lal echterhoff ' s issue robert and louise : reading from the bottom up , here is a string of emails that determined we would let the provisions of the plan and agreement govern echterhoff ' s issue . by the way , some of his assumed facts aren ' t correct - we don ' t make exceptions regarding the plans because of bad accounting results . retirement for the stock plan is age 55 with 5 years of service regardless of whether you retire from enron with respect to benefit programs .
if you would like to discuss , give me a call .
aaron
x 39280
- - - - - original message - - - - -
from : joyce , mary
sent : monday , june 04 , 2001 3 : 05 pm
to : brown , aaron ( executive comp ) ; cash , michelle ; oxley , david ; fmackin @ aol . com
cc : mayes , fran l .
subject : re : stock option questions
we are going to have to let the plan rule , however , i think this points out how important it is to always stipulate that the grant agreement rules . either verbally or in writing , we need to say " generally it is the shorter of the term of the option or 3 years . this depends on when the grant was made . "
mary
- - - - - original message - - - - -
from : brown , aaron ( executive comp )
sent : thursday , may 31 , 2001 12 : 59 pm
to : cash , michelle ; oxley , david ; fmackin @ aol . com
cc : mayes , fran l . ; joyce , mary
subject : re : stock option questions
i spoke with pat and he agrees with you michelle . he said that the award agreement rules .
aaron
- - - - - original message - - - - -
from : cash , michelle
sent : thursday , may 31 , 2001 12 : 24 pm
to : oxley , david ; fmackin @ aol . com
cc : brown , aaron ( executive comp ) ; mayes , fran l . ; joyce , mary
subject : re : stock option questions
the q & a is not binding - - it clearly states that the plan prevails . unfortunately , some people have grants that do not have the 3 - year period to exercise , although i understand that most of the more recent grants do have the 3 - year period .
pat , let me know if you disagree .
michelle
michelle cash
enron north america corp .
1400 smith street , eb 3823
houston , texas 77002
( 713 ) 853 - 6401
michelle . cash @ enron . com
this message may contain confidential information that is protected by the attorney - client and / or work product privileges .
david oxley / enron @ enronxgate 05 / 31 / 2001 12 : 18 pm to : aaron brown / enron @ enronxgate , fran l mayes / enron @ enronxgate , michelle cash / hou / ect @ ect cc : mary joyce / enron @ enronxgate subject : re : stock option questions
ok . so what do we say to these people " plan prevails , q & a may have been misleading , but tough " ?
if mich tells me that q & a is not legally binding on us i am fine with above . since they are leaving us i have no desire to give them more than the plan entitles them to , but i am frustrated that we stated 3 years so clearly in q cash , michelle ; oxley , david
cc : joyce , mary
subject : re : stock option questions
we don ' t change the terms of option agreements at enron because of uncapped earnings charges after changes are made . caveat seems fine and the provisions of the plan prevail .
aaron
- - - - - original message - - - - -
from : mayes , fran l .
sent : thursday , may 31 , 2001 10 : 59 am
to : brown , aaron ( executive comp ) ; cash , michelle
subject : fw : stock option questions
fyi . i have already sent a copy to david oxley .
fran
- - - - - original message - - - - -
from : echterhoff , lal
sent : thursday , may 31 , 2001 10 : 53 am
to : mayes , fran l .
cc : brian redmond / hou / ect @ enron
subject : re : stock option questions
your position that the general disclaimer on the q & a of march 8 negated the specific response to the question regarding the period to exercise stock options is unacceptable . if the answer to this specific question , shown below , was that various plans had various periods for exercise , then that should have been the answer to the question , not an unequivocal statement that the period to exercise is three years . i , and i am sure many others , made certain critical decisions based on your statement which you now claim to be of no validity . i would suggest that the remedy to this situation is to allow all stock options to have a period to exercise of three years unless earlier due to the actual expiration date stated on the grant . i use the term " expiration date " to be the normal expiration date that would occur is options are unexercised and that would apply to anyone continuing employment with enron .
with regard to the position that the period to exercise is set by the particular stock option plan and cannot be changed , anything can be changed or special provisions made particularly in the course of a transition due to a merger , spin off or sale of a company . special provisions were made to exclude hpl employees from the new all employee stock option plan , special provisions were made to provide a 5 % payment to hpl employees in lieu of the new stock option plan , special provisions were made to consider hpl employees over the age of 55 and with more that 5 years of service as retirees to allow vesting of stock options and i feel sure that there have been other special considerations to certain employees .
lal echterhoff
from march 8 , 2001 , q & a :
" 1 . with the transfer to aep , will my termination be listed as involuntary so that i can exercise my vested options ?
yes , your transfer to aep will be treated as an involuntary termination by reason of divestiture from enron .
2 . what is the time frame to exercise my vested stock options ?
the period to exercise vested options upon involuntary termination , retirement , death or disability is three ( 3 ) years . "
.
from : fran l mayes / enron @ enronxgate on 05 / 30 / 2001 02 : 14 pm
subject : stock option questions
we have received questions from many employees concerning the expiration date for stock options . the q & a dated march 8 , 2001 stated three years as the exercise date for options . however , on page 1 of the document , a statement was included regarding the intent of the document and that the stock
option plan document will govern all provisions of the stock option program .
if you have options listed on the stock option termination report which list a one year expiration , not three years as stated in question # 16 of the document , this is correct and follows the provision of the plan document . some employees have options granted under a different stock option plan and that plan carries
a three year term of expiration . please review your report carefully to determine which plan your options were issued under .
additionally , the document was intended to provide general information only . page 1 included the statement regarding the plan document specifically in case
there were any errors made in the document . additionally , we stated that employees could obtain copies of the plan document for their review . enron provides
the plan documents so that employees can familiarize themselves with the plan and make decisions based on plan document .
i apologize for any confusion this may have caused , however , the plan under which the options were granted is the official document by which enron determines
the termination date . please call me if you need to discuss your options , however , understand that i cannot speak with you regarding other employees ' compensation / options .
lal echterhoff ' s issue
robert and louise : reading from the bottom up , here is a string of emails that determined we would let the provisions of the plan and agreement govern echterhoff ' s issue . by the way , some of his assumed facts aren ' t correct - we don ' t make exceptions regarding the plans because of bad accounting results . retirement for the stock plan is age 55 with 5 years of service regardless of whether you retire from enron with respect to benefit programs .
if you would like to discuss , give me a call .
aaron
x 39280
- - - - - original message - - - - -
from : joyce , mary
sent : monday , june 04 , 2001 3 : 05 pm
to : brown , aaron ( executive comp ) ; cash , michelle ; oxley , david ; fmackin @ aol . com
cc : mayes , fran l .
subject : re : stock option questions
we are going to have to let the plan rule , however , i think this points out how important it is to always stipulate that the grant agreement rules . either verbally or in writing , we need to say " generally it is the shorter of the term of the option or 3 years . this depends on when the grant was made . "
mary
- - - - - original message - - - - -
from : brown , aaron ( executive comp )
sent : thursday , may 31 , 2001 12 : 59 pm
to : cash , michelle ; oxley , david ; fmackin @ aol . com
cc : mayes , fran l . ; joyce , mary
subject : re : stock option questions
i spoke with pat and he agrees with you michelle . he said that the award agreement rules .
aaron
- - - - - original message - - - - -
from : cash , michelle
sent : thursday , may 31 , 2001 12 : 24 pm
to : oxley , david ; fmackin @ aol . com
cc : brown , aaron ( executive comp ) ; mayes , fran l . ; joyce , mary
subject : re : stock option questions
the q & a is not binding - - it clearly states that the plan prevails . unfortunately , some people have grants that do not have the 3 - year period to exercise , although i understand that most of the more recent grants do have the 3 - year period .
pat , let me know if you disagree .
michelle
michelle cash
enron north america corp .
1400 smith street , eb 3823
houston , texas 77002
( 713 ) 853 - 6401
michelle . cash @ enron . com
this message may contain confidential information that is protected by the attorney - client and / or work product privileges .
david oxley / enron @ enronxgate 05 / 31 / 2001 12 : 18 pm to : aaron brown / enron @ enronxgate , fran l mayes / enron @ enronxgate , michelle cash / hou / ect @ ect cc : mary joyce / enron @ enronxgate subject : re : stock option questions
ok . so what do we say to these people " plan prevails , q & a may have been misleading , but tough " ?
if mich tells me that q & a is not legally binding on us i am fine with above . since they are leaving us i have no desire to give them more than the plan entitles them to , but i am frustrated that we stated 3 years so clearly in q cash , michelle ; oxley , david
cc : joyce , mary
subject : re : stock option questions
we don ' t change the terms of option agreements at enron because of uncapped earnings charges after changes are made . caveat seems fine and the provisions of the plan prevail .
aaron
- - - - - original message - - - - -
from : mayes , fran l .
sent : thursday , may 31 , 2001 10 : 59 am
to : brown , aaron ( executive comp ) ; cash , michelle
subject : fw : stock option questions
fyi . i have already sent a copy to david oxley .
fran
- - - - - original message - - - - -
from : echterhoff , lal
sent : thursday , may 31 , 2001 10 : 53 am
to : mayes , fran l .
cc : brian redmond / hou / ect @ enron
subject : re : stock option questions
your position that the general disclaimer on the q & a of march 8 negated the specific response to the question regarding the period to exercise stock options is unacceptable . if the answer to this specific question , shown below , was that various plans had various periods for exercise , then that should have been the answer to the question , not an unequivocal statement that the period to exercise is three years . i , and i am sure many others , made certain critical decisions based on your statement which you now claim to be of no validity . i would suggest that the remedy to this situation is to allow all stock options to have a period to exercise of three years unless earlier due to the actual expiration date stated on the grant . i use the term " expiration date " to be the normal expiration date that would occur is options are unexercised and that would apply to anyone continuing employment with enron .
with regard to the position that the period to exercise is set by the particular stock option plan and cannot be changed , anything can be changed or special provisions made particularly in the course of a transition due to a merger , spin off or sale of a company . special provisions were made to exclude hpl employees from the new all employee stock option plan , special provisions were made to provide a 5 % payment to hpl employees in lieu of the new stock option plan , special provisions were made to consider hpl employees over the age of 55 and with more that 5 years of service as retirees to allow vesting of stock options and i feel sure that there have been other special considerations to certain employees .
lal echterhoff
from march 8 , 2001 , q & a :
" 1 . with the transfer to aep , will my termination be listed as involuntary so that i can exercise my vested options ?
yes , your transfer to aep will be treated as an involuntary termination by reason of divestiture from enron .
2 . what is the time frame to exercise my vested stock options ?
the period to exercise vested options upon involuntary termination , retirement , death or disability is three ( 3 ) years . "
.
from : fran l mayes / enron @ enronxgate on 05 / 30 / 2001 02 : 14 pm
subject : stock option questions
we have received questions from many employees concerning the expiration date for stock options . the q & a dated march 8 , 2001 stated three years as the exercise date for options . however , on page 1 of the document , a statement was included regarding the intent of the document and that the stock
option plan document will govern all provisions of the stock option program .
if you have options listed on the stock option termination report which list a one year expiration , not three years as stated in question # 16 of the document , this is correct and follows the provision of the plan document . some employees have options granted under a different stock option plan and that plan carries
a three year term of expiration . please review your report carefully to determine which plan your options were issued under .
additionally , the document was intended to provide general information only . page 1 included the statement regarding the plan document specifically in case
there were any errors made in the document . additionally , we stated that employees could obtain copies of the plan document for their review . enron provides
the plan documents so that employees can familiarize themselves with the plan and make decisions based on plan document .
i apologize for any confusion this may have caused , however , the plan under which the options were granted is the official document by which enron determines
the termination date . please call me if you need to discuss your options , however , understand that i cannot speak with you regarding other employees ' compensation / options .