Shall we toss for who rings back?  Its going to be a long conversastion.

 -----Original Message-----
From: 	Belden, Tim  
Sent:	Friday, January 04, 2002 11:40 AM
To:	Kitchen, Louise; Lavorato, John
Subject:	Option on Employment Contract

Like you, I am getting very frustrated with this process.  I am genuinely trying to be as reasonable as possible.  I am not trying to "hold up" the deal at the last minute.  I'm afraid that I am being asked to take a fairly large leap of faith after this company (I don't mean the two of you -- I mean Enron) has screwed me and the people who work for me.

I am generally ok with the concept of the option, the doc, and comp parameters.  In addition, I need assurances that 90 day retentions will be paid to the people we have identified who deserve them and haven't received them and I need to know that the comp conveyed to me in 2001 is secure. 

It is unlikely that I would be here today if it weren't for the collective comp conveyed to me during 2001.  I have received assurances from the two of you, Oxley, and Greg at different times as to the security of the comp received.  The messages generally start with "it's safe," "don't worry about it," "all comp paid in 2001 advanced the interest of shareholders and the estate," "low probability that there will be any issues," ....  At other times, particularly when you want me to commit to this deal, the logic changes.  The comp paid in 2001 becomes risky and will become a whole lot safer if I'm on the team.  While I recognize that Enron is a very strange and fluid place these days, it appears that at times the story changes depending on what you want me to do.

When I ask for indemnification on comp paid to me in 2001 the answer is that it is off the table -- a non-starter.  Why?  
Because the estate is negotiating the deal.  Then have them negotiate that on behalf of me.
Because the buyer has no interest in legacy issues with the estate.  I wouldn't be here but for the legacy issues with the estate -- it is definitely the buyer's issue!
Because people have too much to do to get this deal done to take the time to negotiate with each employee.  I am available at any time wherever you want me to be to discuss this matter if and when the estate/the buyer have time.
Because we don't know who from the buyer to negotiate with.  Someone from the buyer has to decide on comp and contract issues -- why not figure it out now.
Because this deal is bigger than Tim Belden.  I'm not delusional.  I know that this is a big deal with a lot of moving parts.  If it's bigger than me then it will likely move forward without me.


Since I am not "on the team" right now, I am also working with a great deal less information than you have.  I respect your choice to differentiate the information disseminated to people "on the team" versus not "on the team."  However, the consequences of that choice provide less information to me which creates a greater leap of faith in my mind.  For example, I have no idea how the mechanics of getting these options done, conveyed to the creditors/buyer/estate/judge works.  Louise inidicated that it would be a memo or some form of written document indicating the people and total dollars needed to secure them.  If that's the case, you could add my indemnification amount (adjusted by probability of payout) to that total and it surely wouldn't blow up the deal.  Unless, the probability of payout is high.

Furthermore, I am not proposing that we change the basic employment doc (subject to comment from my lawyer, but I'll try to keep immaterial changes to a minimum).  I am saying that a condition precedent for me is to negotiate a separate indemnification doc with the buyer.  At that point in time, I would hope that they have the time and the inclination to discuss such a doc.  Perhaps at that time, some of the 2001 comp issues will already be cleared through the bankruptcy judge making the discussion that much easier.  Based on various discussions with the two of you over the last couple of weeks I have been led to believe that such a decision is expected and perhaps imminent.  I don't understand why this is a non-starter issue, but I don't have the same information that you do.

To be clear, here is the basic deal that I am willing to offer as a free option to the buyer:
the deal as it exists plus
retention payments for those still with the company who deserve them who have not yet received them.
indemnification of 2001 comp up to $4 million.

I expect that the two of you will tell me that I'm not on the team, that 800 people are going home, and that the Portland office will be moved to Houston if this thing survives.  That is not what I want to happen.  If this deal is bigger than me then those things shouldn't happen.  I have given this a lot of thought over the last couple of days and came up with my conclusions.  I am open to any productive discussions that you would like to have.

In talking through this stuff with Mike and Matt I realize what a hard position you guys are in.  I feel that I have lost ground rather than gain ground with them in the last couple of days.  I trust that you are trying to do the right thing.  There are just so many things that are uncertain right now that it makes it very difficult for me to give away the option that you have requested without firming up some other issues for me at the same time.  

Finally, I apologize for hanging up on Louise ealier.  It's probably better than me hearing what she was about to say and her hearing what I was about to say.  I will call to see that you received and read this e-mail.  I am comfortable with whatever you decide to do.

Tim