As our existing businesses grow and new businesses are created, ease of 
movement and development of our top talent becomes essential to our success.  
As you heard at the Management Conference all officers will be titled, 
reviewed, promoted, and compensated according to a more standard set of 
guidelines.  The process recognizes the intrinsic value of each officer, 
rather than tying that individual to the value of their specific job or 
reporting relationship.

Officer titling has been standardized throughout Enron.  There are four 
levels of officers: members of the Enron Office of the Chairman make up Level 
4.  Level 3 includes all other members of the Enron Executive Committee.  
Level 2 is made up of managing directors, including company presidents and 
some senior vice presidents.  Level 1 are vice presidents and some senior 
vice presidents with grandfathered titles.

This year a common evaluation process is being implemented for Level 1 and 
Level 2 officers.  Officers will be evaluated by a committee, through a 
process referred to as the Performance Review Committee (PRC), utilizing a 
standard set of performance criteria and performance ratings.  Performance 
committee reviews will occur twice a year ) in July for feedback purposes and 
at year-end for feedback as well as bonus and total compensation 
considerations.  The Executive Committee will handle the PRC for all Level 2 
officers. Review of Level 1 officers will occur at the business-unit level 
first with the results &cross calibrated8 by the Executive Committee and a 
group of approximately sixteen managing directors.

The goals of the PRC process is to insure a consistent standard for our 
overall pool of executive talent and to provide a tool to more effectively 
utilize talent throughout the organization.  To further promote consistency 
the Executive Committee will consider all promotions in January of each 
year.  Exceptions, internally or externally, will be infrequent.

The individual,s performance evaluation will be the starting point for all 
compensation decisions.  Compensation includes base pay, bonus and long-term 
awards.  A long-term program that replaces individual or business unit plans 
has been approved and will be communicated to individuals before bonus 
payments are made.

In addition to the Level 1 and Level 2 reviews, business unit, global and 
corporate cross-functional PRC reviews for directors, senior directors and 
general managers have started.  This year-end process will be utilized as a 
benchmark to determine how we further refine the evaluation process at this 
level in the future.

If you should have any questions about the process, please direct them to 
your Human Resources Business Unit Leads per the following:

Mary Ann Long (GPG) x36810    David Oxley (ENA/EEL/Global Trading) X33557
Ray Bennett (EES) X37039    Robert Jones (Global Technology/Global 
Finance/Global
Gwen Petteway (Corp) X37351      Asset Operations/Global Engineering & 
Construction) X35810
Janie Bonnard (Caribbean/Middle East/   Scott Gilchrist (Asia 
Pacific/Africa/China) X67081
  LNG) X68202      Gerry Chatham (EGEP) X35141
Miguel Padron (ESA) X66552    Marla Barnard (ECI) X58158
Ranen Sengupta (India) X67967   


cc: Enron Executive Committee Members   


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