Problem: BODY: I think we should get either you or Sara involved in this. Gary has requested a Houston lawyer help in establishing the business in London. Mark
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A: SUBJECT: Bond and Equity Trading in Europe

Problem: BODY: Holli: We need to talk about status. I spoke yesterday with three EWEB lawyers and Dick Varner. I have to comment back on the Schedule to the master agreement. EWEB has not yet reviewed the Credit Support Annex and needs to submit their proposed legal opinion. EWEB is reserving discussion of the confirmations pending resolution of the master agreement. Most important, however, is the EWEB legal opinion which will be limited by the capacity of EWEB's traders to enter into financial trades at any given point in time. EWEB is insisting that we assume the obligation of knowing whether an EWEB trader is authorized to act and how that EWEB trader is authorized to act under EWEB's trading policy because, under Oregon law (and the law of all states), financial trades executed by unauthorized persons (employed by governmental entities) are completely void. Your two trades (which began as physical deals and were transformed into financial deals) were authorized by EWEB's recent board resolution. However, you cannot rely fully on this resolution for future trades. Before you ever trade with EWEB again, you will not be able to rely upon your past relationship with an EWEB trader. You will first have to conduct some due diligence with respect to the EWEB trader and the EWEB trading policy. ENA has never agreed to this type of arrangement. Let's schedule a time to discuss the agreement further. Thanks. Sara
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A: SUBJECT: EWEB

Problem: BODY: Michelle, Can you and the comp team help us identify who has contractual bonus targets for performing at the top 25%, 33% or 50% of the PRC "criteria" or "performance scale". Obviously we have a number of contracts we entered into between Jun 99 and the beginning of the end of last year which have some sort of wording along the above lines in them. There are some critical questions I would like to get clarity on: If BU's and support functions simply stop at 10/80/10 in their PRC's how will we deal with these contracts? Presuming all commercial staff are also relative ranked for bonus purposes separately to the PRC, can we use this scale instead (where it will be easier to identify a to half or quartile performance). Do we need to ensure that BU's and Functions that have people with such wording do split their middle 80%. If so how should we do this? Do we need to amend those contracts to wording that is easier to interpret? What proof or disclosure will we need to those individuals with this wording? I have a PRC committee meeting Thurs and while I don't anticipate raising this issue in that forum, I'd like to know we are working on a solution. David
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A:
SUBJECT: Y/E PRC and Contractual Bonus Targets