integrity. While I believe that we are always within the bounds of the law, I
think we straddle the line consistently. An example of this Is LJM -- while there may not be anything Illegal, the
appearance that our CFO personally profdted - and that the board had knowledge of the situation - could send
our stock Into a tailspin. The "Lavo" situation In Canada is another example where we were within the bounds
of the law, but had the appearance of impropriety. Analysts and shareholders do not trust Enron to provide the
"straight story." I do not have confidence In our investor relations team.

I am also concerned that credit Is not given to good managers, They are not held accountable for providing
feedback, and their management abilities are not taken into account in the PRC. The only emphasis is on
results -- not on interpersonal or management skills.

The stock price is the single most important issue. Morale Is low because the stock price is so low.

  I don't think we have really had a forum for employees to share their Ideas with management on different topics-
like the committees we had at one time. Cindy Olson was always listening to what employees are saying and
asking people to serve on committees to enhance change. We haven't done much of this lately.

I don't think we really embrace the vision and values at Enron - we talk a great game, but we don't walk the
walk. We reward and promote people based on the risks they take and the money they make for Enron, but we
consistently promote people to high levels within Enron who treat others like trash. Several of them are on the
management committee- Whalley, Kitchen, Koenig (& Rieker), Lavorato, Shankman. It really sends a loud and
clear signal to the rest of us. It is not that the aforementioned aren't extremly smart, talented and great for this
company, but they aren't the "whole package". Ken Lay-has never treated any employee disrespectfully, but he
continues to promote people who do. i think this says something to everyone about how differently this
company will be run following his departure.

I also question many of our business ethics and It makes it very hard to work for this company and defend us to
others. I think we play too much In the gray areas. I don't think we are wrong In the California situation, but it
certainly makes me wonder what I don't know. I can't defend us when I know we pride ourselves on bending
the rules to meet our needs. I question Fastow and the LJM deal. I realize that It is legal, but I think it walks an
ethical line when out CFO personally profits from an Enron deal like that. It warrants external attention.

I think we need to take a look at the way IR has handled our stock price drop. I don't think our "logistics
company" message has worked AT ALL. None of us even understand it, so I don't know how anyone else can-
not customers, not analysts, not the media.

We realty have some lJood guys here at Enron too- Revert. Shertiff, Kean, McConnell. Horton... they work hard
and follow the vision and values.

I think the issue is that if we aren't ALL going to follow the V&V, then just get rid of them and quit touting them.
Be clear with what the rules are to move ahead in this company.

LC2 000046324

Thur 4fa,V, Sepren,har Sri, 2001

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