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
x39280

 -----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&A.

David

 -----Original Message-----
From: 	Brown, Aaron (Executive Comp)  
Sent:	Thursday, May 31, 2001 11:34 AM
To:	Mayes, Fran L.; 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.