Re: Outsource to Texaco

My understanding now on this is that we are talking about the Bridgeline
deal. In that deal, Enron and Texaco both assigned employees to work for the
Bridgeline entity. It is done under a secundment arrangement, and the
employees are sent there via an assignment letter. (Pat, you may recall
that we visited about this process a while back, although I may not have
given you the transaction name at the time).

So, currently, all Enron personnel assigned to Bridgeline actually are Enron
employees. I am not aware of any change to that structure. Fran, do you
know of any changes? Are we now going to transfer all of those employees to
the Bridgeline entity? Those answers would help.

Michelle

FMackin@aol.com on 10/25/2000 09:34:27 AM
To: Mikie.Rath@enron.com, wbarbee@enron.com, dlenfes@enron.com,
Michelle.Cash@enron.com
cc:
Subject: Re: Outsource to Texaco

In a message dated 10/24/00 2:47:31 PM Pacific Daylight Time,
Mikie.Rath@enron.com writes:

<< Wilson suggested I contact you to obtain answers to the same desk issue as
it relates to these employees. I don't have a lot of information on this
deal nor does Dee and we are not sure if employees can take a distribution
from our plan. <<

Mikie and Wilson,

Please send me a copy of the transaction document, or if there is not one,
the letter of intent.

Will there be a sale of assets?

Will Texaco have any continuing obligation to provide Enron with services in
connection with the transaction?

Will Texaco be required to make offers of employment to Enron employees?

I can't respond to the question about the same desk rule unless I know all of
the facts. Earlier this year, in Rev Rul 2000-27 the IRS relaxed the same
desk rule to a sale of less than substantially all of the assets of a
business. I need to understand the facts of the Texaco transaction to
determine if there is a fit.

Generally, an "outsourcing," pursuant to which the third party service
provider offers employment to Enron employees and thereafter provides
services to Enron, is subject to the same desk rule.

Pat