The top two executives at BMG Entertainment, the music division of German media conglomerate Bertelsmann AG, are resigning less than a week after the company announced an online song-distribution partnership with Napster Inc.

The departures of Michael Dornemann, chairman, and Strauss Zelnick, president and CEO, came about as part of a "substantial realignment" of the company's online strategy, BMG spokesman Keith Estabrook said Sunday. The shake-up is not a direct result of BMG's deal with Napster, Estabrook said.

Bertelsmann CEO Thomas Middelhoff has spent the past year restructuring the company's media empire. Prior to Zelnick's decision to leave, Middelhoff gutted much of BMG, Estabrook said.

For instance, BMG's music club and online distribution divisions were put under the control of Andreas Schmidt, who heads Bertelsmann's e-Commerce Group. And Sonopress, which makes the company's CDs, was shifted from BMG to Bertelsmann's Arvato printing unit.

Schmidt was the executive responsible for finalizing the deal with Napster. Bertelsmann will now have three divisions devoted to online distribution: content, media services and direct-to-customer sales.

For its part, BMG will be left resembling an Old Economy music company, responsible mainly for signing acts and producing songs, Estabrook said.

Dornemann, 55, will give up his position by mid 2001 and will step down from the board of management at Bertelsmann. Zelnick, 43, will leave the Bertelsmann group on Dec. 31.

In a press release, the company said that by stepping down from the executive board, "Dornemann will facilitate the restructuring of Bertelsmann's television, music and new media divisions and allow for a swift transition."

Dornemann, who has been with Bertelsmann for 18 years, is credited with founding BMG, which came about in 1987 by combining the company's existing music operations with RCA. He was also instrumental in the company's acquisition of RCA.

Zelnick was named president and CEO of BMG Entertainment in July 1998.

Also on Sunday, Bertelsmann said Arnold Bahlmann, head of corporate development, and Rudi Gassner, who controlled BMG's international music business before being fired by Zelnick earlier in the year, will take seats on the company's board.

Bahlmann will be responsible for the company's new venture capital division, ``BeCapital.'' Bertelsmann didn't say what exactly Gassner's responsibilities will include, but said that he will work at the company's New York offices.

New York-based BMG Entertainment is the $4.7 billion music and entertainment unit of the media conglomerate Bertelsmann, which has annual revenues of $17.6 billion. BMG owns more than 200 record labels, including Arista, RCA and Windham Hill, which represent such artists as David Bowie, Whitney Houston and Annie Lennox.

Under a deal announced last week, Bertelsmann teamed up with the Internet music-swapping service Napster to develop what the partners characterized as a new, secure membership-based distribution system that will guarantee payments to artists.

In exchange, the German media giant will drop its lawsuit against Napster once the new system is in place. Bertelsmann will also loan Napster money, make its music catalog available, and gain the right to buy a stake in the company.

Bertelsmann's move marks a sharp break with other members of the music industry, which have sued Napster for copyright infringement and sought to have the service shut down. A court decision is expected in the coming weeks.