fw : another mention
then , at an afternoon meeting of employees in the company ' s core natural gas and electricity trading operation , which provides by far the biggest part of enron ' s profits , ' ' quite a bit of concern was raised about the news people had been seeing about this change - of - control payment , ' ' mark palmer , an enron spokesman , said .
at about 4 p . m . central time , two senior executives who had attended the meeting , john lavorato and louise kitchen , told mr . lay about the reaction of employees . ' ' ken made a decision shortly thereafter that the best thing to do would be to waive the payment altogether , ' ' mr . palmer said . even if dynegy ' s directors later voted to award mr . lay a new severance agreement , he would turn it down , mr . palmer added .
- - - - - original message - - - - -
from : armstrong , julie
sent : wednesday , november 14 , 2001 9 : 22 am
to : lohman , tk
subject :
see about traders
11 / 14 / 2001
the wall street journal
a 3
( copyright ( c ) 2001 , dow jones & company , inc . )
enron corp . said its chairman , kenneth lay , has decided to forgo a severance payment of $ 60 . 6 million that could be triggered by dynegy inc . ' s planned acquisition of enron . mr . lay ' s decision capped a day in which he appears to have changed his mind on the matter at least twice .
early in the day , an enron filing with the securities and exchange commission laid out mr . lay ' s severance package . by midday , enron indicated that mr . lay would keep only one - third of the payout , which he would take in stock in the combined company , and that he intended to donate one - third to a foundation to help displaced enron employees . the remaining third would cover income - tax liabilities .
but by the end of the day , enron spokesman mark palmer said that mr . lay , following a meeting of enron energy traders , had decided against taking any of the severance pay . though mr . lay didn ' t attend the traders ' meeting , senior managers told him that " opinions were expressed that he shouldn ' t receive the payment , " mr . palmer said . " he decided the cleanest thing to do was to waive the payment . " the opinions of traders carry particular weight because they produce most of enron ' s profits . questions for mr . lay were directed to mr . palmer , who said he had spoken with mr . lay and other company officials during the day .
the initial disclosure about mr . lay ' s hefty severance payment raised new questions about his willingness to sell enron for a share price that was about a third of the market price of a month ago . last friday , mr . lay even said that enron had other options to the dynegy purchase , which might have allowed the energy company to remain independent , though he declined to elaborate . " things weren ' t desperate . . . we had alternatives , " mr . lay said . the 59 - year - old mr . lay won ' t have an executive position at the combined company , though he might be a director .
for the 12 months ended aug . 31 , mr . lay received about $ 70 million through the exercise of enron options , according to disclosure reports compiled by thomson financial . last year , mr . lay was paid $ 8 . 3 million in salary and bonus and more than $ 10 million in stock awards and other compensation .
enron , the nation ' s largest energy trader , saw its stock collapse in recent weeks following a series of disclosures about the company ' s extensive dealings with partnerships run by some of its own officers . those dealings are under investigation by the sec . last friday , enron agreed to be acquired by the far smaller houston - based dynegy for stock , currently valued at about $ 10 . 7 billion . the merger agreement still must be approved by regulators and shareholders of the two companies .
separately , the california public employees ' retirement system , which owns about three million enron and 500 , 000 dynegy shares , said it would oppose the appointment of any current enron board member to the board of a combined company . michael flaherman , chair of calpers investment committee said that it appeared that enron ' s board " failed in its responsibility " to monitor the activities of enron executives .
mr . palmer , the enron spokesman , said mr . lay had provisions in his employment contract to protect him against a sudden change in control from 1989 forward . in february 2000 , when enron stock was trading between $ 60 and $ 70 a share and mr . lay was being widely lauded for his performance , he negotiated a bigger severance package than he had previously . last august , when chief executive jeffrey skilling quit unexpectedly , mr . lay assumed mr . skilling ' s duties and his contract term was extended by two years to dec . 31 , 2005 .
under the terms of his contract , mr . lay is entitled to payment of $ 20 . 2 million for every full calendar year left on his employment contract , in the event that his employment terminates within 60 days of a change in control . thus , mr . lay is entitled to three full years of payments , or $ 60 . 6 million .
mr . lay , who took charge of the then - houston natural gas co . in 1984 when it was a regional pipeline company , wasn ' t the only member of his family to benefit from enron ' s heady rise to a global energy giant . sec filings show that in recent years a sister of mr . lay , sharon lay , and a son , mark lay , received millions of dollars in salary , commissions and bonuses related to ms . lay ' s travel agency and a paper - products company connected to the younger mr . lay .
mr . palmer said it is a " cheap shot " to criticize the lay family because the pertinent transactions were reported in several annual proxy statements . " the contracts were bid out and fairly awarded , " mr . palmer said . ms . lay said her travel agency , of which she is president and half - owner , had won its enron business through competitive bidding and by providing " the very best service possible . " mark lay couldn ' t be reached for comment .
coming on top of disclosures of enron ' s dealings with partnerships run by its own executives , the relationships between lay family members and the company again raise questions about enron ' s willingness to keep separate corporate and personal interests . former chief financial officer andrew fastow and possibly other enron executives made millions of dollars from these partnerships .
mark lay ' s dealings with enron date back to 1994 , according to the available sec filings . in may 1997 , mark lay and " certain other individuals " who together had been officers , directors or shareholders of a company called paper & print management corp . , or ppmc , entered into employment agreements with an enron unit , enron capital & trade resources , according to enron ' s 1998 proxy statement . the individuals helped set up " a clearinghouse for the purchase and sale of finished paper products , " according to the sec filing . mr . palmer said this effort formed the rudiments of enron ' s profitable paper and pulp - trading business .
as part of the deal , enron agreed to reimburse ppmc $ 1 million for certain expenses . mark lay and his colleagues also agreed to " convey " to enron " certain intangible property rights " from ppmc .
mark lay also got a three - year employment contract from enron as a vice president of enron capital & trade . he got a signing bonus of $ 100 , 000 , a minimum monthly salary of $ 12 , 500 , a minimum annual bonus of $ 100 , 000 for 1997 - 1999 and an option to purchase 20 , 000 enron shares . mark lay is no longer with enron and is now attending a seminary , said mr . palmer .
since 1985 , sharon lay ' s firm , lay / wittenberg travel agency in the park inc . , has provided travel arrangements for employees of enron and its predecessor company . for this work the agency received $ 6 . 8 million from 1996 through 2000 . in an interview yesterday , ms . lay said enron accounted for more than half of her firm ' s revenue in some years . she said her brother ' s position was " more a problem " than an asset since it led some to assume she hadn ' t worked hard enough to get enron ' s business .
fw :
another mention
then , at an afternoon meeting of employees in the company ' s core natural gas and electricity trading operation , which provides by far the biggest part of enron ' s profits , ' ' quite a bit of concern was raised about the news people had been seeing about this change - of - control payment , ' ' mark palmer , an enron spokesman , said .
at about 4 p . m . central time , two senior executives who had attended the meeting , john lavorato and louise kitchen , told mr . lay about the reaction of employees . ' ' ken made a decision shortly thereafter that the best thing to do would be to waive the payment altogether , ' ' mr . palmer said . even if dynegy ' s directors later voted to award mr . lay a new severance agreement , he would turn it down , mr . palmer added .
- - - - - original message - - - - -
from : armstrong , julie
sent : wednesday , november 14 , 2001 9 : 22 am
to : lohman , tk
subject :
see about traders
11 / 14 / 2001
the wall street journal
a 3
( copyright ( c ) 2001 , dow jones & company , inc . )
enron corp . said its chairman , kenneth lay , has decided to forgo a severance payment of $ 60 . 6 million that could be triggered by dynegy inc . ' s planned acquisition of enron . mr . lay ' s decision capped a day in which he appears to have changed his mind on the matter at least twice .
early in the day , an enron filing with the securities and exchange commission laid out mr . lay ' s severance package . by midday , enron indicated that mr . lay would keep only one - third of the payout , which he would take in stock in the combined company , and that he intended to donate one - third to a foundation to help displaced enron employees . the remaining third would cover income - tax liabilities .
but by the end of the day , enron spokesman mark palmer said that mr . lay , following a meeting of enron energy traders , had decided against taking any of the severance pay . though mr . lay didn ' t attend the traders ' meeting , senior managers told him that " opinions were expressed that he shouldn ' t receive the payment , " mr . palmer said . " he decided the cleanest thing to do was to waive the payment . " the opinions of traders carry particular weight because they produce most of enron ' s profits . questions for mr . lay were directed to mr . palmer , who said he had spoken with mr . lay and other company officials during the day .
the initial disclosure about mr . lay ' s hefty severance payment raised new questions about his willingness to sell enron for a share price that was about a third of the market price of a month ago . last friday , mr . lay even said that enron had other options to the dynegy purchase , which might have allowed the energy company to remain independent , though he declined to elaborate . " things weren ' t desperate . . . we had alternatives , " mr . lay said . the 59 - year - old mr . lay won ' t have an executive position at the combined company , though he might be a director .
for the 12 months ended aug . 31 , mr . lay received about $ 70 million through the exercise of enron options , according to disclosure reports compiled by thomson financial . last year , mr . lay was paid $ 8 . 3 million in salary and bonus and more than $ 10 million in stock awards and other compensation .
enron , the nation ' s largest energy trader , saw its stock collapse in recent weeks following a series of disclosures about the company ' s extensive dealings with partnerships run by some of its own officers . those dealings are under investigation by the sec . last friday , enron agreed to be acquired by the far smaller houston - based dynegy for stock , currently valued at about $ 10 . 7 billion . the merger agreement still must be approved by regulators and shareholders of the two companies .
separately , the california public employees ' retirement system , which owns about three million enron and 500 , 000 dynegy shares , said it would oppose the appointment of any current enron board member to the board of a combined company . michael flaherman , chair of calpers investment committee said that it appeared that enron ' s board " failed in its responsibility " to monitor the activities of enron executives .
mr . palmer , the enron spokesman , said mr . lay had provisions in his employment contract to protect him against a sudden change in control from 1989 forward . in february 2000 , when enron stock was trading between $ 60 and $ 70 a share and mr . lay was being widely lauded for his performance , he negotiated a bigger severance package than he had previously . last august , when chief executive jeffrey skilling quit unexpectedly , mr . lay assumed mr . skilling ' s duties and his contract term was extended by two years to dec . 31 , 2005 .
under the terms of his contract , mr . lay is entitled to payment of $ 20 . 2 million for every full calendar year left on his employment contract , in the event that his employment terminates within 60 days of a change in control . thus , mr . lay is entitled to three full years of payments , or $ 60 . 6 million .
mr . lay , who took charge of the then - houston natural gas co . in 1984 when it was a regional pipeline company , wasn ' t the only member of his family to benefit from enron ' s heady rise to a global energy giant . sec filings show that in recent years a sister of mr . lay , sharon lay , and a son , mark lay , received millions of dollars in salary , commissions and bonuses related to ms . lay ' s travel agency and a paper - products company connected to the younger mr . lay .
mr . palmer said it is a " cheap shot " to criticize the lay family because the pertinent transactions were reported in several annual proxy statements . " the contracts were bid out and fairly awarded , " mr . palmer said . ms . lay said her travel agency , of which she is president and half - owner , had won its enron business through competitive bidding and by providing " the very best service possible . " mark lay couldn ' t be reached for comment .
coming on top of disclosures of enron ' s dealings with partnerships run by its own executives , the relationships between lay family members and the company again raise questions about enron ' s willingness to keep separate corporate and personal interests . former chief financial officer andrew fastow and possibly other enron executives made millions of dollars from these partnerships .
mark lay ' s dealings with enron date back to 1994 , according to the available sec filings . in may 1997 , mark lay and " certain other individuals " who together had been officers , directors or shareholders of a company called paper & print management corp . , or ppmc , entered into employment agreements with an enron unit , enron capital & trade resources , according to enron ' s 1998 proxy statement . the individuals helped set up " a clearinghouse for the purchase and sale of finished paper products , " according to the sec filing . mr . palmer said this effort formed the rudiments of enron ' s profitable paper and pulp - trading business .
as part of the deal , enron agreed to reimburse ppmc $ 1 million for certain expenses . mark lay and his colleagues also agreed to " convey " to enron " certain intangible property rights " from ppmc .
mark lay also got a three - year employment contract from enron as a vice president of enron capital & trade . he got a signing bonus of $ 100 , 000 , a minimum monthly salary of $ 12 , 500 , a minimum annual bonus of $ 100 , 000 for 1997 - 1999 and an option to purchase 20 , 000 enron shares . mark lay is no longer with enron and is now attending a seminary , said mr . palmer .
since 1985 , sharon lay ' s firm , lay / wittenberg travel agency in the park inc . , has provided travel arrangements for employees of enron and its predecessor company . for this work the agency received $ 6 . 8 million from 1996 through 2000 . in an interview yesterday , ms . lay said enron accounted for more than half of her firm ' s revenue in some years . she said her brother ' s position was " more a problem " than an asset since it led some to assume she hadn ' t worked hard enough to get enron ' s business .