RE: Fireball - Update!

I agree with your take. Plus, how will those employees be hired? Is it part of the deal? If so, then we will need to figure out how to document it. Michelle

-----Original Message-----
From: Skinner, Cindy
Sent: Friday, September 21, 2001 4:00 PM
To: Erickson, Cheryl
Cc: Funkhouser, Shanna; Ryan, Noel; Cash, Michelle
Subject: FW: Fireball - Update!

Cheryl:

In light of your comments below, it now seems wise for us to schedule a meeting with you to find out which employees will move to Enron and agree on additional information we will need. Also, if Enron staff will be doing all the back office/logistics, I'm assuming some sort of services agreement will be put in place. At a minimum, I suggest Noel, Michelle Cash and I meet with you. Shanna may or may not attend, but we would need to coordinate compensation with Shanna to maintain equity within the Coal marketing group.

I'll have my assistant, Elisa Tamez, contact you to set up a meeting for next Monday or Tuesday.

Thanks.

-----Original Message-----
From: Erickson, Cheryl
Sent: Fri 9/21/2001 2:27 PM
To: Skinner, Cindy
Cc: Fowler, Ellen; Beyer, Michael J
Subject: RE: Fireball - Update!

Cindy: Thank you for your response. Our current plan is that the three marketers that Triton currently employs will become employees of Enron. This will facilitate the coordination with our existing marketers and logistics people. Enron will also handle all of the scheduling, sampling, and "back office" support. As such, we may or may not need additional people for these tasks. We will keep you posted once we know more about the needs of our group from an HR perspective.

Regards, Cheryl

-----Original Message-----
From: Skinner, Cindy
Sent: Friday, September 21, 2001 2:19 PM
To: Erickson, Cheryl
Cc: Funkhouser, Shanna; Ryan, Noel
Subject: FW: Fireball - Update!
Importance: High

Cheryl:

Due to the new structure of the deal, no further HR information will be required. Would appreciate further description on how Enron will market the Triton coal, i.e., do we need to help find additional coal marketers/originators, or will we use existing Coal Group and Triton marketers to handle this. You may not have answers to this yet, but if we can help coordinate through Shanna and/or our recruiting group, please let us know.

Cindy

-----Original Message-----
From: Erickson, Cheryl
Sent: Fri 9/21/2001 1:50 PM
To: Beyer, Michael J; Boomer, John; Childress, Allen B.; Cilia, Mary; Fowler, Ellen; Funkhouser, Shanna; Gasdia, Sonya M.; Giuliani, William; Gorte, David; Gresham, Wayne; Hall, D. Todd; Hendon, Brian; Herrick Jr., Donald W.; Jain, Avinash; Kokenge, Johnna; Krasny, Kenneth; Larson, Bradford; Lawyer, Larry; Martinsen, Aaron; Mendez, Luis; Myers, Thomas; Parrish, Paul E.; Price, Brent A.; Ruffcorn, Kevin; Ryan, Noel; Schlemmer, Jack; Skinner, Cindy; Worthen, Susan
Cc:
Subject: Fireball - Update!

All:

As some of you know, and many may not, we are still working on Project Fireball. Over the past month we have been negotiating with the Vulcan investors to create a structure that benefits both Vulcan and Enron. We have gone from a structure where Enron would own 100% of the company to one that includes some equity, debt, and marketing. We feel fairly confident that we are close to agreeing on a deal that will involve the following basic components:

Enron will pay Vulcan $ 100 million cash for the following:
$ 40 million will be to purchase somewhere around 18% to 19% of the equity in Triton Coal Company
$ 60 million will be to refinance subordinated debt that Vulcan currently has with UBS (Enron will then provide financing of this $60 MM)

Enron will become the exclusive marketer for Triton coal and will receive a fee on each ton of coal sold (based on % of sales price)

We have indicated to Vulcan that we can close this deal within 30 days of their notification of acceptance of our bid. Some final due diligence issues need to be addressed by Enron before closing. The attached file includes a list of due diligence items that we have requested that are still outstanding. Many of these may not apply, now that we will not purchase the entire company. Once Vulcan has accepted our bid we will need to move quickly and will need to let Triton know what outstanding issues we have to resolve. Please review this list and let me know by Monday afternoon of any items that we do not require in light of the new structure of the deal.

We will set meetings with many of you for Monday and Tuesday of next week to ensure a smooth closing process if we are selected. Please let me know if you have any questions.

Thanks to everyone for your continued support on this deal.

Regards,
Cheryl
3-9574

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