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June 2000

Computers for All Project. June 2000. Purpose. Provide Enron employees at-home Internet devices, connection, employee-centric portal and support to narrow the digital divide. With this investment, the returns include: broadband commercial value improved employee productivity

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June 2000

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  1. Computers for All Project June 2000 Confidential & Proprietary

  2. Purpose • Provide Enron employees at-home Internet devices, connection, employee-centric portal and support to narrow the digital divide. • With this investment, the returns include: • broadband commercial value • improved employee productivity • improved employee communications • enhanced training medium, accessibility Confidential & Proprietary

  3. Agreement 3 Year Value Program Offering The Process ENhome Election Agreement Vendor Website for Ordering Internet Device Enron Intranet $1,260 Connectivity Portal $1,620 Support Over a three year period, Enron will provide “ENhome $” in the amount of $2,880 ($1,260 cost of hardware, $1,620 cost of connectivity) to each employee to lease/purchase hardware, internet service, employee centric portal and technical support. Any equipment or service rendered above the value of the “ENhome $” will be out-of-pocket costs to employees. This allows employees to upgrade as necessary. If proposed tax legislation doesn’t pass, employees could be taxed for the value of this benefit. Employee will sign an election agreement to indemnify the company as well as secure the assets while in the employee’s possession. To streamline administrative efforts, the election process will take place monthly. Confidential & Proprietary

  4. Program Offerings • Connectivity • DSL (preferred) • Cable • 56K • Employee Centric Portal • Employee communications • E-Learning Portal • Benefits Election • Financial Planning tools • Work balance communications • Employee Self-service tools • Career Opportunities • Internet Device • Base Model (Desktop) • Pentium III 600MGHz Processor • 128 RAM • 10 GB Hard Drive • 17” Monitor • 56K Modem • CD ROM • Upgrades if necessary • Support • Consolidated technical support provided to employees • Enron Security • Enron will not monitor internet usage if outside of firewall • Security will be considered for entry into Enron domains • Remove “Enron” from IP address for personal internet usage • Pre-loaded Software • Internet Service Provider • Windows 2000 • Small Business Edition (Microsoft Word, Excel, Outlook, Publisher and small business tools • Company Subsidy • Company subsidy is intended to be used only for the ENhome program and may not be transferred or exchanged for cash or other benefits. Confidential & Proprietary

  5. Domestic Only Domestic and International 16,000 employees 22,000 employees Full Enron Subsidy of $1,260 Hardware or $35/month for 3 Years Partial HW Subsidy of $630 Hardware or $17.50/month for 3 Years Full Enron Subsidy of $1,260 Hardware or $35/month for 3 Years Partial HW Subsidy of $630 Hardware or $17.50/month for 3 Years $ Millions $ Millions Costs Hardware Lease Cost - Company Subsidy (1) Connectivity Cost - Company Subsidy (2) Web Development & Implementation (3) Increased Broadband Maintenance (4) ENhome Infrastructure Cost/Maintenance (5) Split Tunnel Equipment Cost (6) $ 6.72 8.64 0.33 0.43 0.50 2.67 $ 19.29 $ 3.36 8.64 0.33 0.43 0.50 2.67 $ 15.93 $ 9.24 11.88 0.33 0.43 0.50 3.67 $ 26.05 $ 4.62 11.88 0.33 0.43 0.50 3.67 $ 21.43 Cost Reductions Connectivity Savings (7) Laptop Savings (8) Internal PC Configuration Savings (9) $ 0.63 0.44 0.18 $ 1.25 $ 0.63 0.44 0.18 $ 1.25 $ 0.63 0.44 0.18 $ 1.25 $ 0.63 0.44 0.18 $ 1.25 Pre-Tax Costs $(18.04) $(14.68) $(24.80) $(20.18) Tax Deductions $ 7.72 $ 6.37 $ 10.42 $ 8.57 Tax Benefit $(10.33) $(28.65) $ (11.61) $(32.71) $ (8.31) $(23.70) $(14.38) $(39.51) After Tax Costs 3 Year NPV Benefits Employee Productivity Improvements Recruiting Benefit Increased Retention Enhanced Employee Communication Effectiveness Enhanced Training Effectiveness Enhanced Telework Flexibility/Real Estate Savings At-home Program Uniformity Savings Long Distance Connectivity Savings EBS Commercial Value Additional volume purchasing leverage (1) Represents company subsidy for hardware (2) Represents company subsidy for connectivity; International connectivity costs start 2001 (3) One Time Costs Depreciated over three years; International costs start 2001 (4) Represents additional equipment to handle the increased concurrent broadband volume coming through the Enron firewall (5) Costs of additional servers, routers, and the maintenance of this equipment (6) One Time Costs Depreciated over three years; Additional hardware to support dual connections (7)This savings eliminates double counting the At Home Program participants who already have some sort of Internet connection at home (ISDN - 400, DSL - 50, Analog - 500), a conservative estimate (8)Laptop savings come from the reduction of 100 laptops which saves $4,420 per laptop (9)The savings come from not having to administer and reconfigure existing At Home Program PCs Confidential & Proprietary

  6. Actual DSL Coverage US xDSL Lines Deployed: 1997-2002 Number of DSL 1997 1998 1999 2000 2001 2002 % of US households access ports Value of Market IDSL 0 0 0 100,000 200,000 600,000 1997 1500 HDSL 650,000 690,000 725,000 710,000 1,150,000 1,600,000 1998 0.2% ADSL 0 280,000 490,000 1,000,000 2,600,000 4,550,000 1999 0.4% 2000 1.4% Source: DSLReports (http://www. dslreports .com/ clec ) 2001 2.1% >1 million Technology Forecast 2000, PriceWaterhouse 2002 3.4% 3.1 million $3.5 billion Source: Jupiter Communications Broadband Connection Coverage • To provide the true broadband experience, the ENhome program intends to offer employees the highest speed connections available in their area: • Of the 16,000 domestic program participants: • 60% will qualify for DSL connections • 15% will qualify for broadband access via cable connections • 10% will qualify for ISDN connections • 25% will receive standard dial-up service • International connectivity is still an issue to be discussed Confidential & Proprietary

  7. # of Employees 1,000+ 500-999 100-499 50-99 30-49 Note: Cities with less than 30 employees not shown Program Specifications Top 10 Home City Locations Excludes PGE • Proposed Eligibility • Domestic employees of wholly owned entities - regular full-time/part-time employees 15,678 • International employees of wholly owned entities - 5,011 • All levels, all length of service • One election per every 3 years • Seasonal employees are excluded (i.e., project employees, summer interns, etc.) State Count Country Houston* London Buenos Aires Mumbai/Bombay Portland Teeside Omaha Tehachapi Kingston TX OR NE CA USA UK Argentina India USA UK USA USA Jamaica 6,160 814 638 262 215 198 197 194 113 *Includes surrounding areas By Business Unit US Based Local Nationals Expats Total South America EES Asia & Africa CALME Europe ENA India GPG EBS PGE* Corp./Global TOTAL 73 2,388 57 159 - 1,694 53 2,641 824 2,721 5,068 15,678 49 3 25 15 37 4 14 - 3 - 59 209 2,721 - 317 227 1,397 84 56 - - - - 4,802 3,968 2,391 2,094 3,212 1,788 1,782 769 2,641 827 2,721 5,127 27,320 Phased-in Deployment Houston Remaining United States International 20,689 * To be discussed Confidential & Proprietary

  8. Timeline Jun 00 Jul 00 Aug 00 Sep 00 Oct 00 Nov 00 Dec 00 Jan 01 Feb 01 Mar 01 Apr 01 May 01 Design & Development (120 days) Pilot Period (90 days) Employee Sign-up Begins Deployment Begins Confidential & Proprietary

  9. Team Members • Sponsors • Cindy Olson Human Resources • Drew Lynch Human Resources • Steve Barth Enron Broadband Services • Mike McConnell Enron Net Works • Chris Holmes Enron Energy Services • Design Team • Cynthia Barrow Enron Benefits • Suzanne Brown Human Resources • Sharon Butcher Legal • Keith Dziadek Enron Net Works • Allen Hill Enron Broadband Services • Tony Jarrett Tax • Sherry Lessner Human Resources Info Systems • Susan Lopez Enron Net Works • Todd Neugebauer Enron Broadband Services • Randy Rice Enron Net Works • John Tollefsen Enron Net Works Confidential & Proprietary

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