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ENhome Internet Program: Empowering Enron Employees

Enron's confidential ENhome Internet program provides employees with at-home internet devices, connectivity, an employee-centric portal, and support. This investment improves productivity, communication, training, work balance, and employee tools, benefiting recruitment and retention.

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ENhome Internet Program: Empowering Enron Employees

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  1. or Computers for All Project Team June 2000 Confidential & Proprietary

  2. Purpose • Provide Enron employees at-home Internet devices, connection, employee-centric portal and support. • With this investment, the returns include: • improved employee productivity • improved employee communications worldwide and reduced costs, • enhanced training medium, accessibility and reduced costs, • improved telework flexibility and reduced associated costs, • improved work balance and wellness communication, • improved employee centric tools (benefits, 401K elections, etc.), • recruiting and retention benefits 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, effective October 1, 2000, Enron will provide “ENhome $” in the amount of $2,700 ($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. 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 • 56K • Cable • DSL (preferred) • 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 • Notebook • Printer • Additional peripherals • Support • Technical support one-stop shop will be provided to employees • Enron Security • Security will be considered for entry into Enron domains • Remove “Enron” from IP address for personal internet usage • Enron will not monitor internet usage if outside of firewall • Pre-loaded Software • Internet Service Provider • Windows 2000 • Small Business Edition (Microsoft Word, Excel, Outlook, Publisher and small business tools • Citrix server • E-fax software • Company subsidy are not transferable for cash or other benefit, outside of this offering 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) Misc. Administrative Cost ENhome Infrastructure Cost/Maintenance (4) $ 6.72 8.64 0.20 0.05 0.30 $ 15.91 $ 3.36 8.64 0.20 0.05 0.30 $ 12.55 $ 9.24 8.64 0.20 0.50 0.30 $ 21.67 $ 4.62 11.88 0.20 0.05 0.30 $ 17.05 Cost Reductions Connectivity Savings (5) Laptop Savings (6) Internal PC Configuration Savings (7) $ 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 $ (14.66) $( 11.30) $( 20.42) $( 15.80) Taxes $ 6.14 $ 4.80 $ 8.45 $ 6.60 Tax Benefit (40% of hardware & connectivity only) NPV 3 Years 1 Year $(20.88) $ (6.96) $(15.94) $ (5.31) $(29.04) $ (9.68) $(22.24) $ (7.41) Benefits Employee Productivity Improvements Recruiting Benefit Increased Retention Employee Publication Savings Reduction in Training Expense Real Estate Savings Reduction in Fax/(Other) Cost At-home Program Uniformity Savings Long Distance Connectivity Savings (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. (4) Costs of additional servers, routers, and the maintenance of this equipment (5)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 (6)Laptop savings come from the reduction of 100 laptops which saves $4,420 per laptop (7)The savings come from not having to administer and reconfigure existing At Home Program PCs Confidential & Proprietary

  6. Co-Pay NPV* • Benefits • Co-pay dollars help subsidize Enron’s lease payments • Concerns • Co-payments raise issues of PC ownership • If Enron is seen as the owner, Enron could be held liable for employee actions • Co-payments raise issues if the employee leaves the company before the end of the three year lease term • Co-payments also raise issues if all employees are not treated equally, which could lead to Enron losing the tax benefit completely • Administration burdensome Cost and cost savings with domestic and international employees at full Enron subsidy $5 (25.93) $10 (22.69) $15 (19.45) * An administrative cost of $50,000 is included in co-pay scenarios Tax Benefits and Concerns Confidential & Proprietary

  7. US Based Local Nationals Equivalent JVs Expats Total South America EES Asia & Africa CALME Europe ENA India GPG EBS PGE Corp./Global TOTAL 101 4,141 179 159 134 1,631 53 3,010 527 2,721 3,340 15,996 46 - 34 23 35 - 8 - - - - 146 3,415 - 91 275 1,263 84 56 - - - - 5,184 229 - 1,022 2,911 354 - 646 - - - - 5,162 3,791 4,141 1,326 3,368 1,786 1,715 763 3,010 527 2,721 3,340 26,488 # of Employees 1,000+ 500-999 100-499 50-99 30-49 Note: Cities with less than 30 employees not shown 21,326 Program Specifications • Proposed Eligibility • Domestic employees of wholly owned entities - regular full-time/part-time employees 15,996 • International employees of wholly owned entities - 5,330 • All levels, all length of service • One election per every 3 years • Seasonal employees are excluded (i.e., NEPCO project employees, summer interns, etc.) Top 10 Home City Locations State Count Country Houston* Sao Paulo Caracas Portland* Seoul Teeside London Buenos Aires Rio de Janiero Santo Domingo TX OR USA Brazil Venezuela USA Korea UK UK Argentina Brazil Dom. Republic 6,160 2,726 2,422 1,682 1,524 938 814 638 524 432 *Includes surrounding areas By Business Unit Confidential & Proprietary

  8. Timeline • 6/7/00 OTC Review • 6/9/00 Vendor Agreements • 6/10/00 Pilot Group Sign-up • 6/12/00 Press Release • 6/15/00 Pilot Group Deployment • 8/1/00 Employee sign-up begins • 9/15/00 Technology Showcase • End Q3 Deployment begins - Hardware/ISP/Portal - Connection/VPN • 12/31/00 Hardware deployment completed - worldwide Confidential & Proprietary

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