TO:  All EGM and EIM employees affected
FROM: Sally Beck, Managing Director of ENW-Global Risk Management Operations

Last fall, the Enron Wholesale Services organization was created and announced in an organizational memo from Jeff Skilling.  All wholesale companies (Enron Americas, Enron Europe, Enron Global Markets and Enron Industrial Markets) plus Enron Net Works and Enron Global Assets were included in the Enron Wholesale Services umbrella.  In that organizational memo, the Energy Operations team (now Global Risk Management Operations) was moved into Enron Net Works to align our operational services, information technology and e:commerce platforms in order to offer the best quality services to Enron wholesale customers.  This alignment also positions us to evaluate the prospect of packaging these services for other customers as well.  With this reorganization, we continue to maintain dedicated operations teams that support each of the wholesale businesses.

Since this reorganization occurred so close to year end, I suggested that we wait until January 1, 2001 to move employees under Enron Net Works.  Senior management, accounting and HR agreed with this date for effecting the move to Enron Networks.  Unfortunately, however, the January conversion to Networks did not get fully executed.  

To correct this, effective April 01, 2001, all EGM and EIM  employees  and non-employees who provide risk management operations services and ultimately report in to Brent Price and Brenda Herod, respectively, will be transferred to ENW - Global Risk Management Operations under  company 083E.   Starting April 1st, you should start using new cost centers for coding and timekeeping purposes.  This will formalize the ENW-Global Risk Management Operations' structure.

There are some direct effects that surround the conversion to Enron Net Works. Because you are transferring between Enron payroll companies, IRS requirements state that FICA withholding must start over.  This applies only to the OASDI (6.2%) which has a maximum wage base withholding of $80,400.00 for 2001.  Medicare tax withholding of 1.45% has no cap and therefore does not start over but continues as usual.

The excess OASDI withholding that you incur for the year will credit to you on your 2001 tax return as withholding.  Therefore, to alleviate the burden of starting over, you can adjust your Federal income tax withholding down by filing a new Form W-4 and claim additional allowances which will reduce the withholding to adjust for the excess OASDI withholding.  Be sure to ask your tax advisor what additional steps you can take to balance out these changes.  You may also contact the Payroll Department @ 713/345-5555 to assist you with any questions.  

We will continue to have dedicated HR reps who will work directly with you and your team and who will coordinate among themselves to share best practices that can positively impact all teams.  If you have questions, please call the HR representative who supports your organization, as identified below relative to the business unit to which your team is dedicated:  

Business Unit	HR Contact	Phone#
EGM 	David Hill	713/853-4218
EIM	Kathy Neal	713/345-7803
EA/Global Services	Frank De Jesus	713/345-3662
EA/Global Services	Hector McLoughlin	713/853-6703

Thanks for your continued hard work and dedication to the success of Enron Wholesale Services.