IN: A SUGGESTION FOR POSSIBLE SURVIVAL Dear Mr. Lay, A suggestion that may keep the "wolf from the door". The Enron corporate structure is already very compartmentalized, with many separate companies defining the overall business structure. My suggestion would be to take this concept even further. Reorganize (before bankruptcy) and allow Enron Corp. to be only a holding company with each of its current departmental companies becoming independent "profit center" companies. These new corporations could negotiate independently with creditors, and even authorize the exchanging of their equity for additional credit or refinancing. (Private placements of equity, with a stated goal of bringing these "profit center" companies public, should interest creditors and investment banks.) The creditors could get their assurances. Current stockholders keep their investments in the holding company (with some perceived dilution); And long-term, perhaps, Enron emerges as a mini conglomerate like Tyco. Best wishes, May the Lord be with you and yours, Kerry J Hodgkinson 9011 Hartzog Street Orange, Texas 77632

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OUT: A SUGGESTION FOR POSSIBLE SURVIVAL

IN: Reminder The Enron Oral History Project Continues... "Using History to Help Enron Become the World's Leading Company" How can an understanding of strategic choices, regulatory change and corporate culture help Enron achieve its vision? Speaker: Joseph Pratt, Cullen Professor of History and Business, University of Houston and Co-Director, Enron Oral History Project Thursday, June 7 11:30 a.m. to 12:30 p.m. EB 5C2 To Make a Reservation, Call 3-1941 and Select Option 1 Lunch will not be provided, but you are welcome to bring your own. Please inform us ahead of time if you need special accommodations to participate in this meeting. Call 3-9390.

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OUT: Reminder

IN: Rosalee: Could you please print out the following two documents for Mr. Lay? One is an excel sheet showing the summary of the results of our analyis of the core/noncore market structure that Mr. Lay has been discussing with leaders in California. The other is a word document explaining the summary tables contents. If you have any questions, just let me know. Maureen, can you print out for Steve, too? Thanks very much for your help. Best,

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OUT: Summary of Core/Noncore Analysis

IN: I'm working on the agreement, but since it is taking longer than I had hope= d,=20 I wanted to send you my understanding of the basic premise for your input. = =20 I'll continue to refine/integrate this into a real document while you revie= w=20 the important stuff: Hub Services.=20 =01&Hub Services=018 include (a) transactions entered into by MEH or the PG= L HUB=20 which are subject to Peoples' Hub FERC operating statement, and (b) all=20 physical transactions which require the use of the Manlove or Mohammad fiel= ds=20 (also known as =01&exchange=018 or =01&enhanced hub=018 services).=20 The profit [what is profit? Obviously before tax, but otherwise a GAAP=20 standard?] from Hub Services shall be split as follows: ? For transactions entered into between February 15, 2000 through September= =20 30, 2000, the profit shall be equally shared. ? For transactions entered into from October 1, 2000 to September 30, 2001= =20 (and successive years until September 30, 2004), Peoples will receive the= =20 first $4 million in profit (cumulative, not annual), and will Enron receive= =20 the next $1million in profit. For any profit exceeding $5 million, Peoples= =20 and Enron will share any on a 50/50 basis. This arrangement excludes all agency fees paid to MEH. These fees will be= =20 shared 50/50 from the inception.=20 All internal costs incurred in the normal course of business will be borne = by=20 the party incurring same. All third party costs will be shared equally, and= =20 require MEH board approval. PERC Peaking Agreement PERC has contracts with PGL and with NICOR contracts relating to the=20 ethane/propane peaking facility. The two existing contracts pay a total of= =20 $2million (approximate or exact) in demand charges annually. Any profit=20 exceeding $2 million in a year will be shared by Peoples and Enron on a 50/= 50=20 basis. If either of these contracts is extended in any form other than the current= =20 form, then Peoples and Enron share the demand charge and the profit on a=20 50/50 basis. Other Transactions=20 Peoples and Enron will split the profit from any transactions other than=20 those described above on a 50/50 basis.=20 Kay

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OUT:
Transfer price agreement