Message-ID: <4721486.1075842489615.JavaMail.evans@thyme> Date: Wed, 8 Nov 2000 08:59:00 -0800 (PST) From: enron.announcements@enron.com To: all.worldwide@enron.com Subject: Organizational Changes Mime-Version: 1.0 Content-Type: text/plain; charset=ANSI_X3.4-1968 Content-Transfer-Encoding: quoted-printable X-From: Enron Announcements X-To: All Enron Worldwide X-cc: X-bcc: X-Folder: \Drew_Fossum_Dec2000_June2001_1\Notes Folders\Notes inbox X-Origin: FOSSUM-D X-FileName: dfossum.nsf We are making a number of significant organizational changes. These change= s=20 are intended to accomplish four key objectives: First, we need to realign all our wholesale businesses around the successfu= l=20 business model developed over the last decade in North America and Europe. = =20 This model relies on extensive physical and transactional networks built=20 around a relatively small strategic asset position. Second, we need to significantly streamline corporate reporting=20 relationships. Particularly with Joe Sutton=01,s departure, the ability to= =20 directly manage the day-to-day activities of 15 independent business units= =20 has become increasingly difficult. Third, we need to accomplish these changes without, in any way, compromisin= g=20 the ongoing profitability of all our businesses and without delaying or=20 hindering our effort to monetize a significant portion of our lower-yieldin= g=20 asset positions. And fourth, as always, we need to take advantage of the reorganization to= =20 redeploy our talent into our highest value opportunities. ENRON WHOLESALE SERVICES Today, we are forming Enron Wholesale Services (EWS) which will consolidate= =20 our global wholesale businesses. The closer alignment of our wholesale=20 businesses will accomplish the following: (1) enhanced communication and=20 coordination across business units, (2) more rapid deployment of people to= =20 higher valued opportunities, (3) more effective prioritization of=20 opportunities across the wholesale business, and (4) more rapid extension o= f=20 Enron=01,s wholesale business model and capabilities into new industries an= d=20 markets. Enron Wholesale Services will include our current North American, European= =20 (including Japan and Australia), Global Markets, and Industrial Markets=20 operations, and will be expanded to include Enron=01,s Net Works business u= nit=20 as well as a new unit =01) Enron Global Assets. In addition, Enron=01,s me= rchant=20 businesses outside of North America and Europe will be integrated into this= =20 new structure as described below. Mark Frevert, currently Chairman of each of our wholesale units, will assum= e=20 the role of Chairman and CEO of Enron Wholesale Services. Greg Whalley,=20 currently Chairman and CEO of Enron Net Works, will join Mark in the Office= =20 of the Chairman as President and Chief Operating Officer. Providing further impetus for these organizational changes, several of our= =20 international business unit leaders have elected to move into new leadershi= p=20 positions: Rebecca McDonald, currently CEO of Enron APACHI, will join EWS as President= =20 and CEO of Enron Global Assets. Enron Global Assets will have responsibilit= y=20 for managing all of Enron=01,s existing energy asset portfolio outside of N= orth=20 America and Europe. Joining Rebecca in the Office of the Chairman as COO= =20 will be Jim Hughes, currently COO of Enron APACHI. Rebecca and Jim will=20 report to the EWS Office of the Chairman. Sanjay Bhatnagar, currently CEO of Enron India, has joined EBS as CEO for t= he=20 Middle East and Asia region. Sanjay will be responsible for building our= =20 broadband business in this region and the current EBS team in this region= =20 will report to Sanjay. In this role, Sanjay will report to the EBS office = of=20 the Chairman. In addition, Sanjay will continue to remain responsible for= =20 Enron=01,s wholesale energy business in India and will transition this busi= ness=20 into Enron Global Assets in the near future. =20 Diomedes Christodoulou, currently Co-CEO of Enron South America, has joined= =20 EBS as Chief Commercial Officer. Diomedes will be located in London and wi= ll=20 focus his origination activities on global opportunities, with near term=20 attention to the wholesale and enterprise sectors. Diomedes will report to= =20 the EBS Office of the Chairman. Jim Bannantine, currently Co-CEO of Enron South America, will be joining EE= S=20 to lead EES=01, commercial efforts outside North America and Europe. In or= der=20 to ensure a smooth transition for our South American businesses and to=20 facilitate our asset sales activities, Jim will remain in South America for= =20 at least the next several months and continue to serve as CEO of Enron Sout= h=20 America. Throughout the transition, Jim will report to Cliff Baxter and to= =20 the Office of the Chairman of Enron Wholesale Services. Following the=20 transition, Jim will join EES. In addition to these changes in our international asset operations=20 activities, we are making the following changes in our merchant wholesale= =20 businesses and the commercial support functions: Enron Net Works Louise Kitchen will assume Greg=01,s previous responsibilities as President= and=20 CEO of Enron Net Works, reporting into Mark and Greg. =20 Enron Americas Concurrent with the transfer to Enron Global Assets of responsibility for= =20 operating Enron=01,s South and Central America asset base, all trading,=20 marketing, and new asset development activities in these regions will repor= t=20 into a new entity, Enron Americas. Enron Americas will have responsibility= =20 for all wholesale merchant businesses across North, Central and South=20 America. Dave Delainey, President and CEO, and John Lavorato, Chief=20 Operating Officer will comprise the Office of the Chairman for Enron=20 Americas. Enron Europe The Enron Europe organization, which includes Enron=01,s businesses in Aust= ralia=20 and Japan, and Enron Metals, remains unchanged under the leadership of John= =20 Sherriff, President and CEO, and Michael Brown, Chief Operating Officer. Enron Global Markets Enron Global Markets, under the leadership of Mike McConnell, President and= =20 CEO, and Jeff Shankman, Chief Operating Officer, will continue to have=20 responsibility for Enron=01,s Middle East and LNG operations. With the=20 exception of Ecoelectrica in Puerto Rico, all operating power plants and=20 associated personnel in the Caribbean and Central America will transfer to= =20 Enron Global Assets. Enron Global Markets will also continue to manage the= =20 commodity businesses in crude and products, coal, weather, insurance,=20 equities, interest rates, foreign exchange, and agricultural products. Enron Industrial Markets Enron Industrial Markets=01, organization, under the leadership of Jeff McM= ahon,=20 President & CEO, and Ray Bowen, Chief Operating Officer, remains unchanged. Commercial Support for EWS The commercial support functions for EWS will remain with, and be managed b= y,=20 the individual business units. We are creating no incremental overhead in= =20 the creation of EWS, and in fact hope to reduce our operating costs by more= =20 efficient utilization and sharing of resources across EWS. To this end we have asked several people to take on an expanded role across= =20 EWS in addition to their ongoing roles within their business units. These= =20 newly defined roles are as follows: Mid and Back Office Operations =01) Sally Beck will lead Mid and Back Offic= e=20 Operations across EWS. These services will become part of Enron Net Works,= =20 with Sally reporting to Louise Kitchen and Rick Causey, Executive Vice=20 President and Chief Accounting Officer. This alignment creates a coordinat= ed=20 services organization with IT and e-commerce platforms to support the=20 wholesale businesses and to maximize opportunities to commercialize these= =20 services. Mid and Back Office services for all commercial activities will= =20 continue to be organized with dedicated operations controllers responsible= =20 for specific commodities and/or geographic locations. Legal =01) Mark Haedicke will serve in the role of General Counsel for EWS. Regulatory and Government Affairs =01) This function will remain organized = on a=20 regional basis. Rick Shapiro will support all EWS businesses operating in= =20 the Americas, and Mark Schroeder, who is based in London, will support all= =20 European and Eastern Hemisphere operations. Rick and Mark will also contin= ue=20 to support all other Enron businesses operating in their respective regions= =20 and will continue to report to Steve Kean, Executive Vice President and Chi= ef=20 of Staff. Public Relations =01) This function is also organized primarily on a region= al=20 basis. Eric Thode will have responsibility for North American activity,=20 Enron Net Works, and Enron Industrial Markets. Jackie Gentle will continue= =20 in her role for Enron Europe (including Japan and Australia) and John Amble= r=20 will have responsibility for activity outside North America and Europe as= =20 well as providing support for Enron Global Markets and Enron Global Assets.= =20 These individuals will also continue to have a split reporting relationship= =20 to Mark Palmer, Vice President of Communications. Business Analysis and Reporting =01) Wes Colwell will expand his role to co= ver=20 EWS reporting in addition to his current role in North America. Attached for your review is an organization chart for Enron Wholesale=20 Services which summarizes the changes described here. As this organization= =20 continues to evolve we will keep you informed of any additional changes. ENRON GLOBAL EXPLORATION AND PRODUCTION AND ENRON WIND As part of our company-wide initiative to examine our assets and investmen= ts=20 around the world, we are considering a variety of options with respect to= =20 EGEP and EWC. As a consequence, we are putting these businesses under Clif= f=20 Baxter=01,s direction. Jeff Sherrick, CEO of EGEP, and Jim Noles, CEO of E= nron=20 Wind, will report to Cliff. CORPORATE STAFF We are consolidating the corporate staff functions: Human Resources,=20 Government Affairs, Public Relations/Communications and Administration. In= =20 that regard, Cindy Olson, Executive Vice President of Human Resources and= =20 Community Relations, will report to Steve Kean, Executive Vice President an= d=20 Chief of Staff. COMMITTEE STRUCTURE In light of the increased leadership opportunities created by Enron=01,s= =20 growth, the Executive Committee will be expanded to include more of our=20 business unit leaders. The primary role of this committee will continue to= =20 be the communication of relevant information across Enron=01,s businesses a= nd=20 the coordination of activities across those businesses. We will also be=20 drawing on this group to lead company-wide initiatives such as the=20 performance review process and evaluation and creation of new businesses. = =20 The Executive Committee membership is shown on the attached list. We are also forming a new committee =01) the Enron Corporate Policy Commit= tee. =20 This group will be responsible for overall corporate policy, personnel=20 management policy and corporate strategy. The Enron Corporate Policy=20 Committee membership is also shown on the attached list. We are confident that these changes will align our talent and our capital = to=20 our highest return opportunities. Please join us in congratulating and=20 supporting all of these individuals in their new roles.