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Enron Mail |
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
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