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Enron Mail |
Steve, in response to your request to Cynthia Barrow, attached is a stock=
=20 option termination matrix, which indicates the typical termination provisio= ns=20 for each specific type of termination event and for each type of option gra= nt. Some grants may have special provisions due to the reason for the grant;=20 these provisions are specified in the award agreement. In 1996, Enron=01,s Board of Directors approved a change to the termination= =20 provisions to extend from 1 year to three years the time an employee would= =20 have to exercise vested options upon an involuntary termination (due to=20 non-performance, business reorganization, or divestiture) or termination du= e=20 to death, disability or retirement - no change was made to the time allowed= =20 for vested options to be exercised in the event of a voluntary termination,= =20 however. This extension from 1 year to 3 years increased the value of an= =20 option which was the desired effect i.e. fewer options are required to=20 deliver the desired value thus decreasing overall utilization. This change= =20 also reflected Enron=01,s desire to utilize options as a retention device w= ith=20 greater downside to an employee who voluntarily terminates i.e. only 30 day= s=20 allowed to exercise vested options. Prior to August, 1995, an employee ha= d=20 to exercise vested options before terminating - this was changed to the=20 "within 30 days of termination" scenario in August, 1995. The extension for time allowed to exercise vested options in the event of a= n=20 involuntary terminations may also provide the beneficial effect of minimizi= ng=20 litigation associated with involuntary terminations due to divestiture,=20 non-performance, etc. =20 Please let me know if you would like to meet to discuss or if I can provide= =20 additional information. My extension is x35816. Thanks.
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