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I have received questions about interpreting the ratio. Let me use yesterday's closing price. The merger probability is derived from a two scenario test, merger closure or merger non closure (there is also a competing offer scenario in reality). Let's use a closing DYN price of $46.20 yesterday (note I had a typo), at the exchange ratio, (not taking into account timing and dividends), this yields a merged ENE price of $12.40 ($46.20 * .2685). ENE closed at $10.00 yesterday. Thus if the market thought there was complete certainty of merger, the prices would converge at $12.40. Now comes the artful part, the non merger ENE price. I included another tab (Merger) to sensitize this. Say we pick an ENE price with no merger of $4.00. Looking at a deterministic probability, one can look at the distance (difference) in dollars to calculate the probability. For instance: ENE merged 12.40 ENE close 14-Nov 10.00 ENE no merger 4.00 Probability of merger = (1-((12.40-10.00) / (12.40 - 4.00))) or 71.4%. Said another way, there is a 71.4% chance of being worth $12.40 and a 28.6% chance of being worth $4.00, which yields a weighted price of $10.00 ($12.40 * 71.4%)+($4.00 * 28.6%). I also included a $1 distressed ENE price and a $7 previously observed low end ENE price as scenarios. Regards,

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OUT: Exchange ratio prices and probability
QUESTION: In order to prepare a paper for my graduate class on Leadership, I recently had an opportunity to visit with Stan Horton. Stan provided some wonderful insight on his leadership skills and gave you as an example of a superb leader. He suggested that I also speak with about your views on leadership. Some questions that would be of interest would be what events you think coelesced to bring you to the chairmanship of Enron; what developmental process you knowingly (or unknowingly) went through in your early years and what challenges have you encountered that made a signficant change in your career. If you would have fifteen minutes or so and would be amenable, I would much appreciate visiting with you in the next two-three weeks. If you wish, I could provide you questions in advance to maximize your time. Thank you for considering this request.
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ANS: Interview
Hi there, I am meeting with Ben tomorrow to discuss NWestern. I'm fairly confident that he will be willing to extend the letter agreement, but he hasn't called me back today to confirm. Ms. Kahn and I have exchanged voice mail. Could one of you return her call for me? I'm tied up. You might get an idea on some times tomorrow for a call. I'm booked until around 130 for anything which would last more than a few minutes. I'll check with Ben. Thank you,
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answer: Northwestern
Paul, FYI, you were invited to our off-site because we felt that our businesses were so linked together and that we could all get on the same page with regard to updates, vision and relationship building. We also invited Joe and Thor as the only other non-EGM people. If you can make it would be great but we do know how difficult it is to make it over. I did hear your California request and it could happen. We haven't found the right place yet. California is experiencing serious blackouts and it could be difficult. We'll be in touch. Cheers,
Answer: EGM offsite
QUESTION: Attached is the latest draft of a memo outlining the changes to severance, vacation, et al. While I know that we don't have a decision on severance, Michelle Cash and I have discussed most likely only being able to include a link to the restated plan. If we do that, any language in the memo related to severance will be very generic. I've also added information about the suspension of the Educational Assistance Program. (Q: Rick, is the cut off date Nov. 2002, or should it be 2001?) Let me know your thoughts when possible. We'd like to send this as soon as we get word from David that a plan has been selected. Michelle, when we know which plan is selected, we'd still like to have some summary language/talking points we can provide HR generalists and supervisors to help them briefly explain the plan as they are talking with employees.
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ANS:
REVISED - Policy Changes