OK. Would like to be more reassuring that their will be a pool and ordinarily recurring is thing that drives pool.
 -----Original Message-----
From: 	Butler, Pam  
Sent:	Tuesday, October 23, 2001 10:05 AM
To:	Joyce, Mary; Oxley, David; Pieper, Kalen; Cash, Michelle; Sullivan, Kriste
Subject:	FW: Q&A on Employment Agreements with Bonus/LTI Grants contingent on company meeting earnings targets


Just to clarify, for the annual incentive plan, the Board has discretion to make downward adjustments based on possible nonrecurring items or unordinary items.
 -----Original Message-----
From: 	Butler, Pam  
Sent:	Tuesday, October 23, 2001 9:48 AM
To:	Joyce, Mary; Oxley, David; Pieper, Kalen; Cash, Michelle; Sullivan, Kriste
Subject:	Q&A on Employment Agreements with Bonus/LTI Grants contingent on company meeting earnings targets

I've had a question from an employee who just signed an employment agreement that provides a grant of stock options in 2002 subject to "Enron meeting its earnings targets" and who wanted to know whether it was based on recurring or non-recurring earnings. 

The Enron Corp. Annual incentive plan specifically states that bonus funding is based on whether Enron meets after-tax recurring net income targets as determined by the Compensation Committee of the Board.  For long-term incentives, while we are not specific about this in any formal plan/program document, it is strongly recommended that the response to this question be:

"Enron's compensation programs have been established to reward employees for the Company's overall operating performance relative to pre-established annual performance measures including key financial goals.  In January of each year, the Board certifies the level to which the performance targets were attained for the prior fiscal (calendar) year and establishes targets for the upcoming year.  As such, Enron's compensation programs are discretionary in nature and the Board has the authority to consider unordinary or nonrecurring items events in determining whether awards are appropriate."

Let me know if you have any concerns.  Thanks.