Michelle -
 
I will work on re-doing talking points.  I don't arrive until about 10:00 Wed am myself, so I will work on this plane and hopefully have something ready for early afternoon.
 
Happy New Year!
Amy

-----Original Message----- 
From: Cash, Michelle 
Sent: Sun 12/30/2001 6:13 PM 
To: Oxley, David; Curless, Amanda; Davies, Neil; Cashion, Tana; Slone, Jeanie; Fitzpatrick, Amy 
Cc: 
Subject: RE: I am concerned about Networks and NETCO


Amy,
 
I assume that you will take a stab at the new set of talking points?  I'm out of office tomorrow, but plan to be in on Wednesday as usual, pending child care for my son, which may get me in a bit later in the a.m. than usual.  I think we can get these done rather easily.
 
David, was there any thought of service arrangement/assignment for those employees who are close on green cards?  They could remain Enron employees, but perform services for Netco via an assignment letter.  Perhaps the folks at Tindall & Foster thought that this idea didn't work well, but it may be an alternative for those folks.  Lizzette has been working on immigration issues.  If necessary, we can get her working on that possibility, if Neil doesn't have it in hand.
 
Hope all is well.
 
Michelle

-----Original Message----- 
From: Oxley, David 
Sent: Sun 12/30/2001 5:02 PM 
To: Curless, Amanda; Davies, Neil; Cashion, Tana; Slone, Jeanie; Cash, Michelle; Fitzpatrick, Amy 
Cc: 
Subject: RE: I am concerned about Networks and NETCO


I suggest we talk first. Call me on the following cell phone 713-962-1490. The difficulty I suspect is that people are understandably uncertain of the unknown, but in 10 days we will have everything nailed down. Additionally, people, it would appear, seem to be making certain assumptions about the estate which I believe are false. I can't see the estate continuing to sponsor green cards, or in maintaining the cash balance plan, at least in the form of the past, etc., etc., Bankruptcy isn't pleasant.
 
I would however, like to avoid selling NETCO at the estate's expense, as difficult as this may be.
 
The main points we need to communicate and build around would be;
 
Salary - Everyone we talked to has indicated a willingness to keep them at least at current levels
Job responsibility - This is entirely Jay and Jenny's call. If they see a person as necessary to do a different job, they need to explain that. Typically, people should be transferring in exactly the same position as the current have, that would be the whole point of why NETCO needs them. Clearly NETCO will be a subsidiary of a large bank and as such will not have quite the same prominence it enjoyed with Enron pre-bankruptcy. Unfortunately, that is lost forever.
Bonus - Plan two main counter parties have agreed is more generous than Enron's current arrangement, if we perform.
Retention - Two main counter parties have agreed in principle to a pool of cash to be paid to the 700 people in NETCO who didn't get anything in Nov. This would be paid as soon as practical after signing in exchange for a commitment for them to stay for 3 months or so otherwise they will have to repay it.
Benefits - These will differ depending on who buys us. However, it each case they have comparable benefits but they are obviously different. On the specific point of pension plan, they have plans that require some vesting period but again the 2 main counter parties have agreed that they will take Enron service into account (i.e. if they have 5 years with Enron and their plan requires 5 years service to vest they will vest immediately, but obviously will get just their first years contribution). Now is someone is 4 years in with Enron, I recognise this is not a great answer, but has to be contrasted with how long there is a position in the estate for them (i.e. is there a job for another 12 months). The last point concentrates too much on negative aspects of what may happen to estate, so I would prefer to avoid too much innuendo here.
VISA's - we have a plan to switch all H1b visa's within 24 hours. This is apparently straight forward and Neil and Tim Callahan and I have discussed logistics with one of the counter-parties in some detail. On L1's, these will take up to 3 weeks to switch to H1's. Of the 70 people identified who have VISA's only about 7 or 8 have L1's. Tindall and Foster tell us this will not pose a problem and again we have discussed this with the one of the counter-parties who have agreed our approach. These people should avoid traveling outside US in this 3 weeks, but according to Tindall and Foster will be legit.
Green Cards - No easy solution. Essentially these will have to start from scratch. The counter parties have not at this stage told us whether they will support new applications. However, bear in mind I do not believe the Enron estate will continue with green cards, although this has not been officially proclaimed.
Expat Terms - These will probably be honored by the new company, although each counter-party has indicated a desire to "normalise" the terms with those of their own company, over time.
Employment Agreements - We have identified 179 across NETCO. The estate plans to transfer these to the buyer, but it is clear that each prospective buyer does not readily accept this as a term of the deal. As such my working assumption is that the offer letters each NETCO ee receives circa Jan 12, will supercede all previous terms including employment agreements, that individuals may have had. Specifically, I expect that the new employer will not honor future equity, cash retention, target bonus or severance provisions that may be in people contracts. Clearly, there may be some negotiation here.
 
Now, we have other things like Title's, PRC, Promotion dates, Salary reviews, project bonuses, All employee stock option programs, etc., to figure out, but I think it unlikely that these will be unpleasant surprises, after all the new employer will be probably one of the 5 biggest investments banks in the world and we almost certainly benchmarked our processes on them over the last 10 years. There may even be an ability to transfer (after a while to a different part of their organisation, if they have an internal posting process).
 
As to process from here, we want to identify those who DON"T want to go and why. I want to avoid ANYONE receiving an "offer" to switch and NOT accepting it. As I mention above, many of the terms of the "offer" are unlikely to be a huge surprise, and if people have genuine concerns I want to switch them out now for someone who does want to go. We should have 100% acceptance, not because of bullying or ultimatum's but because we figure out early who had concerns, solving them or switching them out for someone else.
 
Jeanie/Amy/Michelle/Neil - looks like we need new updated talking points for all. Lets get them out Weds.
 
David
-----Original Message-----
From: Curless, Amanda 
Sent: Sunday, December 30, 2001 3:12 PM
To: Oxley, David; Davies, Neil; Cashion, Tana; Slone, Jeanie
Subject: RE: I am getting heat from IT.....
Importance: High


David,
I talked with Jay on Friday because I was concerned that Steve Stock and Zhiyong Wei, two senior IT guys, had concerns about Netco and were asking me why it wouldn't be better to stay on the Estate. My whole purpose in discussing this with Jay was to make sure he was aware of their feelings. However, it seems that some of  this miscommunication was and has become an exagerration.
 
I attended Beth Perlman's floor meeting when she communciated the difference between the Estate and Netco. She said that Jay Webb would be talking with everyone that had been identified to go to Netco and that she would be talking with individuals that would be staying on with the Estate. She did tell the employees that if they were identified to go to Netco and had a problem with this then they should talk with her and HR. She also said upon deal closure if the Netco employees receive offers and they turn them down it would be a voluntary resignation.  She urged them to please talk with us now if there are any concerns. She also said that we have requested to offer same salaries, to bridge service, and to pay retention bonuses at the time of deal closure. In addition, she communicated that we have limited information but we would update the group when more became available. 
 
It was never communicated that if they went to Netco they would lose their visas, etc. I have received a lot of questions and concerns about visas but my response is that we are working on this and we have it covered. I have also heard a lot of concerns on the Cash Balance Plan and my response is that we have asked to bridge employees service but we will not know until deal closure.  I have stressed that Netco wants to keep intellectual capital and will most likely make a fair offer to keep employees whole. 
 
In talking with employees identified to go to Netco their biggest concerns are 1) they are not guranteed same benefits, salary, bonus, etc and they feel like they will be bullied into accepting the Netco offer and 2)they are on visas and in the green card process and don't want to start the process over because they don't have enough time left on their visa. I have talked to Neil Davies about the second concern and we are trying to come up with some options. I have talked with the concerned employees about what we requested but I am not sure how else to alleviate their concerns. 
 
I will call Jay first thing Monday morning and discuss how we want to correct this miscommunication. Please keep me updated if you hear anything else. Thanks!
 
Mandy
 
 

-----Original Message----- 
From: Oxley, David 
Sent: Fri 12/28/2001 6:55 PM 
To: Davies, Neil; Cashion, Tana; Slone, Jeanie; Curless, Amanda 
Cc: 
Subject: I am getting heat from IT.....



....Essentially I am guessing that what we asked them to communicate re NETCO and what they did may be two rather different things. While the 1078 miles (I counted them - it broke up boredom of drive) between me picking up voicemails here and what is actually transpiring, it sounds like we a mis-communication mess in IT.

People are suggesting that NETCO guys were told, they had no choice but to go and if they didn't they would lose there visa, etc., etc.,

This was not our intention clearly. We (I thought) made it clear that we would initially work on basis that people could choose to stay with estate but we'd like to talk with them about why. If it's VISA's we have that nailed, they shouldn't be concerned. If it's getting "offered a lower paid job" that simply isn't in the plans of the NETCO transaction, unless Beth, Jay and Jenny are wanting to do that before the transaction (can't think why they would). Bottom-line, people will transfer to a SOLVENT, Aplus credit rated company, on the same salary on perform whatever job Jay and Jenny ask them to. The benefits will switch, but we already know that counter parties benefits are fairly generous even by our standards, and they will agree to bridge service for vesting in pension et al. Bonus plan should be very good (current proposals are slightly better than Enron's). Titles, promotions, stock awards and base pay raises we aren't sure about just yet, but my working assumption is they will follow Enron previous practice until agreed otherwise.

On retention, we have requested a pool of retention dollars for all those people who didn't receive anything from the estate in Nov and we plan for this to be paid to employees in the form of a cash "retention/bonus" payment on or as soon after deal closure as we can. As you guys know these dollars approximate the annual bonus numbers they might otherwise have received if Enron was solvent.

Help me manage this please. 

David