Message-ID: <19662585.1075860486797.JavaMail.evans@thyme>
Date: Thu, 7 Sep 2000 10:38:00 -0700 (PDT)
From: michelle.cash@enron.com
To: fran.mayes@enron.com
Subject: Re: Privileged and Confidential--Project Triple Lutz
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fyi re:  Lutz.  mhc
---------------------- Forwarded by Michelle Cash/HOU/ECT on 09/07/2000 05:38 
PM ---------------------------


Cynthia Barrow@ENRON
09/06/2000 06:53 AM
To: Michelle Cash/HOU/ECT@ECT
cc: Dolores Lenfest/HR/Corp/Enron@ENRON 
Subject: Re: Privileged and Confidential--Project Triple Lutz  

Michelle, looks good.  I don't know the details of this one, but if you get 
the Buyer to agree it is very generous for the employee.  Regarding Pension 
Plan, if you get Dee the list of employees, we can get an idea of the 
unvested amounts by employee.  Since this appears to be an asset sale, Enron 
can either pay this outside of the plan or consider it forfeited.

Thanks
Cb






Michelle Cash@ECT
09/05/2000 08:07 PM
To: Timothy J Detmering/HOU/ECT@ECT
cc: Fran L Mayes/HOU/ECT@ECT, mstuart@velaw.com, Sheila 
Knudsen/Corp/Enron@ENRON, David Oxley/HOU/ECT@ECT, Anne C 
Koehler/HOU/ECT@ECT, fmackin@aol.com, Dolores Lenfest/HR/Corp/Enron@ENRON, 
Cynthia Barrow/HR/Corp/Enron@ENRON, Mary Joyce/HR/Corp/Enron@ENRON 

Subject: Privileged and Confidential--Project Triple Lutz


Tim,

Anne Koehler asked me to provide general employment terms for Project Triple 
Lutz.  I have spoken with persons in HR and benefits and have put together 
the following "headlines" for employee matters.  This list is a first cut, 
based upon my discussions with persons I could reach today; thus, it may not 
be exhaustive.  Details of certain issues, as described below, will have to 
be worked out.

Of course, your team may choose to modify/delete items from this list, 
depending on the exact nature of the deal.  In the interest of time, however, 
I am sending this list to our lawyers at V&E to begin drafting the employee 
provisions of the sale agreement, which I understand you would like to see on 
Thursday.  Any modifications based upon your team's comments should not be 
difficult.

The employment provisions may include:

Buyer will hire all employees identified by Seller.
The hired employees will have a title that is at least the same/equivalent as 
their title at Enron for a two-year period after closing.
Buyer will give all hired employees credit for years of service at Enron for 
purposes of participation in Buyer's benefits (though not accruals), thus 
allowing the hired employees to have immediate participation in Buyer's 
benefit and compensation plans (e.g., 401k, vacation eligibility, etc.).
The hired employees will be paid, at a minimum, the same base salary they 
earned at Enron (which would include the merit increase for 2001) for a 
two-year period after closing.
The hired employees will receive the same level of total cash compensation as 
their last year of Enron employment for one full year after closing (the 
buyer can make this happen through base salary, bonus, etc.).
The hired employees will receive benefits (e.g., health insurance, life 
insurance, etc.) that are comparable to those they had in their last year of 
employment with Enron (although we probably will have some discussions over 
our sick leave policy, which is generous).
Buyer will retain severance benefits at Seller's level for one year after 
closing, after which the hired employees will be eligible for severance under 
the Buyer's plans (with credited service).
Before Buyer terminates the employment of a hired employee (other than for 
cause -- to be defined), Buyer shall inform Seller, which will have the right 
to re-employ the employee at Enron, with credited service.
For employees with less than 5 years of service, some concession for unvested 
portion of Cash Balance Plan may be necessary.

Open issues/questions include:

Equity:  What is to be done with unvested equity?  For example, in December, 
every Enron employee will be granted stock options worth 25% of their base 
salary (based on the Black-Scholes valuation).  Also, persons with other 
equity grants may forfeit those grants upon closing.  An evaluation of the 
various plans and participants will be necessary to determine exactly where 
any issues exist, as well as possible resolutions of those issues.  In light 
of the appreciation in Enron's stock, this equity issue may be significant.
Pension:  What will happen to hired employees with potential eligibility 
under Enron's pension plan?

If you have any questions about these issues, please give me a call at x 
3-6401.  If I receive additional feedback, I will let you know.

Thanks.

Michelle


 



