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Enron Mail |
Here it is. Michelle
---------------------- Forwarded by Michelle Cash/HOU/ECT on 04/03/2000 11:= 43=20 AM --------------------------- FMackin@aol.com on 03/23/2000 11:50:42 AM To: Michelle.Cash@enron.com cc: pbutler@enron.com, kbolton@enron.com=20 Subject: Deferral of Payouts under LTIP To: Michelle Cash Date: March 23, 2000 From: Patrick Mackin Subject: Enron Investment Partners Long Term Incentive Plan; Deferral of Payouts Under Enron Corp. Deferral Plan Michelle, Carol Jewett called me this morning about including a provision i= n the long term incentive plan ("LTIP") being established for Enron Investmen= t Partners (old Enron Development Corp.) to permit deferral of payouts under the Enron Corp. Deferral Plan. I suggested to Carol that such a provision in the LTIP would not be appropriate or sufficient; that the tail cannot wag the dog. If such deferrals are to be permitted, they would have to be authorized and made under the provisions of the Enron Corp. Deferral Plan. Also, there are som= e additional issues discussed below. Any compensatory arrangement that by design or practice defers payment of t= he benefit until or beyond termination of an employee=01,s employment is consi= dered to be a "pension plan" under ERISA. ERISA contains complex and challenging administrative, participation and funding requirements (which most employers want to avoid) for such non-tax qualified pension plans. The way to avoid these requirements is to design such a compensatory program, such as a deferral plan, so that it is a "top hat" plan which is exempt, not from ERISA, but from the more onerous requirements. For example, only employees who meet the "top hat" definition are permitted to participate in the Enron Corp. Deferral Plan. Enron Corp. is not willin= g to let all employees who participate in the LTIP make deferrals to the Enro= n Corp. Deferral Plan. Any participant in the LTIP who wants to defer a payo= ut must first pass the screening test for top hat employees applied by Enron Corp. Compensation and then make the deferral election on an approved form. Also, any such employee must become an employee of Enron Corp. and then reassigned or seconded to work for Enron Investment Partners. This employment requirement is to avoid multiple employer problems related to th= e Enron Corp. Deferral Plan and its related trust. Michelle, it may be "better, faster, simpler" to include a deferral feature in the LTIP. The same ERISA issues are present, but Enron Investment Partners is in control. Regardless, let=01,s discuss the design for the deferrals at your convenien= ce. Pat
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