RE: Clickathome - Proposed treatment for Involuntary Terminations -

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X-From: Steven J Kean
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No need to review with policy committee.

Kalen Pieper@EES
06/14/2001 05:44 PM
To: James Sandt/ENRON@enronXgate @ ENRON, Steven J Kean/NA/Enron@Enron
cc: Suzanne Brown/ENRON@enronXgate@ENRON, Sharon
Butcher/ENRON@enronXgate@ENRON, Gary P Smith/ENRON@enronXgate@ENRON, Marla
Barnard/Enron Communications@Enron Communications@ENRON, David
Oxley/ENRON@enronXgate@ENRON, Robert W Jones/ENRON@enronXgate@ENRON, Cindy
Olson/ENRON@enronXgate@ENRON, Drew Lynch/Enron@EUEnronXGate@ENRON, Mary
Joyce/ENRON@enronXgate@ENRON, Cynthia Barrow/ENRON@enronXgate@ENRON, Sarah A
Davis/ENRON@enronXgate@ENRON, Marie Newhouse/ENRON@enronXgate@ENRON,
Elizabeth Boudreaux/ENRON@enronXgate@ENRON

Subject: RE: Clickathome - Proposed treatment for Involuntary Terminations -
Business Reorganizations

All,

Please let me know by noon tomorrow if you have any issues with this
approach. If not, we are going to roll out this change effective close of
business tomorrow.

Steve/Cindy, I'd suggest that we simply make this change tomorrow. Do you
feel the need to run it by any of the policy committee beforehand?

Kalen

From: James Sandt/ENRON@enronXgate on 06/14/2001 05:00 PM
To: Suzanne Brown/ENRON@enronXgate, Sharon Butcher/ENRON@enronXgate, Kalen
Pieper/HOU/EES@EES, Gary P Smith/ENRON@enronXgate, Marla Barnard/Enron
Communications@Enron Communications, David Oxley/ENRON@enronXgate, Robert W
Jones/ENRON@enronXgate, Cindy Olson/ENRON@enronXgate, Drew
Lynch/Enron@EUEnronXGate, Mary Joyce/ENRON@enronXgate, Cynthia
Barrow/ENRON@enronXgate
cc: Sarah A Davis/ENRON@enronXgate, Marie Newhouse/ENRON@enronXgate,
Elizabeth Boudreaux/ENRON@enronXgate
Subject: RE: Clickathome - Proposed treatment for Involuntary Terminations -
Business Reorganizations

Suzanne:

It is my understanding that everyone is signed off on the suggested revisions
to the Clickathome documents relating to redeployed individuals. Tax is.

In summary, if a person is terminated from Enron or one of its subsidiaries
as a result of a business reorganization, the forfeiture penalty is waived.
The amount of the waived forfeiture penalty is added to that individuals
income as salary (imputed income) and is subject to Federal, State, and FICA
taxes.

V&E and I recommend that the changes are effective as of now and not
retroactive back to the start of the plan. A retroactive date would weaken
the plan as it stands and take out some of the teeth that we put in at its
inception.

Jim

X 3 5673

-----Original Message-----
From: Brown, Suzanne
Sent: Wednesday, June 13, 2001 5:53 PM
To: Sandt, Jim; Butcher, Sharon; Pieper, Kalen; Smith, Gary; Barnard, Marla;
Oxley, David; Jones, Robert W.- HR Exec; Olson, Cindy; Lynch, Drew; Joyce,
Mary; Barrow, Cynthia
Cc: Davis, Sarah A.; Newhouse, Marie; Boudreaux, Elizabeth
Subject: RE: Clickathome - Proposed treatment for Involuntary Terminations -
Business Reorganizations

To all, the severance pay plan is not affected. Please refer to the
original language :

Reason for this email: Gain consensus on this change

Business Issue : Find alternatives to the PC forfeiture penalty when an
employee who has participated in the Clickathome program is involuntarily
terminated
due to business reorganizations.

Proposed Alternative : Replace the cash forfeiture penalty with imputed
income to be reported on year-end W-2. The alternative defers or removes
the cash impact to the employee. Employees moving to other Enron units
who currently do not participate in the program such as PGE and EFS will not
be required to report the PC as imputed income as long as they remain in a
wholly-owned division.

New Process : Requires payroll administration

Timing: Effective immediately.
Question: Do you want this retroactive to program inception?

Other Applications: The imputed income option could be expanded to all types
of terminations. However, in doing so, would allow easier entry into the
program
when an employee is planning to leave the company voluntarily. No
recommendation at this time to change the forfeiture penalty for these
other types of separations.

Please email me with your vote as Kalen is interested in enacting this change
as soon as possible for the current redeployment candidates. Thanks.