This message is being sent on behalf of Robert Jones.

 
This letter confirms that you have been selected to participate in Enron's Liquidation Incentive Pool (LIP) program.  The LIP program is part of the company's court-approved retention plan and is specifically designed to recognize employee contributions toward the successful liquidation of non-core businesses from the Enron estate.

Your supervisor has shared with you a projected LIP participation target.  If you wish to confirm your projected target, feel free to contact your Human Resource representative.

The amount of money placed into and dispersed from the pool will be directly tied to the amount of cash collected by the estate.  Therefore, cash collections as well as individual contributions to the liquidation process could adjust, upward or downward, the actual LIP payouts to participating employees.

A Compensation Committee, made up of senior managers, will have discretion to recommend incentive amounts for participants in the liquidation pool after each $500 million is collected, also called a "collection milestone".  The Compensation Committee's recommendations must be approved by the members of the Office of the Chief Executive and the Management Committee and are subject to review by Ernst & Young and the court approved examiner for Enron North America.

Cash collections will be monitored through a weekly dashboard and you will be provided regular status updates.  Members of the Office of the Chief Executive, the Management Committee, and the Compensation Committee will validate the date a collection milestone is reached.

Fifty percent of your earned liquidation incentive for the collection period will be distributed as soon as practical after a milestone is reached.

The remaining 50 percent of the earned liquidation incentive or any quarterly advance payment is non-vested and deferred.  The length of the deferral period varies depending on the collection milestone in which it is earned.

Accrued and deferred liquidation will be paid at the earlier of the following events:
1.	upon specified dates related to incremental cash collections:
a.	12 months after each incremental $500 million milestone up to the first $3 billion,
b.	nine months after each incremental $500 million milestone up to the second $3 billion, and
c.	six months after each incremental $500 million milestone up to or beyond the third $3 billion.
2.	the employee is involuntarily terminated without cause, or
3.	Enron's reorganization is complete; or

If a collection milestone is not reached in a given quarter, but progress has been made, a quarterly advance may be allocated to you based on a quarterly floor amount of $1.85 million.  Fifty percent of a quarterly advance will be paid to you as soon as practical after May 31, August 31, November 30, 2002, and February 28, 2003.  The remaining 50 percent of an earned advance will be non-vested and deferred, and will offset against future incentive payments.

If you are an active employee on the validated milestone date, you are eligible to earn a LIP payment based on your contributions toward the milestone.  As a participant in the liquidation incentive pool, you are not eligible for severance benefits.

Your supervisor will communicate your actual incentive amount after a collection milestone is reached or at the end of the quarter and project targets for the next collection milestone or upcoming quarter.  These face-to-face meetings will be part of a broader performance assessment process designed to track individual accomplishments for the benefit of the employee, the company and the creditors' committee.

Thank you for your hard work and continued commitment to Enron.