Message-ID: <25402817.1075862888638.JavaMail.evans@thyme> Date: Wed, 14 Nov 2001 00:53:24 -0800 (PST) From: mark.fereday@enron.com To: kenneth.lay@enron.com Subject: RE: Change of Control Provisions -An Apology Mime-Version: 1.0 Content-Type: text/plain; charset=us-ascii Content-Transfer-Encoding: 7bit X-From: Fereday, Mark X-To: Lay, Kenneth X-cc: X-bcc: X-Folder: \KLAY (Non-Privileged)\Lay, Kenneth\Inbox X-Origin: Lay-K X-FileName: KLAY (Non-Privileged).pst Ken, I am writing this as an apology. I have read about the heads of various companies and institutions, such as Railtrack here in the UK, taking large (huge) payments / payoffs / salaries while in charge of companies providing extremely poor levels of service and customer satisfaction. After reading yesterday from various sources about the level of the provision in your contract I was extremely cynical. After your voice mail / email this morning I am impressed and even uplifted. Thank you. Regards, Mark Fereday -----Original Message----- From: Ken Lay - Office of the Chairman Sent: 14 November 2001 00:18 To: DL-GA-all_enron_worldwide2 Subject: Change of Control Provisions As many of you know, I have a provision in my employment contract which provides for a payment of $20 million per year for the remaining term of my contract in the event of a change of control of Enron. The merger with Dynegy, or a similar transaction with any other company, would trigger this provision on closing. Assuming the merger with Dynegy is closed within 6-9 months, as we expect, this provision would entitle me to total payments of slightly more than $60 million. Many CEOs have change of control provisions in their employment contracts and mine has been in place since 1989. But given the current circumstances facing the company and our employees, I have been giving a lot of thought these last few days to what to do about this payment. Initially, I thought I would use part of the funds for a foundation for our employees and take the remainder in stock and cash. However, after talking to a number of employees this afternoon, I have decided that the best course of action would be for me to waive my right to any of this payment. Therefore, at closing, I will receive no payments under this provision. I know this action does not remedy the uncertainty that you and your families face. But please know that I will continue to do everything in my power to serve the best interests of Enron's employees and shareholders. I am still very proud of what we have built at Enron, and I want to continue working with all of you to correct the problems and restore Enron to its rightful place in the energy industry. Thank you.