IN: Eric, This is to update you on the current situation with the OSTRIP function in Exotica. After some lengthy analysis of the function, its inputs and the documentation associated with it, it was brought to our attention in the Research Group that the OSTRIP function was being utilized in different manners by different people within Enron. In order to remedy this situation, the documentation of Exotica was revised and more details were added, so as to make explicitly clear the distinctions between the fixed price options and forward start options. (You will find attached a copy of the most recent version of the Exotica documentation.) In addition to discussions with Santiago Garcia in structuring, it was seen to be important to ensure that those responsible for booking the options in ERMS (specifically, Jeremy Wong) be updated on the changes. By pure coincidence, the two ways that inputs were made for fixed price options gave the same values for the premiums. However, one methodology is really incorrect as far as the documentation is concerned, and the attempt has been made to rectify this. The forward start option pricing has not changed in any way. I would like to arrange a meeting tomorrow afternoon (Thursday) between all those parties concerned to ensure uniformity of pricing across the board. If you are available, I would appreciate it if we could meet at around 4:00 PM. Regards,

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OUT: OSTRIP Function in Exotica

IN: Due to the Bankruptcy Filing on December 2, 2001, a decision was made to discontinue the flexperq allowance. This decision was made after the December 14 payroll run. You will receive your allowance of $1,218.75 on your December 14 paycheck; however, Payroll will reduce your 12/31 paycheck for the same amount. Also, please note that executive physicals will no longer be offered or related expenses covered by Enron. Thank you!

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OUT: Flexperq Allowance

IN: The first of these two documents contains the key terms of the GE contract for the ESA deal. It was prepared by GE. Your comments would be appreciated. Kay

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OUT: ESA Electrobolt Exhibits

IN: Tom, I believe you are correct regarding the voice mail question you left me. Anything you trade on that might be in a Schwabb account etc will more than likely need to be rolled over to Paine Webber. Mutual Funds will probably not be an issue. Like I said, I don't have too much information on that right now however I just wanted to give you guys a heads up that we will have to eventually make those changes. Thanks, Tony

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OUT:
Paine Webber Questions