ENRON CORP/OR/, DEF 14A, 2000-03-21

ENRON CORP/OR/
DEF 14A, 2000-03-21
PETROLEUM & PETROLEUM PRODUCTS (NO BULK STATIONS)

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<PAGE> 1

SCHEDULE 14A
(RULE 14A-101)

INFORMATION REQUIRED IN PROXY STATEMENT

SCHEDULE 14A INFORMATION

PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. )

Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement [ ] Confidential, for Use of the
Commission Only (as permitted by
Rule 14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to sec. 240.14a-11(c) or sec. 240.14a-12

ENRON CORP.
- --------------------------------------------------------------------------------
(Name of Registrant as Specified in its Charter)

- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)

Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(l) and
0-11.

(1) Title of each class of securities to which transaction applies:

- --------------------------------------------------------------------------------
(2) Aggregate number of securities to which transaction applies:

- --------------------------------------------------------------------------------
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the filing fee
is calculated and state how it was determined):

- --------------------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:

- --------------------------------------------------------------------------------
(5) Total fee paid:

- --------------------------------------------------------------------------------

[ ] Fee paid previously with preliminary materials.

[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number, or
the Form or Schedule and the date of its filing.

(1) Amount Previously Paid:

- --------------------------------------------------------------------------------
(2) Form, Schedule or Registration Statement No.:

- --------------------------------------------------------------------------------
(3) Filing Party:

- --------------------------------------------------------------------------------
(4) Date Filed:

- --------------------------------------------------------------------------------
<PAGE> 2

[ENRON LOGO]

ENRON CORP.

NOTICE OF ANNUAL MEETING OF SHAREHOLDERS

May 2, 2000

TO THE SHAREHOLDERS:

Notice is hereby given that the annual meeting of shareholders of Enron
Corp. ("Enron") will be held in the LaSalle Ballroom of the Doubletree Hotel at
Allen Center, 400 Dallas Street, Houston, Texas, at 10:00 a.m. Houston time on
Tuesday, May 2, 2000, for the following purposes:

1. To elect eighteen directors of Enron to hold office until the next
annual meeting of shareholders and until their respective successors are
duly elected and qualified;

2. To ratify the Board of Directors' appointment of Arthur Andersen LLP,
independent public accountants, as Enron's auditors for the year ending
December 31, 2000;

3. To consider a shareholder proposal from Brent Blackwelder, President,
Friends of the Earth Action;

4. To consider a shareholder proposal from Dr. Julia M. Wershing; and

5. To transact such other business as may properly be brought before the
meeting or any adjournment(s) thereof.

Holders of record of Enron Common Stock and Cumulative Second Preferred
Convertible Stock at the close of business on March 3, 2000, will be entitled to
notice of and to vote at the meeting or any adjournment(s) thereof.

Shareholders who do not expect to attend the meeting are requested to sign
and return the enclosed proxy, for which a postage-paid, return envelope is
enclosed. The proxy must be signed and returned in order to be counted.

By Order of the Board of Directors,

REBECCA C. CARTER
Senior Vice President,
Board Communications and Secretary

Houston, Texas
March 28, 2000
<PAGE> 3

[ENRON LOGO]

ENRON CORP.

PROXY STATEMENT

The enclosed form of proxy is solicited by the Board of Directors of Enron
Corp. ("Enron") to be used at the Annual Meeting of Shareholders to be held in
the LaSalle Ballroom of the Doubletree Hotel at Allen Center, 400 Dallas Street,
Houston, Texas, at 10:00 a.m. Houston time on Tuesday, May 2, 2000. The mailing
address of the principal executive office of Enron is 1400 Smith St., Houston,
Texas 77002-7369. This proxy statement and the related proxy are to be first
sent or given to the shareholders of Enron on approximately March 28, 2000. Any
shareholder giving a proxy may revoke it at any time provided written notice of
such revocation is received by the Senior Vice President, Board Communications
and Secretary of Enron before such proxy is voted; otherwise, if received in
time, properly completed proxies will be voted at the meeting in accordance with
the instructions specified thereon. Shareholders attending the meeting may
revoke their proxies and vote in person.

Holders of record at the close of business on March 3, 2000, of Enron's
Common Stock (the "Common Stock") will be entitled to one vote per share on all
matters submitted to the meeting. Holders of record at the close of business on
March 3, 2000, of Enron's Cumulative Second Preferred Convertible Stock (the
"Preferred Convertible Stock") will be entitled to a number of votes per share
equal to the conversion rate of 27.304 shares of Common Stock for each share of
Preferred Convertible Stock. On March 3, 2000, the record date, there were
outstanding and entitled to vote at the annual meeting of shareholders
724,602,226 shares of Common Stock and 1,287,136 shares of Preferred Convertible
Stock. There are no other voting securities outstanding. Common Stock and
Preferred Convertible Stock are collectively referred to herein as "Voting
Stock."

Enron's annual report to shareholders for the year ended December 31, 1999,
including financial statements, is being mailed herewith to all shareholders
entitled to vote at the annual meeting. The annual report does not constitute a
part of the proxy soliciting material.

ITEM 1.

ELECTION OF DIRECTORS

At the meeting, eighteen directors are to be elected to hold office until
the next succeeding annual meeting of the shareholders and until their
respective successors have been elected and qualified. All of the nominees are
currently directors of Enron. Proxies cannot be voted for a greater number of
persons than the number of nominees named on the enclosed form of proxy. A
plurality of the votes cast in person or by proxy by the holders of Voting Stock
is required to elect a director. Accordingly, under the Oregon Business
Corporation Act and Enron's bylaws, abstentions and "broker non-votes" would not
have the same legal effect as a vote withheld with respect to a particular
director. A broker non-vote occurs if a broker or other nominee does not have
discretionary authority and has not received instructions with respect to a
particular item. Shareholders may not cumulate their votes in the election of
directors.

It is the intention of the persons named in the enclosed proxy to vote such
proxy "FOR" the election of the nominees named herein. Should any nominee become
unavailable for election, discretionary authority is conferred to vote for a
substitute. The following information regarding the nominees, their principal
occupations, employment history and directorships in certain companies is as
reported by the respective nominees.
<PAGE> 4

<TABLE>
<S> <C>
[PHOTO] ROBERT A. BELFER, 64
Director since 1983
Mr. Belfer's principal occupation is Chairman and Chief
Executive Officer of Belco Oil & Gas Corp., a company formed
in 1992. Prior to his resignation in April, 1986 from Belco
Petroleum Corporation ("BPC"), a wholly owned subsidiary of
Enron, Mr. Belfer served as President and then Chairman of
BPC.
- ---------------------------------------------------------------------------------------

[PHOTO] NORMAN P. BLAKE, JR., 58
Director since 1993
Mr. Blake is the Chief Executive Officer and Secretary
General of the United States Olympic Committee. Mr. Blake
served as Chairman, President and Chief Executive Officer of
the Promus Hotel Corporation from December, 1998 until
November, 1999 when it merged with the Hilton Hotels
Corporation. From November, 1990 until May, 1998, he served
as Chairman, President and Chief Executive Officer of USF&G
Corporation until its merger with the St. Paul Companies. He
is also a director of Owens-Corning Corporation.
- ---------------------------------------------------------------------------------------

[PHOTO] RONNIE C. CHAN, 50
Director since 1996
For over nine years, Mr. Chan has been Chairman of Hang Lung
Development Limited, a publicly traded Hong Kong based
company involved in property development and investment as
well as hotel development and management. Mr. Chan also
co-founded and is a director of various companies within
Morningside/Springfield Group, which invests in private
industrial companies internationally and he is also a
director of Standard Chartered Bank plc and Motorola, Inc.
- ---------------------------------------------------------------------------------------
</TABLE>

2
<PAGE> 5
<TABLE>
<S> <C>

[PHOTO] JOHN H. DUNCAN, 72
Director since 1985
Mr. Duncan's principal occupation has been investments since
1990. Mr. Duncan is also a director of EOTT Energy Corp.
(the general partner of EOTT Energy Partners, L.P.), Azurix
Corp. and Group I Automotive Inc.
- ---------------------------------------------------------------------------------------

[PHOTO] WENDY L. GRAMM, 55
Director since 1993
Dr. Gramm is an economist and Director of the Regulatory
Studies Program of the Mercatus Center at George Mason
University. From February, 1988 until January, 1993, Dr.
Gramm served as Chairman of the Commodity Futures Trading
Commission in Washington, D.C. Dr. Gramm is also a director
of IBP, inc., State Farm Insurance Co. and Invesco Funds.
Dr. Gramm was also a director of the Chicago Mercantile
Exchange until December 31, 1999.
- ---------------------------------------------------------------------------------------

[PHOTO] KEN L. HARRISON, 57
Director since 1997
Mr. Harrison has served as Chairman of the Board and Chief
Executive Officer of Portland General Electric Company since
1988. He plans to retire on March 31, 2000. Additionally,
Mr. Harrison served as Chairman of Enron Communications,
Inc. from its inception in 1996 through November, 1999, and
as a Vice Chairman of Enron from July, 1997 to July, 1999.
- ---------------------------------------------------------------------------------------
</TABLE>

3
<PAGE> 6
<TABLE>
<S> <C>

[PHOTO] ROBERT K. JAEDICKE, 71
Director since 1985
Dr. Jaedicke is Professor (Emeritus) of Accounting at the
Stanford University Graduate School of Business in Stanford,
California. He has been on the Stanford University faculty
since 1961 and served as Dean from 1983 until 1990. Dr.
Jaedicke is also a director of Boise Cascade Corporation,
California Water Service Company and GenCorp, Inc. Dr.
Jaedicke was also a director of State Farm Insurance Co.
until June, 1999.
- ---------------------------------------------------------------------------------------

[PHOTO] KENNETH L. LAY, 57
Director since 1985
For over fourteen years, Mr. Lay has been Chairman of the
Board and Chief Executive Officer of Enron. Mr. Lay is also
a director of Eli Lilly and Company, Compaq Computer
Corporation, Azurix Corp., EOTT Energy Corp. (the general
partner of EOTT Energy Partners, L.P.), Questia Media, Inc.
and Trust Company of the West.
- ---------------------------------------------------------------------------------------

[PHOTO] CHARLES A. LEMAISTRE, 76
Director since 1985
For 18 years, Dr. LeMaistre served as President of the
University of Texas M. D. Anderson Cancer Center in Houston,
Texas and now holds the position of President Emeritus.
- ---------------------------------------------------------------------------------------
</TABLE>

4
<PAGE> 7
<TABLE>
<S> <C>

[PHOTO] REBECCA MARK-JUSBASCHE, 45
Director since 1999
Since July, 1998, Ms. Mark-Jusbasche has served as Chairman
and Chief Executive Officer of Azurix Corp., a global water
company formed by Enron in 1998. From May, 1998, until July,
1999, Ms. Mark-Jusbasche served as a Vice Chairman of Enron.
From January, 1996, until March, 1999, Ms. Mark-Jusbasche
served as Chairman of Enron International Inc. From January,
1996 until May, 1998, Ms. Mark-Jusbasche served as Chief
Executive Officer of Enron International Inc. From July,
1991 until March, 1998, she served as Chairman and Chief
Executive Officer of Enron Development Corp. Ms.
Mark-Jusbasche is a member of the Council on Foreign
Relations and The Chase Manhattan Corp. National Advisory
Board.
- ---------------------------------------------------------------------------------------

[PHOTO] JOHN MENDELSOHN, 63
Director since 1999
Since July, 1996, Dr. Mendelsohn has served as President of
the University of Texas M.D. Anderson Cancer Center. Prior
to 1996, Dr. Mendelsohn was Chairman of the Department of
Medicine at Memorial Sloan-Kettering Cancer Center in New
York. Dr. Mendelsohn is a director of ImClone Systems, Inc.
- ---------------------------------------------------------------------------------------

[PHOTO] JEROME J. MEYER, 62
Director since 1997
For over eight years, Mr. Meyer served as Chairman and Chief
Executive Officer of Tektronix, Inc., an electronics
manufacturer located in Wilsonville, Oregon. Currently, Mr.
Meyer serves as Chairman and as a director of Tektronix,
Inc. He is also a director of Standard Insurance Corp. and
Centerspan Communications, Inc.
- ---------------------------------------------------------------------------------------
</TABLE>

5
<PAGE> 8
<TABLE>
<S> <C>

[PHOTO] PAULO V. FERRAZ PEREIRA, 45
Director since 1999
For over five years, Mr. Pereira has served as President and
Chief Operating Officer of Meridional Financial Group and
Managing Director of Group Bozano. Mr. Pereira is the former
President and Chief Executive Officer of the State Bank of
Rio de Janeiro.
- ---------------------------------------------------------------------------------------

[PHOTO] FRANK SAVAGE, 61
Director since 1999
Since 1995, Mr. Savage has served as Chairman of Alliance
Capital Management International (a division of Alliance
Capital Management L.P.). Mr. Savage is also a director of
Lockheed Martin Corporation, Alliance Capital Management L.
P., Lyondell Chemical Corp. and Qualcomm Corp.
- ---------------------------------------------------------------------------------------

[PHOTO] JEFFREY K. SKILLING, 46
Director since 1997
Since January, 1997, Mr. Skilling has served as President
and Chief Operating Officer of Enron. From January, 1991
until December, 1996, he served as Chairman and Chief
Executive Officer of Enron North America Corp. and its
predecessor companies. Mr. Skilling is also a director of
Azurix Corp. and the Houston Branch of the Federal Reserve
Bank of Dallas.
- ---------------------------------------------------------------------------------------
</TABLE>

6
<PAGE> 9
<TABLE>
<S> <C>

[PHOTO] JOHN A. URQUHART, 71
Director since 1990
Mr. Urquhart serves as Senior Advisor to the Chairman of
Enron. From 1991 to 1998, Mr. Urquhart was a Vice Chairman
of Enron. Since August, 1991, Mr. Urquhart has also been
President of John A. Urquhart Associates, a management
consulting firm in Fairfield, Connecticut. He also serves as
a director of TECO Energy, Inc., Hubbell, Inc., The Weir
Group, plc and Catalytica Inc.
- ---------------------------------------------------------------------------------------

[PHOTO] JOHN WAKEHAM, 67
Director since 1994
Lord Wakeham is a retired former U.K. Secretary of State for
Energy and Leader of the Houses of Commons and Lords. He
served as a Member of Parliament from 1974 until his
retirement from the House of Commons in April, 1992. Prior
to his government service, Lord Wakeham managed a large
private practice as a chartered accountant. He is currently
Chairman of the Press Complaints Commission in the U.K. and
chairman or director of a number of publicly traded U.K.
companies. Lord Wakeham is also a director of Azurix Corp.
- ---------------------------------------------------------------------------------------

[PHOTO] HERBERT S. WINOKUR, JR., 56
Director since 1985
Mr. Winokur is Chairman and Chief Executive Officer of
Capricorn Holdings, Inc. (a private investment company) and
Managing General Partner of Capricorn Investors, L.P.,
Capricorn Investors II, L.P. and Capricorn Investors III,
L.P., partnerships concentrating on investments in
restructure situations, organized by Mr. Winokur in 1987,
1994, and 1999, respectively. Prior to his current
appointment, Mr. Winokur was Senior Executive Vice President
and a director of Penn Central Corporation. Mr. Winokur is
also a director of Azurix Corp., The WMF Group, Ltd., Mrs.
Fields' Holding Company, Inc., CCC Information Services
Group, Inc. and DynCorp.
- ---------------------------------------------------------------------------------------
</TABLE>

7
<PAGE> 10

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS

As of February 15, 2000, Enron knows of no one who beneficially owns in
excess of 5% of a class of Enron's Voting Stock except as set forth in the table
below:

<TABLE>
<CAPTION>
AMOUNT AND NATURE OF BENEFICIAL OWNERSHIP
---------------------------------------------------------------
SOLE
VOTING
SOLE SHARED AND
VOTING VOTING LIMITED
AND AND OR NO PERCENT
TITLE OF CLASS NAME AND ADDRESS INVESTMENT INVESTMENT INVESTMENT OF
OF STOCK OF BENEFICIAL OWNER POWER POWER POWER OTHER CLASS
- -------------- ------------------- ---------- ---------- ---------- ----- -------
<S> <C> <C> <C> <C> <C> <C>
Common Robert A. Belfer 8,431,967(1)(2) 138,731(3) 23,599(4)(5) 1.18
Preferred 767 Fifth Avenue
Convertible New York, NY 10153 214,580 4,627(6) 17.02
Common Janus Capital Corporation 59,411,555(7) 8.21
Preferred 100 Fillmore Street
Convertible Denver, CO 80206-4923
Common Mr. and Mrs. Lawrence Ruben 7,936,026(8) 2,543,857(9) 1.43
Preferred 600 Madison Avenue
Convertible New York, NY 10022 237,968(10) 46,097(11) 22.06
Common Jack Saltz 2,850,084(12) 1,625,815(13) *
Preferred 767 Fifth Avenue
Convertible New York, NY 10153 70,197 57,159(14) 9.89
Common Enron Corp. 17,237,322(15) 2.38
Preferred Savings Plan
Convertible 70,000(15) 5.44
</TABLE>

- ---------------

* Less than 1%.

(1) Includes 5,858,892 shares that would be acquired upon the conversion of the
Preferred Convertible Stock shown in the table as being beneficially owned
by Mr. Belfer with sole voting and investment power.

(2) Includes 25,728 shares of Common Stock that are subject to stock options
exercisable within 60 days after February 15, 2000, which number is
included in the number of shares shown as beneficially owned as of such
date.

(3) Includes 12,360 shares held by Mr. Belfer's wife and 35 shares owned by a
limited partnership in which Mr. Belfer is the grantor. Also includes
126,336 shares that would be acquired upon the conversion of the Preferred
Convertible Stock shown in the table as being beneficially owned by Mr.
Belfer with shared voting and investment power.

(4) Includes restricted shares of Common Stock held under Enron's 1991 Stock
Plan (the "1991 Stock Plan"). Participants in the 1991 Stock Plan have sole
voting power and no investment power for restricted shares awarded under
the 1991 Stock Plan until such shares vest in accordance with 1991 Stock
Plan provisions. After vesting, the participant has sole investment and
voting powers.

(5) Includes shares held under Enron's Savings Plan (the "Savings Plan").
Participants in the Savings Plan instruct the Savings Plan Trustee as to
how the participant's shares should be voted. Additionally, participants
have limited investment power with respect to shares in the Savings Plan.

(6) Includes 4,000 shares held by a charitable trust in which Mr. Belfer's son
is trustee; 625 shares held by Mr. Belfer's wife; and two shares held by a
trust in which Mr. Belfer is co-trustee, in all of which shares Mr. Belfer
disclaims beneficial ownership.

(7) Mr. Thomas H. Bailey, ten percent (10%) owner and President and Chairman of
Janus Capital Corporation, may be deemed the beneficial owner of the Janus
Capital Corporation shares because of such stock ownership and positions.

(8) Includes 25 shares held by Mrs. Ruben as trustee for their son and 122,400
shares held by Mrs. Ruben as trustee for a charitable trust. Also includes
6,497,478 shares that would be acquired upon the conversion of the
Preferred Convertible Stock.

(9) Includes 131,574 shares held by Mr. Ruben as co-trustee for his children;
641,560 shares held by Mr. Ruben as co-trustee for his nieces and nephews;
115,105 shares held by a trust in which Mr. Ruben is co-trustee; 59,186
shares held by a trust in which Mrs. Ruben is co-trustee; and 337,800
shares held by charitable foundations in which Mr. and Mrs. Ruben have no
pecuniary interest. Also includes 1,258,632 shares that would be acquired
upon the conversion of the Preferred Convertible Stock.

(10) Includes 44,807 shares held by Mrs. Ruben as trustee for her children and
3,600 shares held by Mrs. Ruben as trustee for a charitable trust.

(Notes continue on following page)
8
<PAGE> 11

(11) Includes 11,051 shares held by Mr. Ruben as co-trustee for his nieces and
nephews, in which shares Mr. Ruben has no pecuniary interest; 33,973 shares
held by a limited partnership in which Mrs. Ruben is a managing member of
the general partnership, but has no pecuniary interest; 73 shares held by a
limited liability company in which Mrs. Ruben is a managing member, but has
no pecuniary interest; and 1,000 shares held by charitable foundations in
which Mr. and Mrs. Ruben have no pecuniary interest.

(12) Includes 1,916,659 shares that would be acquired upon the conversion of the
Preferred Convertible Stock.

(13) Includes 5,250 shares held by Mr. Saltz's wife; 42,150 shares held by Mr.
Saltz's wife as trustee for their children and 17,746 shares held by a
charitable foundation in which Mr. Saltz has no pecuniary interest. Also
includes 1,560,669 shares that would be acquired upon the conversion of the
Preferred Convertible Stock.

(14) Includes 55,185 shares held by Mr. Saltz's wife as trustee for their
children and 1,974 shares held by a charitable foundation in which Mr.
Saltz has no pecuniary interest.

(15) Pursuant to the terms of the Savings Plan, shares allocated to employee
accounts are voted by the Savings Plan trustee as instructed by the
employees. If the trustee receives no voting directions from the respective
employees, then all such shares are to be voted by the trustee in the same
proportion as the allocated shares that are voted by employees. Includes
1,911,280 shares of Common Stock that would be acquired upon the conversion
of the Preferred Convertible Stock.

STOCK OWNERSHIP OF MANAGEMENT AND BOARD OF DIRECTORS AS OF FEBRUARY 15, 2000

<TABLE>
<CAPTION>
AMOUNT AND NATURE OF
BENEFICIAL OWNERSHIP
----------------------------------------
SOLE SHARED SOLE VOTING
VOTING VOTING AND LIMITED
AND AND OR NO PERCENT
INVESTMENT INVESTMENT INVESTMENT OF
TITLE OF CLASS NAME POWER(1) POWER(1) POWER(2)(3) CLASS
- -------------- ---- ---------- ---------- ------------ -------
<S> <C> <C> <C> <C> <C>
Enron Corp.
Common Stock Robert A. Belfer.......................... 8,431,967(4) 138,731(5) 23,599 1.18
Norman P. Blake, Jr. ..................... 45,946 180 *
Ronnie C. Chan............................ 12,424 *
John H. Duncan............................ 168,962 58,000 180 *
Joe H. Foy................................ 28,020 180 *
Mark A. Frevert........................... 1,073,444 64,443 *
Ken L. Harrison........................... 712,052 73,439 *
Stanley C. Horton......................... 494,360 3,607 37,898 *
Robert K. Jaedicke........................ 55,552 180 *
Kenneth L. Lay............................ 5,351,124 2,396,912(6) 267,486 1.10
Charles A. LeMaistre...................... 47,812 1,600 180 *
Rebecca Mark-Jusbasche.................... 523,328 31,358 *
John Mendelsohn........................... 1,648 *
Jerome J. Meyer........................... 11,600 *
Frank Savage.............................. 550 *
Jeffrey K. Skilling....................... 2,282,101 293,480 *
Joseph W. Sutton.......................... 1,148,488 908 130,795 *
John A. Urquhart.......................... 78,920 180 *
John Wakeham.............................. 14,112 321 *
Herbert S. Winokur, Jr. .................. 104,865 12,000(7) 180 *
All directors and executive officers as a
group (36 in number)...................... 29,110,253(4) 2,624,223(5) 1,681,099 4.47
Enron Corp.
Preferred Convertible
Stock Robert A. Belfer.......................... 214,580 4,627(8) 17.02
All directors and executive officers as a
group (36 in number)...................... 214,580 4,627 17.02
EOTT Energy
Partners, L.P.
Common Units Norman P. Blake, Jr. ..................... 1,000 *
John H. Duncan............................ 8,500 *
Stanley C. Horton......................... 10,000 *
Kenneth L. Lay............................ 5,000 *
All directors and executive officers as a
group (36 in number)...................... 19,500 5,000 *
</TABLE>

(Table continues on following page)
9
<PAGE> 12

- ---------------

* Less than 1%.

(1) The number of shares of Enron Common Stock subject to stock options
exercisable within 60 days after February 15, 2000, which number is
included in the number of shares shown as beneficially owned as of such
date, is as follows: Mr. Belfer, 25,728 shares; Mr. Blake, 32,288 shares;
Mr. Chan, 10,176 shares; Mr. Duncan, 41,088 shares, for which he has shared
voting and investment power for 38,160 of such shares; Mr. Foy, 2,928
shares; Mr. Frevert, 914,264 shares; Mr. Harrison, 660,285 shares; Mr.
Horton, 396,998 shares; Dr. Jaedicke, 39,088 shares; Mr. Lay, 5,534,145
shares, for which he has shared voting and investment power for 1,615,330
of such shares; Dr. LeMaistre, 33,728 shares; Ms. Mark-Jusbasche 395,017
shares; Dr. Mendelsohn, 1,648 shares; Mr. Meyer, 5,008 shares; Mr.
Skilling, 1,360,010 shares; Mr. Sutton, 941,515 shares; Mr. Urquhart,
63,728 shares; Lord Wakeham, 12,048 shares; Mr. Winokur, 33,728 shares; and
all directors and executive officers as a group (36 in number), 18,158,641
shares.

(2) Includes restricted shares of Enron Common Stock held under Enron's 1991
and 1994 Stock Plans (the "Plans") for certain individuals. Participants in
the Plans have sole voting power and no investment power for restricted
shares awarded under the Plans until such shares vest in accordance with
the Plans' provisions. After vesting, the participant has sole investment
and voting powers.

(3) Includes shares held under the Savings Plan and/or the Enron Corp. Employee
Stock Ownership Plan ("ESOP"). Participants in the Savings Plan instruct
the Savings Plan trustee as to how the participant's shares should be
voted. Additionally, participants have limited investment power with
respect to shares in the Savings Plan. Participants in the ESOP have sole
voting power and no investment power prior to distribution of shares from
the ESOP. Includes 2,591 shares held by the spouse of Mr. Horton, for which
he may be deemed to have shared voting and investment power. Total shares
held by the group includes 8,841 shares with shared voting power.

(4) Includes 5,858,892 shares that would be acquired upon the conversion of the
Preferred Convertible Stock shown in the table as being beneficially owned
by Mr. Belfer with sole voting and investment power.

(5) Includes 12,360 shares held by Mr. Belfer's wife and 35 shares owned by a
limited partnership in which Mr. Belfer is the grantor. Also includes
126,336 shares that would be acquired upon the conversion of the Preferred
Convertible Stock shown in the table as being beneficially owned by Mr.
Belfer with shared voting and investment power.

(6) Includes 482,200 shares held in a charitable foundation in which Mr. Lay
has no pecuniary interest.

(7) Shares held in a charitable foundation in which Mr. Winokur has no
pecuniary interest.

(8) Includes 4,000 shares held by a charitable trust in which Mr. Belfer's son
is trustee; 625 shares held by Mr. Belfer's wife and two shares held by a
trust in which Mr. Belfer is co-trustee, in all of which shares Mr. Belfer
disclaims beneficial ownership.

(9) Includes 15,500 shares held in trust in which Mr. Belfer's son or wife is
trustee or in which Mr. Belfer is trustee or a co-trustee and 3,000 shares
held by Mr. Belfer's wife.

(10) The number of shares of Azurix Corp. Common Stock subject to stock options
exercisable within 60 days after February 15, 2000, which number is
included in the number of shares shown as beneficially owned as of such
date, is as follows: Ms. Mark-Jusbasche, 500,000 shares; and all directors
and executive officers as a group (36 in number), 500,000 shares.

10
<PAGE> 13

BOARD OF DIRECTORS AND COMMITTEES

The Board of Directors held five regularly scheduled meetings and nine
special meetings during the year ended December 31, 1999. The Executive
Committee meets on a less formal basis and may exercise all of the powers of the
Board of Directors, except where restricted by Enron's bylaws or by applicable
law. During the year ended December 31, 1999, the Executive Committee met ten
times. The Executive Committee is currently composed of Messrs. Duncan
(Chairman), Belfer, Foy, Lay, LeMaistre, Skilling and Winokur.

The Board of Directors uses working committees with functional
responsibility in the more complex recurring areas where disinterested oversight
is required. The Audit and Compliance Committee serves as the overseer of
Enron's financial reporting, internal controls and compliance processes. At five
meetings during the year ended December 31, 1999, the Audit and Compliance
Committee met with the independent auditors, as well as, with Enron officers and
employees who are responsible for legal, financial and accounting matters. In
addition to recommending the appointment of the independent auditors to the
Board of Directors, the Audit and Compliance Committee reviews the scope of and
fees related to the audit, accounting policies and reporting practices, contract
and internal auditing and internal controls, compliance with Enron's policies
regarding business conduct and other matters as deemed appropriate. The Audit
and Compliance Committee is currently composed of Messrs. Jaedicke (Chairman),
Chan, Foy, Mendelsohn, Pereira, Wakeham and Dr. Gramm.

The Compensation and Management Development Committee's responsibility is
to establish Enron's compensation strategy and ensure that the senior executives
of Enron and its wholly owned subsidiaries are compensated effectively in a
manner consistent with the stated compensation strategy of Enron, internal
equity considerations, competitive practices and the requirements of appropriate
regulatory bodies. In meeting eight times during the year ended December 31,
1999, the Compensation and Management Development Committee also continued to
monitor and approve awards earned pursuant to Enron's comprehensive executive
compensation program, monitor Enron's employee benefit programs and review
matters relating to management development and management succession. The
Compensation and Management Development Committee is currently composed of
Messrs. LeMaistre (Chairman), Blake, Duncan, Jaedicke and Savage.

The Finance Committee serves as a monitor of Enron's finance activities. In
meeting five times during the year ended December 31, 1999, the Finance
Committee reviewed the financial plans and proposals of management, including
equity and debt offerings, changes in stock dividends and the equity repurchase
program, changes in the risk management policy, transaction approval process and
the policy for approval of guarantees, letters of credit, letters of indemnity,
and other support arrangements and recommending action with regard thereto to
the Board of Directors. The Finance Committee is currently composed of Messrs.
Winokur (Chairman), Belfer, Blake, Chan, Meyer, Pereira, Savage and Urquhart.

The Nominating and Corporate Governance Committee has oversight for
recommendations regarding the size of the Board of Directors, recruiting and
recommending candidates for election to the Board of Directors, monitoring the
Corporate Governance Guidelines for revision and compliance and periodic
evaluation of director independence and performance. This committee met five
times during the year ended December 31, 1999. The Nominating and Corporate
Governance Committee is currently composed of Messrs. Wakeham (Chairman),
Mendelsohn, Meyer and Dr. Gramm.

During the year ended December 31, 1999, each director attended at least
75% of the total number of meetings of the Board of Directors and the committees
on which the director served except Ms. Mark-Jusbasche.

11
<PAGE> 14

COMPENSATION OF DIRECTORS AND EXECUTIVE OFFICERS

DIRECTOR COMPENSATION

Each nonemployee director of Enron receives an annual service fee of
$50,000 for serving as a director. No additional fees are paid for serving on
committees, except that committee chairs receive an additional $10,000 annually.
Meeting fees are $1,250 for each Board of Directors meeting attended and $1,250
for each committee meeting attended. Total directors' fees paid in cash,
deferred under the Enron Corp. 1994 Deferral Plan (the "1994 Deferral Plan") or
received in a combination of phantom stock units and stock options in lieu of
cash under the Enron Corp. 1991 Stock Plan, as amended and restated effective
May 4, 1999 (the "1991 Stock Plan"), in 1999 were $1,172,191, or an average of
$86,829 per nonemployee director.

Directors are required to defer 50% of their annual service fee into the
Phantom Stock Plan of the 1994 Deferral Plan. In some countries, deferrals into
the 1994 Deferral Plan may create adverse tax consequences for the director. In
August, 1999, the Compensation and Management Development Committee (the
"Committee") approved a change such that upon notification by Enron management
of the applicable international tax laws, a director may receive an award of
phantom stock units under the 1991 Stock Plan in lieu of mandatory deferrals
into the Phantom Stock Account of the 1994 Deferral Plan. A change was
subsequently approved allowing Lord Wakeham to receive phantom stock units in
lieu of deferrals into the Phantom Stock Account, beginning with 50% of his
retainer earned on December 31, 1999, which resulted in a grant of 141 phantom
stock units with a value of $6,250. As long as Lord Wakeham does not revoke his
election, as of July 1 of each year, the Committee shall approve an award of
phantom stock units in a number determined by the Committee that will reflect
the value of such portion of the retainer fee that is waived by Lord Wakeham for
the calendar year. Such award of phantom stock units will fully vest on the
fifth anniversary of the date of grant.

Directors can elect to receive remaining fees in cash, defer receipt of
their fees to a later specified date under the 1994 Deferral Plan or receive
their fees in a combination of phantom stock units and stock options in lieu of
cash under the 1991 Stock Plan. Participants in the 1994 Deferral Plan may elect
to invest their deferrals among several different investment choices. During
1999, nine directors elected to defer fees under the 1994 Deferral Plan. Prior
to 1994, directors were able to defer their fees under Enron's 1985 Deferral
Plan, which continues to credit interest on account balances based on 150% of
Moody's seasoned corporate bond yield index with a minimum rate of 12%, which
for 1997, 1998 and 1999 was the minimum rate of 12%. One director elected to
receive stock in lieu of fees in a combination of phantom stock units and stock
options according to the terms of the 1991 Stock Plan. During 1999, each
nonemployee director received 560 phantom stock units (valued at $37.5938 per
unit on the date of grant) and options to purchase 8,240 shares (with an
exercise price of $37.5938 per share) according to the terms of the 1991 Stock
Plan.

The 1991 Stock Plan permits nonemployee directors whose ownership of Enron
Common Stock would result in a material conflict of interest for business,
employment, or professional purposes, to submit an opinion of counsel of such
fact to the Committee with a request that such nonemployee director not be
eligible to receive further grants under the 1991 Stock Plan and to forfeit all
outstanding grants made to such nonemployee director until such time as the
Committee is satisfied that such conflicts have been removed or no longer apply.
In December, 1998, Dr. Gramm provided to the Committee a written opinion of
counsel indicating that her continued participation in the 1991 Stock Plan could
be considered a conflict of interest; accordingly, she has chosen not to receive
further grants under the 1991 Stock Plan. Therefore, Dr. Gramm did not receive
stock options or phantom stock units in 1999. Instead, on behalf of Dr. Gramm,
Enron contributed $79,763 (value of phantom stock units and stock options) into
her Flexible Deferral Account under the 1994 Deferral Plan.

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<PAGE> 15

REPORT FROM THE COMPENSATION AND MANAGEMENT DEVELOPMENT COMMITTEE
REGARDING EXECUTIVE COMPENSATION

The Committee of the Board of Directors is responsible for developing the
Enron executive compensation philosophy. It is the duty of the Committee to
administer the philosophy and its relationship with the compensation paid to the
Chief Executive Officer (the "CEO") and each of the other senior executives.

The basic philosophy behind executive compensation at Enron is to reward
executive performance that creates long-term shareholder value. This
pay-for-performance tenet is embedded in each aspect of an executive's total
compensation package. Additionally, the philosophy is designed to promote
teamwork by tying a significant portion of compensation to business unit and
Enron performance. Base salaries, annual incentive awards and long-term
incentive awards are reviewed periodically to ensure consistency with Enron's
total compensation philosophy.

Total Compensation

All decisions regarding executive compensation are made based upon
performance as measured against pre-established objectives and competitive
practice as measured, utilizing multiple public and private compensation
surveys. Each year, Enron conducts an executive compensation study covering
executives in the top corporate and business unit positions. The Committee
utilizes the services of Towers Perrin, a consulting firm experienced in
executive compensation, to conduct the study. Compensation studies evaluate
total direct compensation which is defined as base salary, plus most recent
actual annual incentive earned, plus the estimated annualized present value of
long-term incentive grants.

Competitive compensation rates are developed using published and private
compensation survey sources. Data from the sources represent similar positions
in general industry and industry specific companies, as appropriate. For
example, pipeline industry data, where available, is blended with general
industry data for Enron Gas Pipeline Group business unit positions;
high-technology industry data is blended with general industry data for many
Enron Broadband Services positions; trading industry data is blended with
general and energy industry data for commercial positions in Enron North America
Corp. ("ENA") and Enron's international regions. Market data is reflective of
job level and job type and is aligned with corporate or business unit revenues.

Executives have the opportunity to earn at the 75th percentile or higher
level, subject to obtaining performance at the 75th percentile or higher. Higher
achievement provides higher value, while lesser performance decreases total
compensation. In order to assure that an executive's compensation is tied to
performance, more dollars of total compensation are placed at risk, tied to
Enron absolute performance and performance relative to the S&P 500 group of
companies.

Base Salary

Base salaries for all positions are targeted at the median of the
respective markets. The annual salary increase budget is set to maintain Enron's
market position. Base pay, as well as, other compensation components are also
reflective of individual performance.

Annual Incentive Awards

The primary objective of the Annual Incentive Plan is to promote
outstanding performance by Enron in absolute terms, as well as in comparison to
its peer companies. The Annual Incentive Plan is funded as a

13
<PAGE> 16

percent of recurring after-tax net income as approved by the Committee each
year. Payment is based upon Enron's performance against pre-established goals,
as well as business unit and individual performance.

Annual bonus payments are based upon Enron's performance measured against
the operating plan as approved by the Board of Directors. Key performance
criteria such as funds flow, return on equity, debt reduction, earnings per
share improvements, and other relevant factors are considered at the option of
the Committee. These criteria are weighted each year based upon priorities and
may be changed from year to year. A performance review report is presented to
the Committee in January. This report summarizes management's view regarding
whether, and to what extent, the key performance criteria were attained. The
performance review report also discusses any other significant but unforeseen
factors that positively or negatively affected Enron's performance. The
Committee verifies Enron's actual recurring after-tax net income, reviews
management's funding level recommendation and approves the resulting award fund.

In 2000, the Annual Incentive Plan will be provided for Section 16 officers
as defined by the Securities Exchange Act of 1934, as amended ("the Exchange
Act"), and will be funded as a percentage of recurring after-tax net income (not
to exceed five percent) as approved by the Committee and the shareholders and is
based upon company performance and competitive industry practice. Downward
adjustment of the fund is at the sole discretion of the Committee. However,
upward adjustment of the fund, over the formula-driven amount, is not allowed.
Since the performance goal of Enron is recurring after-tax net income, the fund
increases or decreases based on the earnings performance of Enron.

Business unit performance is measured against the appropriate business unit
annual plan. After the Board of Directors determines the overall funding level,
the Office of the Chairman determines the allocations for each operating group
based on performance. Individual payouts are based on business unit performance
and the employee's individual performance as determined through the Performance
Review Committee ("PRC") process. Generally, the Committee will review the
individual recommendations for key executives and the Office of the Chairman
will approve the recommendations for all other participants.

Long-Term Incentive Grants

Enron's long-term incentive program is designed to tie executive
performance directly to the creation of shareholder wealth. Accordingly, in
2000, awards will be made one-half in non-qualified stock options and the other
one-half in restricted stock with a performance accelerated vesting feature. The
value of an Enron stock option is based upon the value of Enron stock at the
time of the grant and other factors, including stock price volatility, dividend
rate, option term, vesting schedule, termination provisions and long-term
interest rates. A third-party compensation consultant derives the value, which
is approved by the Committee. Stock options are granted with a seven-year term,
25% vesting on date of grant and 25% vesting each anniversary date thereafter.
Restricted stock cliff vests four years from date of grant. However, vesting can
be accelerated based upon Enron's annual cumulative shareholder return relative
to the S&P 500.

Long-term incentive targets are set based on executive compensation survey
results and as approved by the Committee. Grants are determined based upon the
current PRC assessment. Grants are reviewed and approved by the Office of the
Chairman and also by the Committee for Section 16 officers. In the past, the
Committee has utilized other long-term compensation vehicles that they deemed
appropriate.

For 1999, long-term grants to corporate and certain operating company
executives consisted of stock options and performance based restricted stock.
Prior to 1999, Enron granted performance units to corporate and certain
operating company executives. The performance units compare Enron's total
shareholder return to peer group performance over a four-year period.

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<PAGE> 17

Chief Executive Officer Compensation

As part of an annual review, the Committee applies the executive
compensation philosophy to the total compensation package of the CEO and the
other senior executives. In 1999, Mr. Lay's base salary was $1,300,000. Mr. Lay
has not received a base salary increase since May 1, 1998. Since Mr. Lay's base
salary exceeds $1,000,000, base salary in excess of this amount is deferred into
Enron's 1994 Deferral Plan to preserve tax deductibility under Section 162(m).
(See "Compliance with Internal Revenue Code Section 162(m)" below).

In recognition of Enron's extremely strong performance during 1999 relative
to targeted recurring after-tax net income, Mr. Lay received a cash annual
incentive award of $3,900,000. The Committee determined the amount of the annual
incentive award taking into consideration the annual performance report
presented by management, which reflected an increase in total recurring
after-tax net income of 37% from the previous year, Enron's increase in earnings
per share of over 18%, and a total shareholder return of 57.3%, compared to 7.7%
for Enron's proxy peer group, 20.9% for the S&P 500 and 27% for the Dow Jones
Industrial Average. The Committee also considers market data provided by Towers
Perrin.

In January, 2000, Mr. Lay received a long-term incentive award consisting
of a grant of stock options, at market value on the date of grant, to acquire
769,235 shares, and a grant of 158,521 shares of restricted stock with
performance accelerated vesting features. The stock options have a seven-year
term and are 25% vested on the date of grant with 25% vesting on each
anniversary of the date of grant for three years. The restricted stock will vest
and be released on January 31, 2004. Accelerated vesting may occur if Enron's
total shareholder return exceeds S&P 500 performance.

In addition, the accelerated vesting provisions on Mr. Lay's December, 1996
and January, 1997 grants were triggered since Enron's total shareholder return
for 1999 was 274% higher than the 1999 S&P 500 performance versus the
performance hurdle of 120% of the S&P 500.

Mr. Lay received a cash payment of $1,218,750 under the Performance Unit
Plan for the 1996-1999 performance period. Payments are made under the
Performance Unit Plan if Enron's total shareholder return ranks sixth or greater
as compared to 11 industry peers, the S&P 500 and 90-day U.S. Treasury Bills for
the four-year performance period. During the measurement period from 1996-1999
Enron's return to its shareholders was 142.6% compared with an average of 78.2%
for industry peers, and 20.8% for 90-day U.S. Treasury Bills. This performance
earned Enron a ranking of second and therefore, the units had a value of $1.50.

Compliance with Internal Revenue Code Section 162(m)

Section 162(m) of the Internal Revenue Code of 1986, as amended (the
"Code"), generally disallows a tax deduction to public companies for
compensation over $1,000,000 paid to a company's CEO and four other most highly
compensated executive officers, as reported in its proxy statement. Qualifying
performance-based compensation is not subject to the deduction limit if certain
requirements are met. Enron has structured most aspects of the performance based
portion of the compensation for its executive officers (which includes stock
option grants, performance units and performance-based annual incentive awards)
in a manner that complies with the Code. The following plans were presented and
approved by shareholders at the Annual Meetings of Shareholders in the years as
indicated: the Amended and Restated 1991 Stock Plan (1994, 1997 and 1999), the
Amended and Restated Performance Unit Plan (1994 and 1995) and the Annual
Incentive Plan (1994 and 1999).

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<PAGE> 18

Summary

The Committee focuses on ensuring there is a strong link between the
success of the shareholder and the rewards of the executives. This success is
evidenced by the increase in shareholder value from 1990 to 1999, during which
time a shareholder who invested $100 in Enron Common Stock would have received
$789, or a 689% increase in value, compared to 423% for the S&P 500 and 262% for
industry peers. The Committee believes that with the present plan designs,
management will continue to strive to increase shareholder value.

Compensation and Management Development Committee

Charles A. LeMaistre (Chairman)
Norman P. Blake, Jr.
John H. Duncan
Robert K. Jaedicke
Frank Savage

COMPARATIVE STOCK PERFORMANCE

As required by applicable rules of the Securities and Exchange Commission
(the "SEC"), the graph below was prepared based upon the following assumptions:

1. $100 was invested in Enron Common Stock, the S&P 500 and the peer
group as referenced below on December 31, 1994.

2. The peer group investments are weighted based on the market
capitalization of each individual company within the peer group at
the beginning of each year and the trading activity of the stock of
each individual company during the year.

3. Dividends are reinvested on the ex-dividend dates.

The companies that comprise Enron's original peer group are as follows: BG
Group plc; BP Amoco Corporation (through January 4, 1999); The Coastal
Corporation; Columbia Energy Group; Consolidated Natural Gas Company; Duke
Energy Corporation; Dynegy Inc.; El Paso Energy Corporation; Occidental
Petroleum Corporation; Sonat Inc. (through October 25, 1999); and The Williams
Companies, Inc.

As a result of mergers and divestitures in 1998 and 1999, the following
peer group changes have been made: BP Amoco Corporation, due to its merger with
British Petroleum, has been replaced by PG&E Corporation; Sonat Inc., due to its
merger with El Paso Energy Corporation, has been replaced by The AES
Corporation.

Accordingly, the companies that comprise Enron's current peer group are as
follows: The AES Corporation; BG Group plc; The Coastal Corporation; Columbia
Energy Group; Consolidated Natural Gas Company; Duke Energy Corporation; Dynegy
Inc.; El Paso Energy Corporation; Occidental Petroleum Corporation; PG&E
Corporation; and The Williams Companies, Inc.

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<PAGE> 19

Although this method of calculating shareholder return differs from the
method that Enron uses for purposes of its Performance Unit Plan, it does
display a similar trend.

COMPARISON OF FIVE-YEAR CUMULATIVE TOTAL RETURN
Enron Corp., S&P 500 and Peer Group
(Performance Results Through December 31, 1999)

[PEFORMANCE GRAPH]

<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------------
1994 1995 1996 1997 1998 1999
- ----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Enron Corp. $100.00 $127.92 $147.81 $145.80 $204.17 $321.91
S&P 500 $100.00 $137.50 $169.47 $226.03 $290.22 $349.08
Peer Group - Original $100.00 $117.31 $139.47 $178.68 $217.06 $223.03
Peer Group - Current $100.00 $113.21 $128.45 $189.84 $210.27 $214.53
</TABLE>

On a ten-year basis, $100 invested in Enron Common Stock on December 31,
1989, would provide a return to shareholders of 689% through December 31, 1999
as compared to an investment in the S&P 500, which would yield a return of 423%,
or Enron's peer groups which would yield a return of 262% for the same time
period.

In July, 1999, Enron announced a 2-for-1 stock split which became effective
on August 13, 1999. All references to stock options and restricted stock in the
compensation tables, supporting footnotes, contracts and other transactions
sections reflect the 2-for-1 stock split.

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<PAGE> 20

EXECUTIVE COMPENSATION

The following table summarizes certain information regarding compensation
paid or accrued during each of Enron's last three fiscal years to Enron's Chief
Executive Officer and each of Enron's four other most highly compensated
executive officers (the "Named Officers"):

SUMMARY COMPENSATION TABLE

<TABLE>
<CAPTION>
ALL OTHER
ANNUAL COMPENSATION LONG-TERM COMPENSATION COMPENSATION
-------------------------------------- ----------------------------------------- ------------
OTHER RESTRICTED SECURITIES
ANNUAL STOCK UNDERLYING LTIP
NAME & PRINCIPAL SALARY BONUS COMPENSATION AWARDS OPTIONS/ PAYOUTS
POSITION YEAR $ $ ($)(1) ($)(2) SARS(#) ($)(3) ($)(4)
---------------- ---- ---------- ---------- ------------ ----------- ---------- ---------- ------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Kenneth L. Lay
Chairman of the Board 1999 $1,300,000 $3,900,000 $ 206,716 $ -- 1,300,000 $ -- $560,046
and Chief Executive 1998 $1,266,667 $3,150,000 $ 160,292 $ 3,883,503(5) 749,630(12) $ -- $554,904
Officer, Enron 1997 $1,200,000 $ 475,000 $ 228,847 $ -- 1,900,920(13) $ -- $545,264
Jeffrey K. Skilling 1999 $ 850,000 $3,000,000 $ 51,701 $ -- 1,000,000 $ -- $116,342
President and Chief 1998 $ 816,667 $2,250,000 $ 23,949 $ 1,764,544(5) 586,330(12) $ -- $114,055
Operating Officer, Enron 1997 $ 750,000 $ 450,000 $ 22,525 $10,230,268(6) 2,000,000(13) $ -- $107,673
1999 $ 626,942 $2,100,000 $ 43,044 $ 7,586,284(7) 597,580 $1,537,767 $762,168
Joseph W. Sutton 1998 $ 512,084 $1,212,250 $ 13,500 $ -- 548,780(14) $2,940,860 $116,088
Vice Chairman, Enron 1997 $ 442,709 $1,089,500 $ 8,100 $ 4,354,423(8) 570,966(8) $1,303,479 $ 47,415
Mark A. Frevert
Chairman and Chief 1999 $ 513,333 $1,300,000 $1,670,356 $ -- 201,905 $ -- $198,203
Executive Officer, Enron 1998 $ 458,337 $1,000,000 $ 612,258 $ 2,390,004(9) 697,550(9) $ -- $390,917
Europe, Ltd. 1997 $ 400,008 $1,000,000 $ 651,942 $ 2,057,545(10) 492,516(10) $ -- $289,267
Stanley C. Horton $ --
Chairman and Chief 1999 $ 513,333 $1,000,000 $ 15,000 $ 1,002,548(5, -- $ -- $ 7,078
Executive Officer, Enron 1998 $ 491,667 $ 700,000 $ 14,300 11) 91,260(12) $ -- $ 13,362
Gas Pipeline Group 1997 $ 461,667 $ 250,000 $ 19,537 $ -- 291,790(15) $ -- $ 1,103
</TABLE>

- ---------------

(1) Includes perquisites and other personal benefits if value is greater than
the lesser of $50,000 or 10% of reported salary and bonus. Personal plane
usage of $192,847, $107,548 and $159,344 has been reported for Mr. Lay in
1997, 1998 and 1999, respectively. Mr. Frevert is currently on an
expatriate assignment, and has received payments to cover additional tax
liabilities of $646,362, $600,258 and $1,655,088 in 1997, 1998 and 1999,
respectively. Also, Enron maintains three deferral plans for key employees
under which payment of base salary, annual bonus and long-term incentive
awards may be deferred to a later specified date. Under the 1985 Deferral
Plan, interest is credited on amounts deferred based on 150% of Moody's
seasoned corporate bond yield index with a minimum rate of 12%, which for
1997, 1998 and 1999 was the minimum rate of 12%. No interest has been
reported as Other Annual Compensation under the 1985 Deferral Plan for
participating Named Officers because the crediting rates during 1997, 1998,
and 1999 did not exceed 120% of the long-term Applicable Federal Rate
("AFR") of 14.38% in effect at the time the 1985 Deferral Plan was
implemented. Beginning January of 1996, the 1994 Deferral Plan credits
interest based on fund elections chosen by participants. Since earnings on
deferred compensation invested in third-party investment vehicles,
comparable to mutual funds, need not be reported, no interest has been
reported as Other Annual Compensation under the 1994 Deferral Plan during
1997, 1998 and 1999. Other Annual Compensation also includes cash
perquisite allowances and cash paid for benefits lost due to statutory
and/or plan earnings limits.

(2) The following is the aggregate total number of shares in unreleased
restricted stock holdings and their value as of December 31, 1999 for each
of the Named Officers: Mr. Lay, 136,114 shares valued at $6,040,059; Mr.
Skilling, 237,284 shares valued at $10,529,478; Mr. Sutton, 281,058 shares
valued at $12,471,949; Mr. Frevert, 57,278 shares valued at $2,541,712; and
Mr. Horton, 21,030 shares valued at $933,207. In accordance with the
provisions of the 1991 Stock Plan, in the event of a "change of control,"

(Notes continue on following page)
18
<PAGE> 21

outstanding grants of restricted stock shall become fully vested. Dividend
equivalents for all restricted stock awards accrue from date of grant and
are paid upon vesting.

(3) Reflects project completion bonus payments through the Enron Development
Corp. Project Participation Plan (the "Project Participation Plan").
Included for Mr. Sutton is a buyout payment of $147,200 in 1997,
representing buyout value for Mr. Sutton's Enron Power Corp. phantom
appreciation grant.

(4) The amounts shown include the value as of year-end 1997, 1998 and 1999 of
Enron Common Stock allocated during those years to employees' special
subaccounts under the Enron Corp. Employee Stock Ownership Plan and 1998
and 1999 matching contributions on employees' Enron Corp. Savings Plan
account. Included in 1997, 1998 and 1999 for Mr. Lay is $4,388, $5,109 and
$5,950, respectively, that is attributable to term life insurance coverage
pursuant to split-dollar life insurance arrangements. Also included in
1997, 1998 and 1999 for Mr. Lay is $275,877, $280,265 and $280,265,
respectively, which represents the remainder of the annual premium that was
provided in exchange for forfeiture by Mr. Lay of post-retirement executive
supplemental survivor benefits and executive supplemental retirement
benefits. Additionally, included in 1997, 1998 and 1999 for Mr. Lay is
$14,999, $16,170 and $17,340, respectively, of imputed income that is
attributable to a split-dollar life insurance premium of $250,000 (also
included) which is paid annually by Enron on a life insurance policy
already owned by Mr. Lay, with recovery of the cost of such premiums upon
Mr. Lay's death. Included in 1997, 1998 and 1999 for Mr. Skilling is a cash
payment by Enron of $107,673, $110,192 and $109,868, respectively,
attributable to term-life insurance coverage pursuant to a split-dollar
life insurance arrangement with recovery of the cost of such premiums upon
Mr. Skilling's death. Pursuant to Mr. Sutton's employment agreement, he
received a $750,000 contribution to his non-qualified deferral plan
account. Included in 1997, 1998 and 1999 for Mr. Frevert is $286,383,
$385,327 and $182,837, respectively, for allowances and other payments
relating to his foreign assignment.

(5) Represents performance-based restricted stock which was granted in 1998 in
lieu of performance units for the 1999-2002 performance period under the
Enron Corp. Long-Term Incentive Program. The shares will become vested and
will be released on January 31, 2002, however, vesting may be accelerated
such that 33 1/3% of the shares will vest and be released on January 31,
2000, January 31, 2001 and January 31, 2002, if earnings targets are
achieved in 1999, 2000 and 2001. Since all Enron business units achieved
net income targets for 1999, 33 1/3% of the shares vested on January 31,
2000.

(6) Pursuant to Mr. Skilling's employment agreement and with respect to a
promotion and contract extension, he received restricted shares that vest
33 1/3% on October 13, 1998, 33 1/3% on October 13, 1999 and 33 1/3% on
October 13, 2000.

(7) Pursuant to Mr. Sutton's employment agreement, he received 32,122
restricted shares on January 31, 1999 that vested 25% on the grant date,
and will vest 25% on each anniversary of the grant date. On October 11,
1999 he was awarded 167,878 restricted shares in recognition of his
promotion to Vice Chairman of Enron. Of those shares, 43,473 vest four
years following the grant date (but may be accelerated contingent upon
Enron's cumulative shareholder return relative to the S&P 500) and 124,405
shares vest in increments of 33 1/3% with vesting contingent upon Enron
stock reaching a closing price of $60, $68 and $75. The shares vested
33 1/3% on January 20, 2000, and 33 1/3% on January 21, 2000 (when Enron
stock reached a market price of $60 and $68, respectively) and 33 1/3% will
vest when Enron stock reaches $75 per share.

(8) Restricted stock and stock options were granted to Mr. Sutton as a buyout
of his fixed participation interests in the Project Participation Plan. The
restricted stock and stock options were to vest 20% at grant and 20% per
year on each anniversary of the grant date. In consideration of Mr.
Sutton's promotion and contract extension initiated during 1998, the
vesting schedule was revised such that the remaining 60% of the stock
options vested 50% on January 1, 1999 and 50% on January 1, 2000.

(9) Mr. Frevert's employment agreement, executed in June, 1998, provided for a
grant of 400,000 stock options and 97,056 restricted shares on August 10,
1998. Stock options vest 20% on the grant date and 20% on each December 31
thereafter and restricted shares vest 25% on the grant date and 25% on each
January 31 thereafter. Mr. Frevert was also granted 297,550 stock options
on December 31, 1998 which vest 20% on the grant date and 20% on each
anniversary of the grant date.

(10) Restricted stock (8,750 shares) and 79,440 stock options awarded to Mr.
Frevert on January 21, 1997 vested 100% on January 21, 2000. On August 11,
1997, he received a grant of 120,000 stock options that vested 33 1/3% on
the grant date and 33 1/3% on each anniversary of the grant date and
267,420 stock options that vest 20% on each December 31 following the grant
date.

(11) Mr. Horton received an award of 20,064 restricted shares on January 19,
1998, which vest 33 1/3% each on January 31, 1999, January 31, 2000 and
January 31, 2001, however, vesting could accelerate 100% on January 31,
1999 if in 1998 Enron exceeded its actual 1997 recurring diluted earnings
per share. Enron exceeded its financial objective and 100% of the shares
vested on January 31, 1999.

(12) Represents stock options awarded on January 5, 1998 (Mr. Skilling 205,130),
and January 19, 1998 (Mr. Lay, 158,980, Mr. Skilling 112,830), which vest
20% on grant date and vest 20% on each anniversary of the grant date. On
December 31, 1998, Mr. Lay, Mr. Skilling, and Mr. Horton received stock
options (590,650, 268,370 and 91,260, respectively), under the Enron Corp.
Long-Term Incentive Program which vest 25% on the grant date and 25% on
each anniversary of the grant date.

(13) On January 21, 1997, Mr. Lay and Mr. Skilling elected to receive, or
received on a mandatory basis, stock options in lieu of a portion of their
cash bonus payments (113,090 and 55,820, respectively). Stock options were
100% vested on the grant date. Mr. Lay's employment agreement provided for
a grant of 1,275,000 stock options on January 3, 1997. Twenty percent (20%)
vested

(Notes continue on following page)
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<PAGE> 22

on the date of grant and the remaining options vest on November 1, 2003,
however, vesting can be accelerated in one-third increments on the
remaining options if total shareholder return is at least 120% of the S&P
500 index on an annual basis and/or cumulative basis. The total shareholder
return for 1998 and 1999 was at least 120% of the S&P 500 performance,
therefore, 26.7% vested on December 31, 1998 and 26.7% vested on December
31, 1999. On December 31, 1997, Mr. Lay received 512,830 stock options
under the Enron Corp. Long Term Incentive Program for the 1998-2001
performance period that vest 20% on the grant date and 20% on each
anniversary of the grant date. However, in February, 2000, Mr. Lay's
employment agreement was amended and all unvested options related to the
December 31, 1997 grant vested. Mr. Skilling's employment agreement
provided for an award of 1,944,180 stock options and 526,316 restricted
shares which were granted on October 13, 1997. Stock options vested 20% on
the grant date and 20% on each anniversary of the grant date. The Committee
approved accelerated vesting such that 904,866 stock options vested on
February 7, 1999 and the remaining options vested as scheduled on October
13, 1999. Mr. Skilling's unrestricted shares vest 33 1/3% on each
anniversary of the grant date.

(14) Pursuant to the terms of Mr. Sutton's employment agreement on June 22, 1998
and with respect to a promotion and contract extension, he was granted
200,000 Enron stock options that vest 33 1/3% on May 4, 1999, May 4, 2000
and May 4, 2001 and 200,000 stock options that vest 25% on each anniversary
of the grant date. Mr. Sutton also received a grant of 148,780 stock
options on December 31, 1998 that vested 25% on December 31, 1999 and will
vest 25% on each anniversary of the grant date.

(15) On January 21, 1997, Mr. Horton received a grant for 25,120 stock options
which vested 100% on the grant date. On May 5, 1997, he received a grant of
200,000 stock options that vest 20% at grant, and 20% on each anniversary
of the grant date. He received an award on December 31, 1997 of 66,670
stock options that vest 20% at grant and 20% on each anniversary of the
grant date.

STOCK OPTION GRANTS DURING 1999

The following table sets forth information with respect to grants of stock
options pursuant to the Enron Corp. 1991 Stock Plan to the Named Officers
reflected in the Summary Compensation Table. No stock appreciation rights
("SARs") were granted during 1999.

<TABLE>
<CAPTION>
INDIVIDUAL GRANTS
------------------------------------
NUMBER
OF
SECURITIES POTENTIAL REALIZABLE VALUE AT
UNDERLYING % OF TOTAL ASSUMED ANNUAL RATES OF
OPTIONS/ OPTIONS/SARS EXERCISE STOCK PRICE APPRECIATION
SARS GRANTED TO OR BASE FOR OPTION TERM(1)
GRANTED EMPLOYEES IN PRICE EXPIRATION ------------------------------------------
NAME (#)(2) FISCAL YEAR ($/SH) DATE 0%(3) 5% 10%
---- ---------- ------------ -------- ---------- ----- --------------- ---------------
<S> <C> <C> <C> <C> <C> <C> <C>
Kenneth L. Lay........... 1,300,000(4) 3.77% $37.1875 12/13/09 $0 $ 30,403,125 $ 77,047,487
Jeffrey K. Skilling...... 1,000,000(4) 2.90% $41.0625 11/16/09 $0 $ 25,823,986 $ 65,443,050
Joseph W. Sutton......... 123,290(5) 0.36% $44.0625 8/9/06 $0 $ 2,211,559 $ 5,153,873
173,335(4) 0.50% $38.8750 10/11/06 $0 $ 2,743,205 $ 6,392,834
200,000(4) 0.58% $39.0000 11/19/06 $0 $ 3,175,383 $ 7,399,993
100,955(4) 0.29% $44.3750 12/31/09 $0 $ 2,817,371 $ 7,139,772
Mark A. Frevert.......... 201,905(6) 0.59% $44.3750 12/31/09 $0 $ 5,634,603 $ 14,279,190
All Employee and Director
Optionees.............. 34,446,667(7) 100% $38.1638(8) N/A $0 $ 2,141,370,466(9) $ 3,409,774,586(9)
All Shareholders......... N/A N/A N/A N/A $0 $44,480,621,930(9) $70,827,956,490(9)
Optionee Gain as % of
Gain................... N/A N/A N/A N/A N/A 4.81% 4.81%
</TABLE>

- ---------------

(1) The dollar amounts under these columns represent the potential realizable
value of each grant of options assuming that the market price of Enron
Common Stock appreciates in value from the date of grant at the 5% and 10%
annual rates prescribed by the SEC and therefore are not intended to
forecast possible future appreciation, if any, of the price of Enron Common
Stock.

(2) If a "change of control" (as defined in the 1991 Stock Plan) were to occur
before the options become exercisable and are exercised, the vesting
described below will be accelerated and all such outstanding options shall
be surrendered and the optionee shall receive a cash payment by Enron in an
amount equal to the value of the surrendered options (as defined in the 1991
Stock Plan).

(Notes continue on following page)
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<PAGE> 23

(3) An appreciation in stock price, which will benefit all shareholders, is
required for optionees to receive any gain. A stock price appreciation of 0%
would render the option without value to the optionees.

(4) In consideration of employment agreement extensions, the Committee approved
stock option awards for Mr. Lay and Mr. Skilling, which vest 25% on the
grant date and 25% on each anniversary of the grant date. Pursuant to his
agreement and in recognition of his increased responsibilities as Vice
Chairman of Enron, Mr. Sutton was awarded 173,335 stock options on October
11, 1999 and 200,000 stock options on November 19, 1999, which vest 25% on
the grant date and 25% on each anniversary of the grant date. In addition,
in accordance with the terms of his existing agreement, Mr. Sutton received
100,955 stock options on December 31, 1999 that vest 25% on each anniversary
of the grant date.

(5) This grant reflects the value paid out from the Project Participation Plan
in the form of stock options that vest 100% at the earlier of the date upon
which a transfer of the project occurs to an entity (including an Enron
entity) resulting in a decrease in Enron's aggregate direct and indirect
ownership interest in such project, or six months following the date on
which commercial operations commence (whichever is sooner), but not later
than December 31, 2002.

(6) Pursuant to the terms of his employment agreement, Mr. Frevert was awarded
stock options on December 31, 1999. Options vested 20% on the grant date,
and will vest 20% on each anniversary of the grant date.

(7) Includes options awarded on December 31, 1999 under the All Employee Stock
Option Program to employees hired during 1999.

(8) Weighted average exercise price of all Enron stock options granted to
employees in 1999.

(9) Appreciation for All Employee and Director Optionees is calculated using the
maximum allowable option term of ten years, even though in some cases the
actual option term is less than ten years. Appreciation for all shareholders
is calculated using an assumed ten-year option term, the weighted average
exercise price for All Employee and Director Optionees ($38.1638) and the
number of shares of Common Stock acquired and outstanding on December 31,
1999.

AGGREGATED STOCK OPTION/SAR EXERCISES DURING 1999 AND STOCK OPTION/SAR VALUES AS
OF DECEMBER 31, 1999

The following table sets forth information with respect to the Named
Officers concerning the exercise of SARs and options during the last fiscal year
and unexercised options and SARs held as of the end of the fiscal year:

<TABLE>
<CAPTION>
NUMBER OF SECURITIES VALUE OF UNEXERCISED
UNDERLYING UNEXERCISED IN-THE-MONEY
OPTIONS/SARS AT OPTIONS/SARS AT
SHARES DECEMBER 31, 1999 DECEMBER 31, 1999
ACQUIRED ON VALUE --------------------------- ----------------------------
NAME EXERCISE(#) REALIZED EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- ---- ----------- ----------- ----------- ------------- ------------ -------------
<S> <C> <C> <C> <C> <C> <C>
Kenneth L. Lay......... 1,926,770 $43,845,331 5,486,528 2,725,712 $130,228,958 $44,308,458
Jeffrey K. Skilling.... 2,359,448 $46,359,937 1,081,662 1,074,960 $ 20,154,469 $ 9,256,280
Joseph W. Sutton....... 100,000 $ 1,726,803 770,213 1,070,451 $ 15,788,963 $13,243,811
Mark A. Frevert........ 305,970 $ 5,517,450 865,133 632,678 $ 18,078,732 $ 9,337,383
Stanley C. Horton...... 290,080 $ 5,784,104 441,344 202,296 $ 10,115,077 $ 4,512,113
</TABLE>

RETIREMENT AND SUPPLEMENTAL BENEFIT PLANS

Enron maintains the Enron Corp. Cash Balance Plan (the "Cash Balance Plan")
which is a noncontributory defined benefit pension plan to provide retirement
income for employees of Enron and its subsidiaries. Through December 31, 1994,
participants in the Cash Balance Plan with five years or more of service were
entitled to retirement benefits in the form of an annuity based on a formula
that uses a percentage of final average pay and years of service. In 1995, the
Board of Directors adopted an amendment to and restatement of the Cash Balance
Plan changing the plan's name from the Enron Corp. Retirement Plan to the Enron
Corp. Cash Balance Plan. In connection with a change to the retirement benefit
formula, all employees became fully vested in retirement benefits earned through
December 31, 1994. The formula in place prior to January 1, 1995 was suspended
and replaced with a benefit accrual in the form of a cash balance of 5% of
annual base pay beginning January 1, 1996. Under the Cash Balance Plan, each
employee's accrued benefit will be credited

21
<PAGE> 24

with interest based on ten-year treasury bond yields. Directors who are not
employees are not eligible to participate in the Cash Balance Plan.

Enron also maintains a noncontributory employee stock ownership plan
("ESOP") which covers all eligible employees. Allocations to individual
employees' retirement accounts within the ESOP offset a portion of benefits
earned under the Cash Balance Plan prior to December 31, 1994. December 31, 1993
was the final date on which ESOP allocations were made to employees' retirement
accounts.

In addition, Enron has a supplemental retirement plan that is designed to
assure payments to certain employees of that retirement income that would be
provided under the Cash Balance Plan except for the dollar limitation on accrued
benefits imposed by the Code and a pension program for deferral plan
participants that provides supplemental retirement benefits equal to any
reduction in benefits due to deferral of salary into Enron's Deferral Plans.

The following table sets forth the estimated annual benefits payable under
normal retirement at age 65, assuming current remuneration levels without any
salary projection and participation until normal retirement at age 65, with
respect to the Named Officers under the provisions of the foregoing retirement
plans:

<TABLE>
<CAPTION>
ESTIMATED
CURRENT CREDITED CURRENT ESTIMATED
CREDITED YEARS OF COMPENSATION ANNUAL BENEFIT
YEARS OF SERVICE COVERED PAYABLE UPON
NAME SERVICE AT AGE 65 BY PLANS RETIREMENT
- ---- -------- --------- ------------ --------------
<S> <C> <C> <C> <C>
Kenneth L. Lay.................................. 22.9 30.2 $1,300,000 $475,488
Jeffrey K. Skilling............................. 9.4 28.3 $ 850,000 $285,033
Joseph W. Sutton................................ 7.5 20.2 $ 626,942 $115,972
Mark A. Frevert................................. 15.4 35.0 $ 513,333 $215,517
Stanley C. Horton............................... 26.0 41.1 $ 513,333 $233,111
</TABLE>

- ---------------

NOTE: The estimated annual benefits payable are based on the straight life
annuity form without adjustment for any offset applicable to a
participant's retirement subaccount in the ESOP.

Mr. Skilling participates in the Executive Supplemental Survivor Benefit
Plan (the "Survivor Benefit Plan"). Mr. Lay has waived his participation in lieu
of life insurance premiums. In the event of death after retirement, the Survivor
Benefit Plan provides an annual benefit to the participant's spouse equal to 50%
of the participant's annual base salary at retirement, paid for ten years. The
Survivor Benefit Plan also provides that in the event of death before
retirement, the participant's spouse receive an annual benefit equal to 30% of
the participant's annual base salary at death, paid for the life of the
participant's spouse (but for no more than 20 years in some cases). Mr. Lay has
an agreement which was entered into with Houston Natural Gas Corporation ("HNG")
for an annual benefit equal to 30% of his annual base salary upon death before
retirement, paid for the life of his spouse. In May, 1999, the Committee
approved a trade out of this benefit for an additional split-dollar life
insurance policy with premiums to commence in 2000.

SEVERANCE PLANS

Enron's Severance Pay Plan, as amended, provides for the payment of
benefits to employees who are terminated for failing to meet performance
objectives or standards or who are terminated due to reorganization or economic
factors. The amount of benefits payable for performance related terminations is
based on length of service and may not exceed six weeks of pay. For those
terminated as the result of reorganization or economic circumstances, the
benefit is based on length of service and amount of pay up to a maximum

22
<PAGE> 25

payment of 26 weeks of base pay. If the employee signs a Waiver and Release of
Claims Agreement, the employee may receive an additional severance benefit equal
to the severance benefit described above. Under no circumstances will the total
severance benefit paid under Enron's Severance Pay Plan exceed 52 weeks of pay.
Under Enron's Change of Control Severance Plan, in the event of an unapproved
change of control of Enron, any employee who is involuntarily terminated within
two years following the change of control will be eligible for severance
benefits equal to two weeks of base pay multiplied by the number of full or
partial years of service, plus one month of base pay for each $10,000 (or
portion of $10,000) included in the employee's annual base pay, plus one month
of base pay for each five percent of annual incentive award opportunity under
any approved plan. The maximum an employee can receive is 2.99 times the
employee's average W-2 earnings over the past five years.

EMPLOYMENT CONTRACTS

Mr. Lay entered into an employment agreement with Enron in December, 1996,
which, as amended, provides for a minimum salary of $1,300,000, and expires on
December 31, 2003. To preserve tax deductibility, any base salary in excess of
$1,000,000 must be deferred into Enron's 1994 Deferral Plan. Mr. Lay's
employment agreement provided for a grant of 1,275,000 stock options on December
9, 1996. Twenty percent (20%) was vested on the date of grant and the remaining
options vest on November 1, 2003, however, vesting can be accelerated in
one-third increments if total shareholder return is at least 120% of the S&P 500
index on an annual basis and/or cumulative basis. Enron's total shareholder
return for 1998 and 1999 was at least 120% of the S&P 500 performance,
therefore, 26.7% vested on December 31, 1998 and 26.7% vested on December 31,
1999. His agreement also provides for a split-dollar life insurance arrangement,
whereby Enron will pay five annual premiums of $250,000 on a life insurance
policy already owned by Mr. Lay, with recovery of the cost of such premiums upon
Mr. Lay's death. Benefits payable under Enron's Deferral Plans and the HNG
Deferral Plan in the event of Mr. Lay's termination of employment will be paid
as if Mr. Lay had retired from Enron, regardless of the reason for termination.
During 1999, Mr. Lay's $4,000,000 interest-bearing line of credit was paid in
full. Mr. Lay's agreement was amended and extended through December 31, 2003 and
in consideration for the contract extension, Mr. Lay received stock option
awards which are referenced in the Summary Compensation and the Stock Option
Grants During 1999 tables. In connection with amending Mr. Lay's agreement, he
will have a three-year period to exercise stock options for a grant received on
December 29, 1995 in the event of his retirement, death or disability. In the
event of his termination for any reason (except termination for cause), Mr. Lay
will receive amounts prescribed in the agreement, offset against amounts payable
under the severance plan maintained by Enron, through the term of the agreement.
If severance remuneration payable under the agreement is held to constitute an
"excess parachute payment" and Mr. Lay becomes liable for any tax penalties
imposed thereon, Enron will make a cash payment to him in an amount equal to the
tax penalties plus an amount equal to any additional tax for which he will be
liable as a result of receipt of the payment for such tax penalties and payment
for such reimbursement for additional tax. The employment agreement contains
noncompete provisions in the event of Mr. Lay's termination of employment.

Mr. Skilling entered into an employment agreement with Enron in January,
1996, which, as amended, provides for a minimum annual salary of $750,000 and
expires on December 31, 2003. In October, 1997, the employment agreement was
amended to provide for a $4,000,000 loan to Mr. Skilling, of which $2,000,000
was repaid during 1999. The remaining loan will be forgiven if Mr. Skilling
fulfills all the duties and responsibilities under his employment agreement
through December 31, 2001 or is involuntarily terminated prior to December 31,
2001. Total accrued interest on the loan in 1999 was $186,479, calculated at an
average

23
<PAGE> 26

interest rate of 6.24% (the 1997 mid-term AFR), and such interest has been
repaid by Mr. Skilling. As an additional benefit to Mr. Skilling, Enron pays a
portion of the annual premiums associated with a split-dollar life insurance
policy (for 1999, Enron paid $109,868). The policy is owned by Mr. Skilling, and
upon his death Enron will recover the cost of premium payments. This benefit
generates no imputed income for Mr. Skilling, as he contributes an amount equal
to the annual cost of current life insurance as measured by the insurer's
current minimum premium rate for standard risks. The agreement was amended and
extended through December 31, 2003 and in consideration for the contract
extension, provides for stock option awards which are referenced in the Summary
Compensation and the Stock Option Grants During 1999 tables. Further, the
amendment stipulates that in the event of involuntary termination, death, or
disability, Mr. Skilling will receive amounts prescribed in the agreement,
offset against amounts payable under the severance plan maintained by Enron,
through the term of the agreement as well as full vesting of all outstanding
stock options and restricted stock awards (with the exception of stock options
granted on November 16, 1999) as disclosed in the Summary Compensation and Stock
Option Grants During 1999 tables. Additionally, the amended agreement stipulates
that if severance remuneration payable under the agreement is held to constitute
an "excess parachute payment" and Mr. Skilling becomes liable for any tax
penalties imposed thereon, Enron will make a cash payment to him in an amount
equal to the tax penalties plus an amount equal to any additional tax for which
he will be liable as a result of receipt of the payment for such tax penalties
and payment for such reimbursement for additional tax. The employment agreement
contains noncompete provisions in the event of Mr. Skilling's termination of
employment.

Mr. Sutton entered into an employment agreement with Enron in June, 1998,
which, as amended, provides for a minimum annual salary of $700,000 and expires
on June 30, 2003. In accordance with the terms of his existing contract, he will
receive annual grants of stock options with a value of $1,060,000 on each
December 31, 2000 and December 31, 2001. He received restricted shares with a
value of $1,060,000 on January 31, 2000 and he will receive restricted shares
with a value of $1,060,000 on January 1, 2001, January 1, 2002 and January 1,
2003. Restricted stock grants are conditioned on Enron meeting at least 80% of
its after-tax net income targets for calendar years 1999-2002. Such 80% target
is a cumulative percentage over the five-year period (1998-2002) so that if an
80% target is not met for any single year during the 1998-2002 period, Mr.
Sutton may become eligible to receive such grant for such a missed year if the
cumulative average of such 80% targets for such missed year and prior or
subsequent years during the period meets or exceeds the cumulative 80% targets.
Shares will vest 25% on the grant date and 25% on each anniversary of the grant
date. The agreement was amended and extended through June 30, 2003 and provides
for stock options and restricted stock awards which are referenced in the
footnotes following the Summary Compensation and the Stock Option Grants During
1999 tables. On each January 31, 2001 through 2003, he will receive 173,335
stock options and 43,473 restricted shares. In January, 2000, he received an
award of 25,595 restricted shares, which vested 33 1/3% when Enron stock reached
$60 and $68 per share, respectively, and will vest 33 1/3% if Enron stock
reaches $75 per share. Further, the amended agreement provides that on each
February 15 of calendar years 2000-2003, Enron will contribute $500,000 to Mr.
Sutton's 1994 Deferral Plan account. In the event of his involuntary
termination, Mr. Sutton will receive amounts prescribed in the agreement through
the term of the agreement and beyond, and full vesting of all outstanding grants
of stock options and restricted shares such that all unvested shares will become
fully vested upon involuntary termination. The employment agreement contains
noncompete provisions in the event of Mr. Sutton's termination of employment.

Mr. Frevert entered into an employment agreement with Enron in June, 1998,
that provides for a minimum annual salary of $500,000 and expires on May 31,
2001. Mr. Frevert received stock option and restricted stock awards pursuant to
his agreement (see footnotes following the Summary Compensation and the Stock
Option Grants During 1999 tables). In the event of his involuntary termination,
Mr. Frevert will

24
<PAGE> 27

receive amounts prescribed in the agreement through the term of the agreement.
The employment agreement contains noncompete provisions in the event of Mr.
Frevert's termination of employment.

Mr. Horton entered into an agreement with Enron in October, 1996, which, as
amended, provides for a minimum annual salary of $520,000 and expires on July
31, 2002. Pursuant to the terms of the agreement, Mr. Horton will receive stock
options and restricted stock in January, 2000, January, 2001 and January, 2002
with a grant value totaling $2,000,000 for each year (to be delivered 50% in
options and 50% in restricted shares). In the event of his involuntary
termination, Mr. Horton will receive amounts prescribed in the agreement through
the term of the agreement and beyond. The employment agreement contains
noncompete provisions in the event of Mr. Horton's termination of employment.

CERTAIN TRANSACTIONS

Effective August 1, 1991, Enron, Enron Power Corp. (a wholly owned
subsidiary of Enron) and John A. Urquhart entered into a Consulting Services
Agreement which has been amended several times, the latest of such amendments
was effective as of January 1, 2000, to provide for an extension of the
agreement through December 31, 2000. Pursuant to the terms of the agreement, Mr.
Urquhart serves as Senior Advisor to the Chairman and consults with Enron
regarding the development and implementation of an integrated strategic
international business plan and other matters concerning international business
and operations. The amendment provides for a retainer fee of $33,075 per month
for providing up to 90 days of consulting services annually and a daily rate of
$4,410 for days in excess of 90 days annually. In August, 1995, the agreement
was amended to provide for a grant of 100,000 Enron phantom stock options at a
grant price equal to the December 29, 1995, Enron closing stock price, or
$19.0625. The phantom shares vested 50% on June 29, 1996, and 50% on December
29, 1996, and were to expire on December 31, 1998. With the extension of Mr.
Urquhart's Consulting Services Agreement through December 31, 2000, the
expiration date of the 100,000 Enron phantom stock options granted on December
29, 1995 was extended to December 31, 2001. Mr. Urquhart is reimbursed for all
reasonable out-of-pocket expenses incurred in performing services under the
agreement. The services to be performed by Mr. Urquhart pursuant to the
Consulting Services Agreement do not include, and are in addition to, his duties
as a director of Enron, and the above compensation is in addition to the
remuneration payable to Mr. Urquhart as a member of the Board of Directors of
Enron. During 1998 and 1999, Enron paid Mr. Urquhart $410,106 and $531,710,
respectively, for services rendered (including reimbursement of expenses) under
the Consulting Services Agreement.

Mr. Urquhart was a director of Enron Renewable Energy Corp. ("EREC") until
his resignation on February 23, 2000. On January 2, 1997, Mr. Urquhart was
awarded options to purchase 67,495 shares of EREC common stock at a grant price
of $15.00, granted in tandem with options to purchase 47,500 shares of Enron
Common Stock at an exercise price of $21.31, both of which were awarded at fair
market value on the date of grant. The options became 20% vested on the date of
grant and were to vest 20% on each anniversary of the date of grant through
January 2, 2001. As a result of EREC's recent merger with another subsidiary of
Enron, an election event has occurred under the EREC Stock Plan. Accordingly,
Mr. Urquhart is required to make an election by April 7, 2000, to either retain
his tandem grants of Enron stock options or receive a cash payment for 100% of
his vested and unvested EREC stock options. The cash-out of the EREC options or
the retention of the Enron options will cancel the tandem options with respect
to the other security.

Effective September 30, 1996, a monthly retainer of $6,000 was approved for
payment to Lord John Wakeham in consideration of his services to Enron and its
affiliates relating to his advice and counsel on matters relating specifically
to European business and operations. The services to be performed by Lord

25
<PAGE> 28

Wakeham pursuant to this monthly retainer arrangement do not include and are in
addition to his duties as a director of Enron and the above compensation is in
addition to the remuneration payable to Lord Wakeham as a member of the Board of
Directors of Enron. For the year 1999, Enron paid Lord Wakeham $72,000 for
services rendered to Enron Europe Limited.

Enron Property & Services Corp., a subsidiary of Enron, and Lay/Wittenberg
Travel Agency in the Park, Inc. ("TAP") are parties to an Agreement for Services
under which TAP provides travel arrangements for Enron and its affiliates'
employees. The agreement will expire on March 31, 2001. TAP is owned 50% by
Sharon Lay, sister of Kenneth L. Lay, Chairman of the Board and Chief Executive
Officer of Enron. During 1999, TAP received net revenue in the amount of
$245,359 attributable to Enron employee travel.

Herbert S. Winokur, Jr., a director of Enron, is affiliated with National
Tank Company ("NATCO"), a privately owned company that is a provider of wellhead
equipment, systems and services used in the production of oil and gas. During
the calendar years ended December 31, 1997, 1998 and 1999, NATCO recorded
revenues of $1,035,000, $643,793 and $535,682, respectively, from sales to
subsidiaries of Enron of oilfield equipment, services and spare parts in the
ordinary course of business on terms that Enron believes are no less favorable
than the terms of similar arrangements with third parties. Mr. Winokur's
affiliation with NATCO arises out of his indirect management of two funds that
own NATCO's indirect parent. In addition, Mr. Winokur is a minority limited
partner of such funds. Enron believes that its subsidiaries and NATCO will
continue to enter into similar arrangements throughout 2000.

In June, 1999, Enron entered into a series of transactions involving a
third party and LJM Cayman, L.P. ("LJM1"). LJM1 is a private investment company
that primarily engages in acquiring or investing in energy and communications
related investments. Andrew S. Fastow, Executive Vice President and Chief
Financial Officer of Enron, is the managing member of LJM1's general partner.
The general partner of LJM1 is entitled to receive a percentage of the profits
of LJM1 in excess of the general partner's proportion of the total capital
contributed to LJM1, depending upon the performance of the investments made by
LJM1. The effect of the transactions was (i) Enron and the third party amended
certain forward contracts to purchase shares of Enron Common Stock, resulting in
Enron having forward contracts to purchase Enron Common Stock at the market
price on that day, (ii) LJM1 received 6.8 million shares of Enron Common Stock
subject to certain restrictions and (iii) Enron received a note receivable and
certain financial instruments hedging an investment held by Enron. Enron
recorded the assets received and equity transferred at estimated fair value. In
connection with the transactions, LJM1 agreed that Mr. Fastow would have no
pecuniary interest in such Enron Common Stock and would be restricted from
voting on matters related to such shares. LJM1 repaid the note receivable in
December, 1999. Management believes that the terms of the transactions were
reasonable and no less favorable than the terms of similar arrangements with
unrelated third parties.

In the second half of 1999, Enron entered into eight transactions with LJM1
and LJM2 Co-Investment, L.P. ("LJM2"). LJM2 is a private investment company that
primarily engages in acquiring or investing in energy and communications related
investments. Mr. Fastow is the managing member of LJM2's general partner. The
general partner of LJM2 is entitled to receive a percentage of the profits of
LJM2 in excess of the general partner's proportion of the total capital
contributed to LJM2, depending upon the performance of the investments made by
LJM2. In six of these transactions, LJM1 and/or LJM2 acquired various debt and
equity securities of certain Enron subsidiaries and affiliates that were
directly or indirectly engaged in the domestic and/or international energy
business. The aggregate consideration agreed to be paid to Enron pursuant to
these six transactions was approximately $119.3 million. In the seventh
transaction, LJM2 paid $12.9 million for an equity interest in an Enron
securitization vehicle (that owned approximately $300 million of merchant
assets) and loaned $19.6 million to such vehicle. In the eighth transaction,
LJM2

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<PAGE> 29

borrowed $38.5 million from an Enron affiliate, which loan was outstanding at
year end. These transactions occurred in the ordinary course of Enron's business
and were negotiated on an arm's length basis with senior officers of Enron other
than Mr. Fastow. Management believes that the terms of the transactions were
reasonable and no less favorable than the terms of similar arrangements with
unrelated third parties.

COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION

During 1996, Belco Oil & Gas Corp. ("BOGC") entered into natural gas and
crude oil commodity swap agreements and option agreements with ENA. BOGC is a
publicly traded corporation, approximately 77% of the outstanding common stock
of which is owned by Robert A. Belfer and members of his family. These
agreements were entered into in the ordinary course of business of ENA and are
on terms that ENA believes are no less favorable than the terms of similar
arrangements with third parties. Pursuant to the terms of these agreements, in
1999, ENA received from BOGC a net amount of approximately $5,180,000 in
settlement and paid to BOGC an approximate net amount of $1,115,000 in option
premiums. The amount of future payments (as well as whether payments are made by
ENA to BOGC or vice versa) is affected by fluctuations in energy commodity
prices. Enron believes that BOGC and ENA will continue to enter into similar
arrangements throughout 2000.

SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE

Section 16(a) of the Exchange Act requires Enron's officers, directors and
persons who own more than 10% of the Common Stock or the Preferred Convertible
Stock to file with the SEC reports of ownership and changes in ownership
concerning the Common Stock or the Preferred Convertible Stock and to furnish
Enron with copies of all Section 16(a) forms they file. Based upon Enron's
review of the Section 16(a) filings that have been received by Enron, Enron
believes that all filings required to be made under Section 16(a) during 1999
were timely made, except that Ronnie C. Chan did not timely file one report
containing two transactions, and Frank Savage did not timely file one report
containing one transaction.

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<PAGE> 30

ITEM 2.

RATIFICATION OF APPOINTMENT OF AUDITORS

Pursuant to the recommendation of the Audit and Compliance Committee, the
Board of Directors appointed Arthur Andersen LLP, independent public
accountants, to audit the consolidated financial statements of Enron for the
year ending December 31, 2000.

The appointment of Arthur Andersen LLP as auditors of Enron will be
ratified at the Annual Meeting if the number of votes cast in favor of
ratification exceeds the number of votes cast opposing it. Under Oregon law,
abstentions and broker non-votes will not be counted for or against this
proposal.

The shares represented by the proxies solicited by the Board of Directors
will be voted as directed on the form of proxy or, if no direction is indicated,
will be voted "FOR" ratification of Arthur Andersen LLP as the auditors of
Enron.

In the event the appointment is not ratified, the Board of Directors will
consider the appointment of other independent auditors. A representative of
Arthur Andersen LLP is expected to be present at the Annual Meeting of
Shareholders on May 2, 2000, and will be available to respond to appropriate
questions.

THE BOARD OF DIRECTORS RECOMMENDS VOTING "FOR" THIS PROPOSAL.

ITEM 3.

SHAREHOLDER PROPOSAL FROM BRENT BLACKWELDER, PRESIDENT,
FRIENDS OF THE EARTH ACTION

PROPOSAL:

The shareholders request that the Board of Directors prepare a report, at
reasonable cost and omitting proprietary information, analyzing the biodiversity
and human rights impacts of Enron's operations worldwide, with an eye towards
developing policies addressing these issues.

STATEMENT OF SUPPORT:

As an international energy company with operations in environmentally and
politically sensitive areas, issues such as environment and human rights are
critical to Enron from a regulatory, business, and ethical perspective. We
believe that without a clear understanding of important environmental and human
rights issues, our company may expose itself to unnecessary risks, endanger its
reputation as an environmental leader, and pass up the opportunities, financing
and recognition that responsible corporate citizenship provides.

Enron recognizes the growing international concern over climate change, and
is expanding its wind energy business, a move that positions our company well
for the future. Enron's leadership in this sector has earned accolades from
environmental groups, while creating business and shareholder benefits. For
example, when Patagonia, Inc. decided to source 100% of its electricity from
wind energy, Enron won the contract to provide the retailer with its California
energy needs. (Patagonia press release, 7/6/98)

We welcome Enron's commitment to climate change, but we do not believe that
Enron has yet demonstrated an understanding of and a policy commitment towards
other important issues, such as biodiversity and human rights.

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In one case, Enron relocated a proposed wind farm to minimize potential
threats to the endangered California condor. (National Audubon Society press
release 11/3/99)

But in another highly controversial project, Enron routed a gas pipeline
through tropical forests in Bolivia. Twenty-five members of Congress wrote to
the U.S. Overseas Private Investment Corporation ("OPIC") opposing Enron's
project. Meanwhile, media such as the Financial Times ("Pipelines under fire,"
03/09/99) and Latin America Regional Reports ("Enron Struggles to Allay
Environmental Objections," 06/22/99) covered the controversy. Eventually, Enron
received OPIC financing for this pipeline, but only after OPIC twice delayed
their decision to study environmental issues.

With respect to human rights, Human Rights Watch published a 1999 report,
The Enron Corporation: Corporate Complicity in Human Rights Violations. This
report chronicled the development of the Dahbol power project, which was
cancelled in 1995 due to political opposition, and renegotiated in 1996.
According to Human Rights Watch, Indian activists and representatives of
villager's associations organized to oppose the project and were subjected to
human rights abuses.

Similarly, the newswire InterPress Service detailed community opposition to
Enron's above mentioned Bolivia pipeline ("Locals Fight Pipeline in Unique
Forest" 7/26/99). We believe the lack of local participation in natural resource
decisions contributed to the controversies and delays surrounding these two
projects.

We believe that by developing a clear understanding of and policies
governing broader environmental and human rights issues, Enron could:

- help ensure public financing for our company's projects in the future,

- reduce political and environmental risks of proposed projects,

- help preserve its reputation as an environmental leader, and

- avail itself of new business opportunities.

ENRON'S RESPONSE TO SHAREHOLDER PROPOSAL FROM
BRENT BLACKWELDER, PRESIDENT, FRIENDS OF THE EARTH ACTION

Enron is committed to the protection of human rights and the environment
wherever Enron operates. Accordingly, our Board of Directors and senior
management have taken key steps to ensure that the appropriate policies exist
and are effectively implemented, managed, and monitored. For example, the Board
of Directors has taken a leadership role in adopting a Human Rights Policy, as
well as a Statement of Environmental, Health, and Safety Principles. These
principles emphasize adherence to internationally recognized human rights, as
well as the importance of environmental protection, especially in regions where
laws and/or respect for these principles may be deficient. These principles also
are distributed to our employees and serve as a guide for the conduct of our
employees wherever they may work. Enron also has appointed a task force of
senior management team members whose mission is to launch a formalized corporate
responsibility program.

Because Enron strives to make a positive impact in the communities in which
it operates, Enron is dedicated to engaging in constructive dialogue with
affected and interested parties including shareholders, customers, employees,
society, and business partners. Further Enron is committed to measuring,
assessing, and enhancing our human rights, biodiversity, and overall
sustainability performance. In addition, Enron

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currently is evaluating the most appropriate and effective method for
strengthening its current communication efforts with respect to human rights and
environmental performance.

Because of Enron's dedication to principled business leadership, it has
taken proactive steps to address concerns about its activities at Cuiaba and
Dabhol, respectively. For instance, from the inception of the Cuiaba pipeline
project, Enron worked with local and global organizations and project partners
to apply and adhere to certain principles guiding it's conduct in the community.
These principles include (1) a commitment to sustainable development, (2) the
implementation of a high quality mitigation plan to address the areas directly
impacted by the pipeline right-of-way, (3) a commitment to work with the
Bolivian government, OPIC, indigenous organizations, and environmental
organizations, and (4) an invitation to interested and affected parties to
monitor our activities and provide recommendations to make this project a
success for all parties involved. With respect to Enron's activities in India,
Enron does not tolerate human rights abuses by employees or contractors. While
Enron respects the mission of Human Rights Watch, Enron does not feel that its
report on the Dabhol Power Project is accurate. The report refers to peaceful
protests, when, in fact, the reason the police were positioned near our site is
that there have been many acts of violence against our employees and
contractors. In addition, Enron feels that it's efforts to develop positive
relations with the community were not reflected in the report.

While Enron respects the intent of the Friends of the Earth Action
proposal, Enron believes that its current policies and practices, as well as its
future plans to strengthen our corporate responsibility initiative reflect
Enron's attention and dedication to these issues. Enron maintains that it
already has policies in place and will continue to develop policies addressing
these issues, and is currently fulfilling the spirit and intent of the proposal.

THE BOARD OF DIRECTORS RECOMMENDS VOTING "AGAINST" THIS PROPOSAL.

ITEM 4.

SHAREHOLDER PROPOSAL FROM DR. JULIA M. WERSHING

WHEREAS top executives receive considerable increases in compensation
packages even when stockholder return is mediocre or poor.

WHEREAS comparison with compensation packages for officers of other
companies, regardless of comparative performances, is a poor criteria for
determining executive pay.

WHEREAS share or option grants act more as a bonus than as an effective
incentive to performance.

WHEREAS excessively high stock option grants, LTIP's and SAR's tend to
dilute stockholder value and disenfranchise the small stockholder.

WHEREAS performance soars when executive pay is based on strict
shareholder-value measures, according to a PricewaterhouseCoopers study as
quoted in the August 1999 issue of Director's Alert. Directors basing executive
pay on strict shareholder-value measures saw a 48% annual return over the past 3
years, the study reports. That's more than double the 22.3% return of the
Standard & Poor's 1500 Super Index over the same period.

RESOLVED total executive compensation (including base salary, bonuses,
other annual compensation, restricted or unrestricted stock awards, stock
options, LTIP's, SAR's, etc.) be related directly to shareholder return and any
existing executive compensation plan be amended accordingly, and further

RESOLVED that executives' total compensation be reduced in proportion to a
decrease in shareholder return.

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<PAGE> 33

ENRON'S RESPONSE TO SHAREHOLDER PROPOSAL FROM DR. JULIA M. WERSHING

The Board of Directors believes the proposal submitted by Dr. Wershing is
inaccurate as it relates to the Company's executive compensation programs and
implies deficiencies in the Company's policies that do not exist. The proposal
is also too vague to serve as an appropriate subject for shareholder action,
since it does not specify the components of performance that would be employed
to determine "total shareholder return". The Company's executive compensation
policies and practices already provide for a direct linkage between the
Company's performance for its shareholders and executive compensation, as is
thoroughly explained in the Report from the Committee.

In order to assure that executive compensation is tied to performance, a
majority of total compensation is placed at risk, tied both to Enron absolute
performance relative to operating and financial targets and to Enron stock price
performance relative to the S&P 500 group of companies. The Committee believes
that the present plan design assures that management will continue to strive to
increase shareholder value and that no fundamental changes to the existing
arrangements are necessary. The Committee also believes the appropriateness of
its current compensation plan design is evidenced by the consistent increase in
shareholder value from 1990 to 1999, during which time a shareholder who
invested $100 in Enron Common Stock would have received $789 in share price
appreciation including dividends, or a 689% increase in value, compared to share
price appreciation including dividends of 423% for the S&P 500 and 262% for
industry peers, respectively. From 1999 performance, Enron's share price
appreciation was 58% as compared to 21% and 7% for the S&P 500 and industry
peers, respectively. Enron's outstanding shareholder return is also evidenced by
three stock splits since 1991 and an average increase in earnings per share over
the past two years of more than 16%.

The Committee analyzes external market data annually to establish
recommended targets for short-term cash incentives as well as long-term stock
grants to ensure that Enron retains and awards key executives who directly
influence these exceptional returns to shareholders. Enron believes this
approach has played a large role in the Company's success to date. The Committee
works closely with Towers Perrin, a leading executive compensation consulting
firm, in setting compensation philosophy and design to ensure that the most
competitive programs are in place.

The Enron Corp. Annual Incentive Plan, a plan approved by shareholders, is
a short-term compensation program driven by financial and operating performance.
Payouts are directly linked to company performance. If Enron fails to meet its
earnings targets, bonus payouts are adversely impacted, as occurred with respect
to bonuses paid to top officers based on 1997 earnings and stock price
performance.

The Enron Corp. Executive Compensation Long-Term Incentive Program, created
under the provisions of the 1991 Enron Corp. Stock Plan, provides long-term
grants in the form of stock options and restricted stock. In May, 1999, Enron
shareholders approved an amendment to the 1991 Enron Corp. Stock Plan which
authorizes the award of an additional ten million shares of common stock for
executive grants over the next several years. This plan is an important
component of the Committee's compensation structure and has already received the
approval of Enron's shareholders. Finally, Dr. Wershing's proposal fails to
identify any deficiencies in Enron's performance justifying a change in Enron's
compensation programs, rather it speaks only in terms of purported increases in
shareholder returns enjoyed by unspecified companies having compensation plans
based on unspecified shareholder value measures. The proposal makes no attempt
to relate these concerns to Enron or its financial or stock market performance.
Therefore, the Board of Directors believes it is inappropriate to ask
shareholders to alter current compensation programs without a clear idea of the
specific deficiencies sought to be remedied.

THE BOARD OF DIRECTORS RECOMMENDS VOTING "AGAINST" THIS PROPOSAL.
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SHAREHOLDER PROPOSALS AND DIRECTOR NOMINATIONS

Shareholders may propose matters to be presented at shareholders' meetings
and may also nominate persons to be directors. Formal procedures have been
established for those proposals and nominations.

PROPOSALS FOR 2001 ANNUAL MEETING

Pursuant to various rules promulgated by the SEC, any proposals of holders
of Voting Stock of Enron intended to be presented to the Annual Meeting of
Shareholders of Enron to be held in 2001 must be received by Enron, addressed to
Rebecca C. Carter, Senior Vice President, Board Communications and Secretary
("the Secretary"), 1400 Smith Street, Houston, Texas 77002, no later than
November 28, 2000, to be included in the Enron proxy statement and form of proxy
relating to that meeting.

In addition to the SEC rules described in the preceding paragraph, Enron's
bylaws provide that for business to be properly brought before the Annual
Meeting of Shareholders, it must be either (a) specified in the notice of
meeting (or any supplement thereto) given by or at the direction of the Board of
Directors, (b) otherwise brought before the meeting by or at the direction of
the Board of Directors or (c) otherwise properly brought before the meeting by a
shareholder of Enron who is a shareholder of record at the time of giving of
notice hereinafter provided for, who shall be entitled to vote at such meeting
and who complies with the following notice procedures. In addition to any other
applicable requirements, for business to be brought before an annual meeting by
a shareholder of Enron, the shareholder must have given timely notice in writing
of the business to be brought before an Annual Meeting of Shareholders of Enron
to the Secretary of Enron. To be timely, a shareholder's notice must be
delivered to or mailed and received at Enron's principal executive offices, 1400
Smith Street, Houston, Texas 77002, on or before November 28, 2000. A
shareholder's notice to the Secretary shall set forth as to each matter the
shareholder proposes to bring before the annual meeting (i) a brief description
of the business desired to be brought before the annual meeting and the reasons
for conducting such business at the annual meeting, (ii) the name and address,
as they appear on Enron's books, of the shareholder proposing such business,
(iii) the acquisition date, the class and the number of shares of Voting Stock
of Enron which are owned beneficially by the shareholder, (iv) any material
interest of the shareholder in such business and (v) a representation that the
shareholder intends to appear in person or by proxy at the meeting to bring the
proposed business before the meeting. Notwithstanding the foregoing bylaw
provisions, a shareholder shall also comply with all applicable requirements of
the Exchange Act, and the rules and regulations thereunder with respect to the
matters set forth in the foregoing bylaw provisions. Notwithstanding anything in
Enron's bylaws to the contrary, no business shall be conducted at the annual
meeting except in accordance with the procedures outlined above.

PROPOSALS FOR 2000 ANNUAL MEETING

The date for delivery to, or receipt by, Enron of any notice from a
shareholder of Enron regarding business to be brought before the 2000 Annual
Meeting of Shareholders of Enron was December 1, 1999. Enron has received
notices from its shareholders that Enron is required to include in this proxy
statement.

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NOMINATIONS FOR 2001 ANNUAL MEETING AND FOR ANY SPECIAL MEETINGS

Only persons who are nominated in accordance with the following procedures
shall be eligible for election as directors. Nominations of persons for election
to Enron's Board of Directors may be made at a meeting of shareholders (a) by or
at the direction of the Board of Directors or (b) by any shareholder of Enron
who is a shareholder of record at the time of giving of notice hereinafter
provided for, who shall be entitled to vote for the election of directors at the
meeting and who complies with the following notice procedures. Such nominations,
other than those made by or at the direction of the Board of Directors, shall be
made pursuant to timely notice in writing to the Secretary of Enron. To be
timely, a shareholder's notice shall be delivered to or mailed and received at
Enron's principal executive offices, 1400 Smith Street, Houston, Texas 77002,
(i) with respect to an election to be held at the Annual Meeting of Shareholders
of Enron, or before November 28, 2000, and (ii) with respect to an election to
be held at a special meeting of shareholders of Enron for the election of
directors, not later than the close of business on the tenth day following the
date on which notice of the date of the meeting was mailed or public disclosure
of the date of the meeting was made, whichever first occurs. Such shareholder's
notice to the Secretary shall set forth (a) as to each person whom the
shareholder proposes to nominate for election or re-election as a director, all
information relating to the person that is required to be disclosed in
solicitations for proxies for election of directors, or is otherwise required,
pursuant to Regulation 14A under the Exchange Act (including the written consent
of such person to be named in the proxy statement as a nominee and to serve as a
director if elected); and (b) as to the shareholder giving the notice, (i) the
name and address, as they appear on Enron's books, of such shareholder, and (ii)
the class and number of shares of capital stock of Enron which are beneficially
owned by the shareholder. In the event a person is validly designated as nominee
to the Board of Directors and shall thereafter become unable or unwilling to
stand for election to the Board of Directors, the Board of Directors or the
shareholder who proposed such nominee, as the case may be, may designate a
substitute nominee. Notwithstanding the foregoing bylaw provisions, a
shareholder shall also comply with all applicable requirements of the Exchange
Act and the rules and regulations thereunder with respect to the matters set
forth in the foregoing bylaw provisions.

NOMINATIONS FOR 2000 ANNUAL MEETING

The date for delivery to, or receipt by, Enron of any notice from a
shareholder of Enron regarding nominations for directors to be elected at the
2000 Annual Meeting of Shareholders of Enron was December 1, 1999. Enron has not
received any notices from its shareholders regarding nominations for directors
to be elected at the 2000 Annual Meeting of Shareholders.

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<PAGE> 36

GENERAL

As of the date of this proxy statement, the management of Enron has no
knowledge of any business to be presented for consideration at the meeting other
than that described above. If any other business should properly come before the
meeting, it is intended that the shares represented by proxies will be voted
with respect thereto in accordance with the judgment of the persons named in
such proxies.

The cost of any solicitation of proxies will be borne by Enron. In addition
to solicitation by use of the mails, certain officers and regular employees of
Enron may solicit the return of proxies by telephone, telegraph or personal
interview. Arrangements may also be made with brokerage firms and other
custodians, nominees and fiduciaries for the forwarding of material to and
solicitation of proxies from the beneficial owners of Voting Stock held of
record by such persons, and Enron will reimburse such brokerage firms,
custodians, nominees and fiduciaries for reasonable out-of-pocket expenses
incurred by them in connection therewith. In addition, Enron has retained a
proxy soliciting firm, Corporate Investor Communications, Inc., to assist in the
solicitation of proxies and will pay a fee of approximately $7,000 plus
reimbursement of expenses.

By Order of the Board of Directors

REBECCA C. CARTER
Senior Vice President,
Board Communications and Secretary

Houston, Texas
March 28, 2000

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<PAGE> 37

[ENRON LOGO]
<PAGE> 38
[X] PLEASE MARK YOUR
VOTES AS IN THIS
EXAMPLE.
This proxy when properly executed will be voted in the manner directed
herein. If no direction is made, this proxy will be voted FOR proposals
1 and 2 and AGAINST proposals 3 and 4.
- --------------------------------------------------------------------------------
The Board of Directors recommends a vote FOR proposals 1 and 2 and AGAINST
proposals 3 and 4.
- --------------------------------------------------------------------------------
FOR WITHHELD
1.Election of [ ] [ ]
Directors.
(see reverse)

For, except vote withheld from the following nominee(s):

- -------------------------------------------------------------
FOR WITHHELD ABSTAIN
2.Ratification of [ ] [ ] [ ]
appointment of
independent
accountants.

3.Shareholder [ ] [ ] [ ]
proposal from
Brent Blackweider,
President, Friends
of the Earth
Action.

4.Shareholder proposal [ ] [ ] [ ]
from Dr. Julia M.
Wershing.

5.In the discretion of Change of Address/ [ ]
the proxies named Comments on
herein, the proxies Reverse Side
are authorized to
vote upon other
matters as are
properly brought
before the meeting.

All as more particularly described in
the Proxy Statement relating to such
meeting, receipt of which is hereby
acknowledged.

Please sign exactly as name appears
hereon. Joint owners should each sign.
When signing as attorney, executor,
administrator, trustee or guardian,
please give full title as such.

----------------------------------------

----------------------------------------
SIGNATURE(S) DATE

*FOLD AND DETACH HERE*

THIS IS YOUR PROXY.
YOUR VOTE IS IMPORTANT.

[ENRON LOGO]
ENRON CORP.

IF YOU NEED ASSISTANCE IN ANY OF THE FOLLOWING AREAS:

o DIVIDEND CHECKS - ADDRESS CHANGES - LEGAL TRANSFERS

o DIRECT DEPOSIT - HAVE YOUR ENRON CORP. QUARTERLY DIVIDENDS ELECTRONICALLY
DEPOSITED INTO YOUR CHECKING OR SAVINGS ACCOUNT ON DIVIDEND PAYMENT DATE. (No
more worries about late or lost dividend checks.) Call (800) 870-2340 to
enroll.

o DIVIDEND REINVESTMENT - HAVE YOUR ENRON CORP. QUARTERLY DIVIDENDS REINVESTED
IN THE PURCHASE OF ADDITIONAL SHARES OF ENRON CORP. COMMON STOCK WITH NO
COMMISSION OR SERVICE CHARGE FOR THE PURCHASE OF THE SHARES FOR RECORD
HOLDERS AND A FEE OF $15 PLUS 12 CENTS PER SHARE TO SELL SHARES. (There is no
charge to have shares delivered to you in certificate form.)

o CONSOLIDATION OF ACCOUNTS - ELIMINATE MULTIPLE ACCOUNTS FOR ONE HOLDER AND
CERTAIN DUPLICATE SHAREHOLDER MAILINGS GOING TO ONE ADDRESS. (Dividend
checks, annual reports and proxy materials would continue to be mailed to
each shareholder.)

JUST CALL OUR TRANSFER AGENT'S TELEPHONE RESPONSE CENTER:
(800) 519-3111 OR (201) 324-1225
OR WRITE TO:
FIRST CHICAGO TRUST COMPANY OF NEW YORK
A DIVISION OF EQUISERVE
P.O. BOX 2500
JERSEY CITY, NJ 07303-2500

http://www.equiserve.com

FOR EARNINGS INFORMATION, CALL (800) 808-0363
<PAGE> 39

PROXY

[ENRON LOGO] ENRON CORP.

PROXY SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF ENRON CORP.
FOR ANNUAL MEETING ON MAY 2, 2000

The Undersigned hereby appoints Kenneth L. Lay, James V. Derrick, Jr., and
Rebecca C. Carter, or any of them, and any substitute or substitutes, to be the
attorneys and proxies of the undersigned at the Annual Meeting of Shareholders
of Enron Corp. ("Enron") to be held at 10:00 a.m. Houston time on Tuesday, May
2, 2000, in the LaSalle Ballroom of the Doubletree Hotel at Allen Center, 400
Dallas St., Houston, Texas, or at any adjournment thereof, and to vote at such
meeting the shares of stock of Enron that the undersigned held of record on the
books of Enron on the record date for the meeting.

ELECTION OF DIRECTORS, NOMINEES:
Robert A. Belfer, Norman P. Blake, Jr., Ronnie C. Chan, John H. Duncan, Wendy
L. Gramm, Ken L. Harrison, Robert K. Jaedicke, Kenneth L. Lay, Charles A.
LeMaistre, Rebecca Mark-Jusbasche, John Mendelsohn, Jerome J. Meyer, Paulo V.
Ferraz Pereira, Frank Savage, Jeffrey K. Skilling, John A. Urquhart, John
Wakeham, Herbert S. Winokur, Jr.

(change of address/comments)

- --------------------------------------------------------------------------------

- --------------------------------------------------------------------------------
(If you have written in the above space, please mark the corresponding box on
the reverse side of this card)

YOU ARE ENCOURAGED TO SPECIFY YOUR CHOICES BY MARKING THE APPROPRIATE BOXES,
SEE REVERSE SIDE, BUT YOU NEED NOT MARK ANY BOXES IF YOU WISH TO VOTE IN
ACCORDANCE WITH THE BOARD OF DIRECTORS' RECOMMENDATIONS. THE PROXIES CANNOT
VOTE YOUR SHARES UNLESS YOU SIGN AND RETURN THIS CARD.
-----------
SEE REVERSE
SIDE
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