Ken,

Thank you for your response to my email.  Whether you actually took the
time to respond or left it to one of your assistants, I hope you read my
comments/suggestions and truly understood them.

I have a few more comments and suggestions!

You are correct, overall stock values have declined and Enron has some
additional, unique issues related to its broadband and tele-com
business, payments from California and large investments in foreign
power plants, particularly India.  However, I cannot agree with your
comments (or Jeff's) about short sellers.

Short sellers, like jackals and vultures, exist for a reason and are an
important part of the whole financial community in which we live.  Short
sellers (and Jackals) are always looking for a deal(meal).  When they
find an unhealthy company (animal), they investigate, which oftens leads
to greater opportunities.  Enron, under Jeff's leadership, was not
healthy and the short sellers (jackals) found a wonderful opportunity.

Your current job, as was Jeff Skilling's, is to not provide the short
sellers (jackals) a reason or opportunity to focus on Enron's stock
price.

I applaud your recent commitment to the financial community to provde
better definition regarding Enron's profits.  Developing the necessary
internal mechanism for a largely transparent financial reporting system
will police itself and will ultimately reinforce confidence in Enron's
true value.

As an economist, you need to remember that the market value of any
company, in today's economy, is largely based on the market's perception
of its value. As you and I have so recently seen, the market very often
reacts on preception and only looks at intrinsic value as an
afterthought.  The financial community believes that if it quacks like a
duck and walks like a duck, then....just maybe it is a duck and not
really a racehorse

Enron executives need to be more cognizant of the negative impact their
excessive insider selling of shares has on market preception.  Using
stock options in lieu of salary is a very powerful incentive but it can
also backfire, especially if the proper safe guards are not in place.
Excessive insider trades can and should be limited.

Doing good things for the right reasons works! For some years now,
Northern's leadership has not done many good things for the right
reasons.  They are highly political and have developed a nasty habit of
not telling their upper management (Stan Horton) the truth, but what
Stan wants to hear.  They are doing many things, not because they
should, but becaue they can get away with them.  This activity works
only as long as their customers do not have a choice!  You want
examples-look at the non-Enron pipeline activity in Florida and the
upper midwest.

A solid domestic asset with a reasonable return is much better than the
possibility of much higher returns on assets in unstable, foreign
markets.  Enron is not smarter than the world and the world has
certainly demonstrated that it will not allow Enron to possess very much
control over world affairs.  Let's learn from our mistakes!

Selling difficult assets, such as in India, is good.  Selling profitable
assets, such as Portland General is bad just to make the bollom line
revenue. Warren Buffet, an Omaha native, does not look like such an old
fuddy-duddy as he once did, as recently as last year.  Strong, solid
fandamentals do count and ......

Short sellers will always be around and DOING GOOD THINGS FOR THE RIGHT
REASONS truly works!!!

Sincerely,

Neal Shaw

-----Original Message-----
From: Kenneth.Lay@enron.com [mailto:Kenneth.Lay@enron.com]
Sent: Monday, October 08, 2001 12:08 PM
To: Shaw, Neal
Subject: RE:


Any responses to this e-mail should be sent to kenneth.lay@enron.com

Neal:

I appreciate your recent e-mail concerning the decline in Enron's stock
price.  I share with you a very deep disappointment and frustration
about
this decline.

The decline has occurred for a number of reasons.  First, overall stock
values have declined significantly this year.  Enron's stock price has
declined more than averages primarily because of the total melt down in
the
broadband and tele-com business, difficulties with getting paid by the
California utilities and trouble with our large power plant and LNG
project
in India.  These problems have been further compounded by endless
misinformation and rumors, probably promulgated by short sellers.

In any event, I believe we our making progress in addressing these
various
problems.  I believe our stock price will increase over the short to
intermediate term.  With good success, we will be able to restore most
or
all of the value we lost this year over the not too distant future.

I appreciate your concerns and your suggestions and I will certainly do
everything I can to restore your confidence in Enron.

Sincerely,

Ken

    -----Original Message-----
   From:   "Shaw, Neal" <nshaw@usenergyservices.com>@ENRON

[mailto:IMCEANOTES-+22Shaw+2C+20Neal+22+20+3Cnshaw+40usenergyservices+2E
com+3E+40ENRON@ENRON.com]


   Sent:   Monday, September 24, 2001 1:47 PM
   To:     Ken.lay@enron.com
   Subject:

   Ken,

   My name is Neal Shaw and I worked for Northern Natural Gas Company in
   Midland, Minneapolis and Omaha in the Marketing Department of Enron's
   Gas Pipeline Group for almost 19 years.  I left the company is
December
   2000. I have a major portion of my investment portfolio in Enron
shares.

   I just read an interesting article titled Sizing up CEO aplomb under
   duress a major concern. by Jamie Lareau.  This article focused on how
to
   recognize CEO's and CEO candidates who were not up to the
requirements
   of their job and used Jeff Skilling as an example.  I have agreed
with
   views of this journalist for some time, especially since Jeff called
a
   fund manager an "asshole".  Publically calling someone is simply Not
   something any CEO should do and you and Enron's board should have
done
   something about Jeff then.

   My point is as follows:  Where were you and the Enron Board during
all
   this?  Why have you let people like Jeff Skilling and Stan Horton
   virtually destroy all growth prospects for the pipelines and totally
   concentrate on trying to make money without an asset base?  A lot of
   people believed Jeff's hype and many people have suffered!  Has Jeff
   suffered?.  I think not especially since he has left Enron with
millions
   of our dollars in his pocket.  Hopefully he will be able to afford
the
   time off to "find himself".

   Did you see the movie "Top Gun"?  Toward the end of the movie, Tom
   Cruise, otherwise know as Maverick, blamed himself for the loss of
his
   friend and simply disengaged from combat flying.  However, when
things
   got really rough, Maverick re-engaged the enemy and did what he was
   hired to do.

   Do you know where this is going?

   You are once again Enron's "Top Gun"!  The enemy is Enron's depressed
   stock price.  It is time for you to re-engage and live up to your
title
   of "Top Gun" and CEO!  I and the rest of Enron's stock holders need
you
   to repair the damage Jeff did and STOP the damage people like Stan
   Horton are currently doing and get Enron back in the mix.

   I sincerely hope you are still capable of doing a good job.  If you
are
   not, refund your salary since Jeff took over and step down.

   Sincerely,

   Neal Shaw
   U.S. Energy Services, Inc.
   Phone:  (402) 861-9520
   Cell:      (402) 578-8897
   Fax:      (402) 861-0461







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