Employment Agreement - Enron Corp., Enron Capital Trade & Resources Corp. and Jeffrey K. Skilling


                    EMPLOYMENT AGREEMENT

     This Employment Agreement ('Agreement') is entered into
between Enron Capital Trade & Resources Corp., a Delaware
corporation and subsidiary of Enron Corp. ('Enron'), having
offices at 1400 Smith Street, Houston, Texas 77573
('Employer'), and Jeffrey K. Skilling, an individual
currently residing at 2238 Albans Road, Houston, Texas 77005
('Employee'), to be effective as of 1st day of January, 1996
(the 'Effective Date').

     Employer presently employs Employee pursuant to an
Employment Agreement dated August 1, 1990 entered into
between Enron Finance Corp. and Employee. Employer is
desirous of continuing to employ Employee pursuant to the
terms and conditions and for the consideration set forth in
this Agreement, and Employee is desirous of continuing in
the employ of Employer pursuant to such terms and conditions
and for such consideration.  As such, this Agreement shall
cancel and supersede Employee's existing August 1, 1990
Agreement.

     Employee also has been granted rights under Employer's
existing Enron Capital Trade & Resources Corp. Second
Amended and Restated Compensation Plan (the 'Existing
Compensation Plan').  This Agreement does not cancel or
supersede such rights, but it is intended that in the future
Employer shall create a new Retail Phantom Equity Plan
pursuant to which Employee shall be granted the interest
specified herein and that Employee's rights under the
Existing Compensation Plan shall be subject to a separate
future waiver and consent agreement.

     Now, therefore, for and in consideration of the mutual
promises, covenants, and obligations contained herein,
Employer and Employee agree as follows:

Article 1:  Employment and Duties:

     1.1. The term of employment under this Agreement shall
be for five years, from January 1, 1996 through December 31,
2000 (the 'Term'). Employer agrees to employ Employee, and
Employee agrees to be employed by Employer, beginning as of
January 1, 1996, and continuing through December 31, 2000,
subject to the terms and conditions of this Agreement.

     1.2. Employee initially shall be employed in the
position of Chairman and Chief Executive Officer of
Employer.  Employer may subsequently assign Employee to a
different position or modify Employee's duties and
responsibilities.  Moreover, Employer may assign this
Agreement and Employee's employment to Enron or any
affiliates of Enron.  It is agreed, however, that Employee
shall not be permanently relocated to a city more than 50
miles from the Houston area and shall not be demoted from
the position of Chairman and Chief Executive Officer of
Employer.  Employee agrees to serve in the assigned position
and to perform diligently and to the best of Employee's
abilities the duties and services appertaining to such
position as determined by Employer, as well as such
additional or different duties and services appropriate to
such position which Employee from time to time may be
reasonably directed to perform by Employer.  Employee shall
at all times comply with and be subject to such policies and
procedures as Employer may establish from time to time.

     1.3. Employee shall, during the period of Employee's
employment by Employer, devote Employee's full business
time, energy, and best efforts to the business and affairs
of Employer.  Employee may not engage, directly or
indirectly, in any other business, investment, or activity
that interferes with Employee's performance of Employee's
duties hereunder, is contrary to the interests of Employer
or Enron, or requires any significant portion of Employee's
business time.

     1.4. Employee acknowledges and agrees that Employee
owes a fiduciary duty of loyalty, fidelity and allegiance to
act at all times in the best interests of the Employer and
to do no act which would injure Employer's business, its
interests, or its reputation.  It is agreed that any direct
or indirect interest in, connection with, or benefit from
any outside activities, particularly commercial activities,
which interest might in any way adversely affect Employer,
Enron, or any of their affiliates, involves a possible
conflict of interest.  In keeping with Employee's fiduciary
duties to Employer, Employee agrees that Employee shall not
knowingly become involved in a conflict of interest with
Employer, Enron, or their affiliates, or upon discovery
thereof, allow such a conflict to continue.  Moreover,
Employee agrees that Employee shall disclose to or discuss
with Enron's General Counsel any facts or circumstances
which might involve such a conflict of interest that has not
been discussed or approved by Enron's Office of the
Chairman.

     1.5. Employer and Employee recognize that it is
impossible to provide an exhaustive list of actions or
interests which constitute a 'conflict of interest.'
Moreover, Employer and Employee recognize there are many
borderline situations.  In some instances, full disclosure
of facts by the Employee to Enron's General Counsel may be
all that is necessary to enable Employer, Enron, or their
affiliates to protect its interests.  In others, if no
improper motivation appears to exist and the interests of
Employer, Enron, or their affiliates have not suffered,
prompt elimination of the outside interest will suffice.  In
still others, it may be necessary for Employer to terminate
the employment relationship.  Employer and Employee agree
that Employer's determination as to whether a conflict of
interest exists shall be conclusive.  Employer reserves the
right to take such action as, in its judgment, will end the
conflict.  Employer's termination of the employment
relationship solely because Employee violates this Section
1.5 shall be an Involuntary Termination, and subject to the
provisions of Section 3.5 hereof.

Article 2:  Compensation and Benefits:

     2.1. Employee's initial monthly base salary during the
Term shall be Thirty Three Thousand Three Hundred and Thirty
Three Dollars and 33/100 ($33,333.33), which shall be paid
in semi-monthly installments in accordance with Employer's
standard payroll practice.  Employee's base salary shall be
reviewed annually and may be changed annually and from time
to time (but not less than his initial base salary) by
Employer in its discretion and, after any such change,
Employee's new level of base monthly salary shall be
Employee's base monthly salary for purposes of this
Agreement until the effective date of any subsequent change.

     2.2. Employee shall be eligible for an annual bonus in
accordance with the terms of Enron's Annual Incentive Plan
or any appropriate replacement bonus plan of Enron or
Employer, which bonus may be paid in any combination of
cash, stock, or stock options.  Whether Employee is entitled
to a bonus, the amount of the bonus, and the manner of
payment of the bonus are within the sole discretion of the
Office of the Chairman of Enron.

     2.3. (a)  It is intended that Employer shall adopt a
new Retail Phantom Equity Plan (referred to herein as the
'Plan') providing to certain employees additional economic
benefits with respect to certain aspects of Employer's
business, pursuant to which it is intended that Employer and
Employee shall execute an Award Agreement.  Employee shall
have no rights under the Plan unless and until Employer and
Employee execute a written Award Agreement pursuant to the
Plan, at which time the Plan and the Award Agreement shall
become effective as to Employee.  Employer and Employee
shall enter into a separate written Award Agreement pursuant
to which Employee shall be granted a five (5%) percent full
value grant under the Plan.  The written Award Agreement
shall provide that twenty-five (25%) percent of such full
value grant shall, subject to the terms and conditions of
the Plan and the Award Agreement, vest on January 1, 1997,
and that an additional twenty-five (25%) percent of the full
value grant shall vest on each of January 1, 1998, January
1, 1999, and January 1, 2000.  Provided, however, that the
entirety of such full value grant shall vest immediately
upon the employment relationship being Involuntarily
Terminated by Employer pursuant to Section 3.1(ii) or by
Employee pursuant to Section 3.2(i) or (ii) and Employer
shall at that time buy-out Employee's vested interest in the
Plan. Provided further, however, it is agreed that if the
employment relationship has not been terminated Employer
shall have the option to buy-out one-fifth of such grant
(i.e., one percentage point of the five percentage points
granted to Employee) exercisable during the thirty-one day
period of time from January 1, 1998 to January 31, 1998 by
providing to Employee a written notice during such thirty-
one day period of time.  The one percentage point shall be
acquired pro rata from Employee's vested and non-vested
interests, and, if Employer exercises such buy-out option,
thereafter the twenty-five (25%) percent that vests on each
of January 1, 1999 and January 1, 2000 shall apply against
the reduced percent of the full value grant, that is, 25% of
a four (4%) full value grant.  The Plan or Employee's award
agreement under the Plan shall provide that Employer's buy-
out price for such one percentage point shall be as follows:
If Employer has created a subsidiary corporation and
transferred to such subsidiary the retail aspects of
Employer's business and an initial public offering ('IPO')
of the common stock of such retail subsidiary has occurred
prior to January 1, 1998, the buy-out price shall be based
upon the average trading price of the common stock of such
retail subsidiary of Employer during all trading days [but
not to exceed 30 trading days] preceding January 1, 1998,
less the value of Access Energy and Enron Energy Concepts,
L.P. as of year end 1995.  If no such IPO occurred prior to
January 1, 1998, the buy-out price shall be as determined by
an investment banker under the terms and conditions of the
Plan, which shall provide that the buy-out price shall be
the then current value of the retail subsidiary less the
value of Access Energy and Enron Energy Concepts, L.P. as of
year end 1995.  The Plan or Employee's award agreement under
the Plan shall provide that if Employee disagrees with the
determination of the investment banker, Employee shall have
the right to submit the issue of buy-out price to
arbitration in accordance with the terms and conditions of
the agreement to arbitrate contained in the Plan or
Employee's award agreement under the Plan.  The purchase
price for the buy-out shall be paid by Employer to Employee
as soon as reasonably possible.  The purchase price for the
buy-out may be paid in cash, shares of Enron's stock, or
shares of common stock of the IPO company, or combination
thereof, at Employer's option.

     (b)  The Plan or Employee's award agreement under the
Plan shall provide that Employer's retail business shall
include the direct sales of gas and electricity to small
industrial, commercial, and residential customers and all
future business activities related thereto as well as the
business activities of Access Energy and Enron Energy
Concepts, L.P.

     (c)  The Plan or Employee's award agreement under the
Plan shall specify the buy-out process and the buy-out price
for any other right [other than Employer's right under the
option specified in Section 2.3(a)] or obligation on the
part of Employer to buy-out Employee's interest in the Plan.
The Plan, as modified by Employee's award under the Plan,
shall be modeled after the rights and obligations of the
Enron Gas Services Group and Employee under the Enron Gas
Services Group Phantom Equity Plan signed by Employee on
November 8, 1991, provided, however, that the valuation
process shall in all cases deduct the value of Access Energy
and Enron Energy Concepts, L.P. as of year end 1995.

     2.4. On August 29, 1994, Enron and Employee entered
into an agreement pursuant to which Employee was granted the
option (the 'Option') to acquire 500,000 shares of Enron
common stock ('Enron Stock') subject to the terms and
conditions of the Enron Corp. 1991 Stock Plan (As Amended
and Restated Effective May 3, 1994).  The exercise price per
share of the Option was $30.25. The First Amendment to the
August 29, 1994 agreement is attached hereto as Exhibit 'A.'

     2.5. The Office of the Chairman of Enron and Employee
shall endeavor in good faith to agree upon an enhanced
position and job title for Employee that is commensurate
with and accurately reflects Employee's job responsibilities
for Employer or its affiliates.  If a mutually satisfactory
enhanced position and job title have not been agreed to by
Employee and the Office of the Chairman of Enron by February
1, 1997, then Employee shall be entitled to a payment equal
to two and one-half (2.5) times his annualized base monthly
salary then in effect on such date pursuant to Section 2.1.

     2.6. While employed by Employer during the Term of this
Agreement, Employee shall also be allowed to participate, on
the same basis generally as other employees of Employer, in
all general employee benefit plans and programs, including
improvements or modifications of the same, which on the
effective date or thereafter are made available by Employer
to all or substantially all of Employer's employees.  Such
benefits, plans, and programs may include, without
limitation, medical, health, and dental care, life
insurance, disability protection, and pension plans.  Unless
specifically set out herein, nothing in this Agreement is to
be construed or interpreted to provide greater rights,
participation, coverage, or benefits under such benefit
plans or programs than provided to similarly situated
employees pursuant to the terms and conditions of such
benefit plans and programs.

     2.7. Employer shall not by reason of this Article 2 be
obligated to institute, maintain, or refrain from changing,
amending, or discontinuing, any such incentive compensation
or employee benefit program or plan, so long as such actions
are similarly applicable to covered employees generally.
Moreover, unless specifically provided for in a written plan
document adopted by the Board of Directors of either
Employer or Enron, none of the benefits or arrangements
described in this Article 2 shall be secured or funded in
any way, and each shall instead constitute an unfunded and
unsecured promise to pay money in the future exclusively
from the general assets of Employer.

     2.8. Employer may withhold from any compensation,
benefits, or amounts payable under this Agreement all
federal, state, city, or other taxes as may be required
pursuant to any law or governmental regulation or ruling.

Article 3: Termination Prior to Expiration of
           Term and Effects of such Termination:

     3.1. Notwithstanding any other provisions of this
Agreement, Employer shall have the right to terminate
Employee's employment under this Agreement at any time prior
to the expiration of the Term for any of the following
reasons:

     (i)  For 'cause' upon the determination by Employer's
          Board of Directors or Enron's management committee
          (or, if there is no Enron management committee,
          the highest applicable level of Enron management)
          that 'cause' exists for the termination of the
          employment relationship.  As used in this Section
          3.1(i), the term 'cause' shall mean [a] Employee
          has been convicted of a felony (which, through
          lapse of time or otherwise, is not subject to
          appeal); [b] Employee has willfully refused
          without proper legal reason to perform the duties
          and responsibilities required of Employee under
          this Agreement which remains uncorrected for
          thirty (30) days following written notice to
          Employee by Employer of such breach; [c] Employee
          has willfully engaged in conduct that Employee
          knows or should know is materially injurious to
          Employer, Enron, or any of their respective
          subsidiaries; or [d] Employee violates the Foreign
          Corrupt Practices Act or other applicable United
          States law as proscribed by Section 4.1.  It is
          expressly acknowledged and agreed that the
          decision as to whether 'cause' exists for
          termination of the employment relationship by
          Employer is delegated to Employer's Board of
          Directors or Enron's management committee (or, if
          there is no Enron management committee, the
          highest applicable level of Enron management) for
          determination. If Employee disagrees with the
          decision reached by Employer's Board of Directors
          or Enron's management committee (or, if there is
          no Enron management committee, the highest
          applicable level of Enron management), the dispute
          will be limited to whether Employer's Board of
          Directors or Enron's management committee (or, if
          there is no Enron management committee, the
          highest applicable level of Enron management)
          reached its decision in good faith; or

     (ii) for any other reason whatsoever, with or without
          cause, in the sole discretion of Employer's Board
          of Directors or Enron's management committee (or,
          if there is no Enron management committee, the
          highest applicable level of Enron management); or

     (iii) upon Employee's death; or

     (iv) upon Employee's becoming disabled so as to entitle
          him to benefits under Enron's long-term disability
          plan.

The termination of Employee's employment by Employer prior
to the expiration of the Term shall constitute a
'Termination for Cause' if made pursuant to Section 3.1(i);
the effect of such termination is specified in Section 3.4.
The termination of Employee's employment by Employer prior
to the expiration of the Term shall constitute an
'Involuntary Termination' if made pursuant to Section
3.1(ii); the effect of such termination is specified in
Section 3.5.  The effect of the employment relationship
being terminated pursuant to Section 3.1(iii) as a result of
Employee's death is specified in Section 3.6.  The effect of
the employment relationship being terminated pursuant to
Section 3.1(iv) as a result of the Employee becoming
disabled is specified in Section 3.7.

     3.2. Notwithstanding any other provisions of this
Agreement, Employee shall have the right to terminate the
employment relationship under this Agreement at any time
prior to the expiration of the Term of employment for any of
the following reasons:

     (i)  Employee is required by Employer to be permanently
          relocated to a city more than 50 miles from the
          Houston area or is demoted from the position of
          Chairman and Chief Executive Officer of Employer,
          within sixty days after such relocation or
          demotion Employee provides Employer with a written
          notice that such relocation or demotion has
          occurred and that Employee intends to terminate
          the employment relationship under this provision,
          and thereafter such relocation or demotion is not
          corrected by Employer within thirty days.

     (ii) any other material breach by Employer of any
          material provision of this Agreement which remains
          uncorrected for 30 days following written notice
          of such breach by Employee to Employer; or

     (iii) for any other reason whatsoever, in the
           sole discretion of Employee.

The termination of Employee's employment by Employee prior
to the expiration of the Term shall constitute an
'Involuntary Termination' if made pursuant to Sections
3.2(i) or 3.2(ii); the effect of such termination is
specified in Section 3.5.  The termination of Employee's
employment by Employee prior to the expiration of the Term
shall constitute a 'Voluntary Termination' if made pursuant
to Section 3.2(iii); the effect of such termination is
specified in Section 3.3.

     3.3. Upon a 'Voluntary Termination' of the employment
relationship by Employee prior to expiration of the Term,
all future compensation to which Employee is entitled and
all future benefits for which Employee is eligible shall
cease and terminate as of the date of termination.  Employee
shall be entitled to pro rata salary through the date of
such termination, but Employee shall not be entitled to any
individual bonuses or individual incentive compensation not
yet paid at the date of such termination.  The Plan or
Employee's award agreement under the Plan shall provide that
upon Voluntary Termination of the employment relationship by
Employee, Employee shall be entitled only to such percentage
of the grant as had vested prior to such termination.

     3.4. Upon a 'Termination for Cause' of the employment
relationship by Employer prior to expiration of the Term,
all future compensation to which Employee is entitled and
all future benefits for which Employee is eligible shall
cease and terminate as of the date of termination.  Employee
shall be entitled to pro rata salary through the date of
such termination, but Employee shall not be entitled to any
individual bonuses or individual incentive compensation not
yet paid at the date of such termination.  The Plan or
Employee's award agreement under the Plan shall provide that
upon termination of the employment relationship for Cause
then all of Employee's interests under the Plan shall be
canceled effective as of the date of such termination of
employment and no amounts (including without limitation Plan
payments that may be payable on or before the date of such
termination of employment) shall be payable under the Plan
to Employee from and after the date of such termination of
employment.

     3.5. Upon an Involuntary Termination of the employment
relationship by either Employer or Employee prior to
expiration of the Term, Employee shall be entitled, in
consideration of Employee's continuing obligations hereunder
after such termination (including, without limitation,
Employee's non-competition obligations), to receive the
following as if Employee's employment (which shall cease on
the date of such Involuntary Termination) had continued for
the full Term of this Agreement: One Million Three Hundred
Thousand ($1,300,000) Dollars per calendar year (to be
prorated in the calendar year in which the Involuntary
Termination occurs if such termination occurs on any date
other than January 1st), payable annually, monthly, or bi-
weekly at the option of Employer.  Employee shall not be
under any duty or obligation to seek or accept other
employment following Involuntary Termination and, subject to
Employee complying with his continuing obligations
(including non-competition obligations), the amounts due
Employee hereunder shall not be reduced or suspended if
Employee accepts subsequent employment.  Employee's rights
under this Section 3.5 are Employee's sole and exclusive
rights against Employer, Enron, or their affiliates, and
Employer's sole and exclusive liability to Employee under
this Agreement, in contract, tort, or otherwise, for any
Involuntary Termination of the employment relationship.
Employee covenants not to sue or lodge any claim, demand, or
cause of action against Employer based on Involuntary
Termination for any monies other than those specified in
this Section 3.5.  If Employee breaches this covenant,
Employer shall be entitled to recover from Employee all sums
expended by Employer (including costs and attorneys fees) in
connection with such suit, claim, demand, or cause of
action.  The Plan or Employee's award agreement under the
Plan shall provide that upon Involuntary Termination of the
employment relationship by either Employer or Employee, the
entirety of Employee's full value grant referenced in
Section 2.3 shall vest immediately upon such termination of
the employment relationship and Employer shall at that time
buy-out Employee's vested interest in the Plan as specified
in Plan or Employee's award agreement under the Plan.

     3.6. Upon termination of the employment relationship as
a result of Employee's death, Employee's heirs,
administrators, or legatees shall be entitled to Employee's
pro rata salary through the date of such termination, but
Employee's heirs, administrators, or legatees shall not be
entitled to any individual bonuses or individual incentive
compensation not yet paid to Employee at the date of such
termination.  The Plan or Employee's award agreement under
the Plan shall provide that upon Employee's death,
Employee's heirs, administrators, or legatees shall be
entitled only to such percentage of the grant as had vested
prior to Employee's death.

     3.7. Upon termination of the employment relationship as
a result of Employee becoming disabled, Employee shall be
entitled to his or her pro rata salary through the date of
such termination and rights under any disability insurance
or program then in effect, but Employee shall not be
entitled to any individual bonuses or individual incentive
compensation not yet paid to Employee at the date of such
termination.  The Plan or Employee's award agreement under
the Plan shall provide that upon Employee becoming disabled,
Employee shall be entitled only to such percentage of the
grant as had vested prior to Employee's disability.

     3.8. In all cases, the compensation and benefits
payable to Employee under this Agreement upon termination of
the employment relationship shall be offset against any
amounts to which Employee may otherwise be entitled under
any and all severance plans and policies of Employer, Enron,
or its affiliates.

     3.9. Termination of the employment relationship does
not terminate those obligations imposed by this Agreement
which are continuing obligations, including, without
limitation, Employee's obligations under Articles 5 and 6.

     3.10. Should Employee remain employed by Employer
beyond the expiration of the Term, such employment shall
convert to a month-to-month relationship terminable at any
time by either Employer or Employee for any reason
whatsoever, with or without cause.  Upon such termination of
the employment relationship by either Employer or Employee
for any reason whatsoever, Employee shall be entitled to pro
rata salary through the date of such termination, but
Employee shall not be entitled to any individual bonuses or
individual incentive compensation not yet paid at the date
of such termination and all other future compensation to
which Employee is entitled and all future benefits for which
Employee is eligible shall cease and terminate.

4.   United States Foreign Corrupt Practices Act and Other
     Laws:

     4.1. Employee shall at all times comply with United
States laws applicable to Employee's actions on behalf of
Employer, including specifically, without limitation, the
United States Foreign Corrupt Practices Act, generally
codified in 15 USC 78 (FCPA), as the FCPA may hereafter be
amended, and/or its successor statutes.  If Employee pleads
guilty to or nolo contendere or admits civil or criminal
liability under the FCPA, or if a court finds that Employee
has personal civil or criminal liability under the FCPA, or
if a court finds that Employee personally committed an
action resulting in any Enron entity having civil or
criminal liability or responsibility under the FCPA with
knowledge of the activities giving rise to such liability or
knowledge of facts from which Employee should have
reasonably inferred the activities giving rise to liability
had occurred or were likely to occur, such action or finding
shall constitute 'cause' for termination under this
Agreement unless (i) such action or finding was based on the
activities of others and Employee had no personal
involvement or knowledge of such activities, or
(ii) Employer's Board of Directors or Enron's management
committee (or, if there is no Enron management committee,
the highest applicable level of Enron management) determines
that the actions found to be in violation of the FCPA were
taken in good faith and in compliance with all applicable
policies of Employer and Enron.

Article 5:  Ownership and Protection of Information; Copyrights:

     5.1. Employer shall disclose to Employee, or place
Employee in a position to have access to or develop, trade
secrets or confidential information of Employer, Enron, or
their affiliates; and/or  shall entrust Employee with
business opportunities of Employer, Enron, or their
affiliates; and/or shall place Employee in a position to
develop business good will on behalf of Employer, Enron, or
their affiliates.

     5.2. All information, ideas, concepts, improvements,
discoveries, and inventions, whether patentable or not,
which are conceived, made, developed or acquired by
Employee, individually or in conjunction with others, during
Employee's employment by Employer (whether during business
hours or otherwise and whether on Employer's premises or
otherwise) which relate to Employer's business, products or
services (including, without limitation, all such
information relating to corporate opportunities, research,
financial and sales data, pricing and trading terms,
evaluations, opinions, interpretations, acquisition
prospects, the identity of customers or their requirements,
the identity of key contacts within the customer's
organizations or within the organization of acquisition
prospects, or marketing and merchandising techniques,
prospective names, and marks) shall be disclosed to Employer
and are and shall be the sole and exclusive property of
Employer.  Moreover, all documents, drawings, memoranda,
notes, records, files, correspondence, manuals, models,
specifications, computer programs, E-mail, voice mail,
electronic databases, maps and all other writings or
materials of any type embodying any of such information,
ideas, concepts, improvements, discoveries, and inventions
are and shall be the sole and exclusive property of
Employer.

     5.3. If, during Employee's employment by Employer,
Employee creates any original work of authorship fixed in
any tangible medium of expression which is the subject
matter of copyright (such as videotapes, written
presentations on acquisitions, computer programs, drawings,
maps, architectural renditions, models, manuals, brochures,
or the like) relating to Employer's business, products, or
services, whether such work is created solely by Employee or
jointly with others (whether during business hours or
otherwise and whether on Employer's premises or otherwise),
Employee shall disclose such work to Employer.  Employer
shall be deemed the author of such work if the work is
prepared by Employee in the scope of his or her employment;
or, if the work is not prepared by Employee within the scope
of his or her employment but is specially ordered by
Employer as a contribution to a collective work, as a part
of a motion picture or other audio-visual work, as a
translation, as a supplementary work, as a compilation, or
as an instructional text, then the work shall be considered
to be work made for hire and Employer shall be the author of
the work.  If such work relating to Employer's business is
neither prepared by the Employee within the scope of his or
her employment nor a work specially ordered and is deemed to
be a work made for hire, then Employee hereby agrees to
assign, and by these presents does assign, to Employer all
of Employee's worldwide right, title, and interest in and to
such work and all rights of copyright therein.  If such work
has no relation to Employer's business, then the title and
rights of copyright related thereto will belong to Employee.

     5.4. Employee acknowledges that the business of
Employer, Enron, and their affiliates is highly competitive
and that their strategies, methods, books, records, and
documents, their technical information concerning their
products, equipment, services, and processes, procurement
procedures and pricing techniques, the names of and other
information (such as credit and financial data) concerning
their customers and business affiliates, all comprise
confidential business information and trade secrets which
are valuable, special, and unique assets which Employer,
Enron, or their affiliates use in their business to obtain a
competitive advantage over their competitors.  Employee
further acknowledges that protection of such confidential
business information and trade secrets against unauthorized
disclosure and use is of critical importance to Employer,
Enron, and their affiliates in maintaining their competitive
position.  Employee hereby agrees that Employee will not, at
any time during or after his or her employment by Employer,
make any unauthorized disclosure of any confidential
business information or trade secrets of Employer, Enron, or
their affiliates, or make any use thereof, except in the
carrying out of his or her employment responsibilities
hereunder; provided, however, that these restrictions shall
not apply to (i) such portions of any information treated as
confidential information or trade secrets by Employer, Enron
or their affiliates which in fact become publicly available
other than through the action of Employee, or (ii) such
portions of information which, although it was treated as
confidential or a trade secret at the time of its creation,
is no longer confidential or a trade secret at the time of
termination of Employee's employment by Employer, and
provided further that such restrictions shall not apply to
the portions of such information which is or becomes part of
Employee's general business knowledge or experience.  Enron
and its affiliates shall be third party beneficiaries of
Employee's obligations under this Section.  As a result of
Employee's employment by Employer, Employee may also from
time to time have access to, or knowledge of, confidential
business information or trade secrets of third parties, such
as customers, suppliers, partners, joint venturers, and the
like, of Employer, Enron, and their affiliates.  Employee
also agrees to preserve and protect the confidentiality of
such third party confidential information and trade secrets
to the same extent, and on the same basis, as Employer has
agreed to protect and preserve such third party confidential
information and trade secrets.  These obligations of
confidence apply irrespective of whether the information has
been reduced to a tangible medium of expression (e.g., is
only maintained in the minds of Enron's employees) and, if
it has been reduced to a tangible medium, irrespective of
the form or medium in which the information is embodied
(e.g., documents, drawings, memoranda, notes, records,
files, correspondence, manuals, models, specifications,
computer programs, E-mail, voice mail, electronic databases,
maps and all other writings or materials of any type).

     5.5. Upon termination of Employee's employment with
Employer, for any reason, Employee promptly shall deliver to
Employer all written materials, records, videotape, computer
programs, drawings, maps, architectural renditions, models,
manuals, brochures, and other documents made by, or coming
into the possession of, Employee during the period of
Employee's employment by Employer which are owned by
Employer, Enron, or their affiliates or which contain or
disclose confidential business information or trade secrets
of Employer, Enron, or their affiliates, and all copies
thereof.

     5.6. Both during the period of Employee's employment by
Employer and thereafter, Employee shall assist Employer and
its nominee, at any time, at Employer's cost, in the
protection of Employer's worldwide right, title, and
interest in and to information, ideas, concepts,
improvements, discoveries, and inventions, and its
copyrighted works, including without limitation, the
execution of all formal assignment documents requested by
Employer or its nominee and the execution of all lawful
oaths and applications for applications for patents and
registration of copyright in the United States and foreign
countries.

     5.7. Employee acknowledges that money damages would not
be sufficient remedy for any breach of this Article 5 by
Employee.  After provision of fifteen (15) days advance
written notice specifying Employer's basis for belief that
Employee may have violated the provisions of Article 5, and
if Employee fails to remedy such alleged breach within such
fifteen (15) period of time, Employer shall be entitled to
enforce the provisions of this Article 5 by terminating any
payments then owing to Employee under this Agreement and/or
to specific performance and injunctive relief as remedies
for such breach or any threatened breach.  Such remedies
shall not be deemed the exclusive remedies for a breach of
this Article 5, but shall be in addition to all remedies
available at law or in equity to Employer, including the
recovery of damages from Employee and his or her agents
involved in such breach and remedies available to Enron or
Employer pursuant to other agreements with Employee.

Article 6:  Non-competition Obligations:

     6.1. Employer shall disclose to Employee, or place
Employee in a position to have access to or develop, trade
secrets or confidential information of Employer, Enron, or
their affiliates; and/or  shall entrust Employee with
business opportunities of Employer, Enron, or their
affiliates; and/or shall place Employee in a position to
develop business good will on behalf of Employer, Enron, or
their affiliates.

     6.2. As part of the consideration for the compensation
and benefits to be paid to Employee hereunder; to protect
the trade secrets and confidential information of Employer,
Enron, or their affiliates that will be disclosed or
entrusted to Employee, the business good will of Employer,
Enron, or their affiliates that will be developed in
Employee, or the business opportunities that will be
disclosed or entrusted to Employee by Employer, Enron, or
their affiliated companies; and as an additional incentive
for Employer to enter into this Agreement, Employer and
Employee agree to the non-competition provisions of this
Article 6.  Employee agrees that during the period of
Employee's non-competition obligations hereunder, Employee
will not, directly or indirectly for Employee or for others,
in any geographic area or market where Employer or Enron or
any of their affiliated companies are conducting any
business as of the date of termination of the employment
relationship or have during the previous twelve months
conducted any business:

     (i)  engage in any business competitive with the
          business conducted by Employer;

     (ii) render advice or services to, or otherwise
          assist, any other person, association, or
          entity who is engaged, directly or
          indirectly, in any business competitive with
          the business conducted by Employer;

    (iii) induce any employee of Employer or Enron
          or any of their affiliates to terminate his
          or her employment with Employer, Enron, or
          their affiliates, or hire or assist in the
          hiring of any such employee by any person,
          association, or entity not affiliated with
          Enron.

These non-competition obligations shall extend for so long
as Employee is employed by Employer or, if the employment
relationship terminates prior to the expiration of the Term,
until the expiration of the Term.

     6.3. Employee understands that the foregoing
restrictions may limit his or her ability to engage in
certain businesses anywhere in the world during the period
provided for above, but acknowledges that Employee will
receive sufficiently high remuneration and other benefits
(e.g., the right to receive compensation under Section 3.5
for the remainder of the Term upon Involuntary Termination)
under this Agreement to justify such restriction.  Employee
acknowledges that money damages would not be sufficient
remedy for any breach of this Article 6 by Employee, and
Employer shall be entitled to enforce the provisions of this
Article 6 by terminating any payments then owing to Employee
under this Agreement and/or to specific performance and
injunctive relief as remedies for such breach or any
threatened breach.  Such remedies shall not be deemed the
exclusive remedies for a breach of this Article 6, but shall
be in addition to all remedies available at law or in equity
to Employer, including, without limitation, the recovery of
damages from Employee and his or her agents involved in such
breach and remedies available to Employer or Enron pursuant
to other agreements with Employee.

     6.4. It is expressly understood and agreed that
Employer and Employee consider the restrictions contained in
this Article 6 to be reasonable and necessary to protect the
proprietary information of Employer.  Nevertheless, if any
of the aforesaid restrictions are found by a court having
jurisdiction to be unreasonable, or overly broad as to
geographic area or time, or otherwise unenforceable, the
parties intend for the restrictions therein set forth to be
modified by such courts so as to be reasonable and
enforceable and, as so modified by the court, to be fully
enforced.

Article 7:  Miscellaneous:

     7.1. For purposes of this Agreement the terms
'affiliates' or 'affiliated' means an entity who directly,
or indirectly through one or more intermediaries, controls,
is controlled by, or is under common control with Enron or
Employer.

     7.2. Employee shall refrain, both during the employment
relationship and after the employment relationship
terminates, from publishing any oral or written statements
about Employer, Enron, any of their respective subsidiaries
or affiliates, or any of such entities' officers, employees,
agents or representatives that are slanderous, libelous, or
defamatory; or that disclose private or confidential
information about Employer, Enron, any of their respective
subsidiaries or affiliates, or any of such entities'
business affairs, officers, employees, agents, or
representatives; or that constitute an intrusion into the
seclusion or private lives of Employer, Enron, any of their
respective subsidiaries or affiliates, or any of such
entities' officers, employees, agents, or representatives;
or that give rise to unreasonable publicity about the
private lives of Employer, Enron, any of their respective
subsidiaries or affiliates, or any of such entities'
officers, employees, agents, or representatives; or that
place Employer, Enron, any of their respective subsidiaries
or affiliates, or any of such entities' officers, employees,
agents, or representatives in a false light before the
public; or that constitute a misappropriation of the name or
likeness of Employer, Enron, any of their respective
subsidiaries or affiliates, or any of such entities'
officers, employees, agents, or representatives.  A
violation or threatened violation of this prohibition may be
enjoined by the courts.  The rights afforded the Enron
entities and affiliates under this provision are in addition
to any and all rights and remedies otherwise afforded by
law.

     7.3. For purposes of this Agreement, notices and all
other communications provided for herein shall be in writing
and shall be deemed to have been duly given when personally
delivered or when mailed by United States registered or
certified mail, return receipt requested, postage prepaid,
addressed as follows:

     If to Employer, to:

          Enron Capital Trade & Resources Corp.
          1400 Smith Street
          Houston, Texas 77002
          Attention:  Managing Director, Control and Legal
          With a copy to:

          Enron Corp.
          1400 Smith Street
          Houston, Texas 77002
          Attention:  Corporate Secretary

     If to Employee, to:

          Jeffrey K. Skilling
          2238 Albans Road
          Houston, Texas 77005

Either Employer or Employee may furnish a change of address
to the other in writing in accordance herewith, except that
notices of changes of address shall be effective only upon
receipt.

     7.4. This Agreement shall be governed in all respects
by the laws of the State of Texas, excluding any conflict-of-
law rule or principle that might refer the construction of
the Agreement to the laws of another State or country.

     7.5. No failure by either party hereto at any time to
give notice of any breach by the other party of, or to
require compliance with, any condition or provision of this
Agreement shall be deemed a waiver of similar or dissimilar
provisions or conditions at the same or at any prior or
subsequent time.

     7.6. If a dispute arises out of or related to this
Agreement, other than a dispute regarding Employee's
obligations under Articles 5 or 6, and if the dispute cannot
be settled through direct discussions, then Employer and
Employee agree to first endeavor to settle the dispute in an
amicable manner by mediation, before having recourse to any
other proceeding or forum.  Thereafter, if either party to
this Agreement brings legal action to enforce the terms of
this Agreement, the party who prevails in such legal action,
whether plaintiff or defendant, in addition to the remedy or
relief obtained in such legal action shall be entitled to
recover its, his, or her expenses incurred in connection
with such legal action, including, without limitation, costs
of Court and attorneys fees.

     7.7. It is a desire and intent of the parties that the
terms, provisions, covenants, and remedies contained in this
Agreement shall be enforceable to the fullest extent
permitted by law.  If any such term, provision, covenant, or
remedy of this Agreement or the application thereof to any
person, association, or entity or circumstances shall, to
any extent, be construed to be invalid or unenforceable in
whole or in part, then such term, provision, covenant, or
remedy shall be construed in a manner so as to permit its
enforceability under the applicable law to the fullest
extent permitted by law.  In any case, the remaining
provisions of this Agreement or the application thereof to
any person, association, or entity or circumstances other
than those to which they have been held invalid or
unenforceable, shall remain in full force and effect.

     7.8. This Agreement shall be binding upon and inure to
the benefit of Employer and any other person, association,
or entity which may hereafter acquire or succeed to all or
substantially all of the business or assets of Employer by
any means whether direct or indirect, by purchase, merger,
consolidation, or otherwise.  Employee's rights and
obligations under Agreement hereof are personal and such
rights, benefits, and obligations of Employee shall not be
voluntarily or involuntarily assigned, alienated, or
transferred, whether by operation of law or otherwise,
without the prior written consent of Employer.

     7.9. Except as provided in (1) written company policies
promulgated by Employer or Enron dealing with issues such as
securities trading, business ethics, governmental affairs
and political contributions, consulting fees, commissions or
other payments, compliance with law, investments and outside
business interests as officers and employees, reporting
responsibilities, administrative compliance, and the like,
(2) the written benefits, plans, and programs referenced in
Section 2.6, the August 29, 1994 agreement pursuant to Enron
Corp.'s 1991 Stock Plan, and Employee's existing rights
under the Existing Compensation Plan (which it is
contemplated shall be the subject of a separate waiver and
consent agreement), or (3) any signed written agreements
contemporaneously or hereafter executed by Employer and
Employee (including the Plan), this Agreement constitutes
the entire agreement of the parties with regard to such
subject matters, and contains all of the covenants,
promises, representations, warranties, and agreements
between the parties with respect to Employee's employment
relationship with Employer and the term and termination of
such relationship, and replaces and merges previous
agreements and discussions pertaining to the employment
relationship between Employer and Employee.  Specifically,
but not by way of limitation, the Employment Agreement dated
August 1, 1990 between Enron Finance Corp. and Employee is
hereby canceled and Employee hereby irrevocably waives and
renounces all of Employee's rights and claims under such
August 1, 1990 Employment Agreement.  Any modification of
this Agreement will be effective only if it is in writing
and signed by each party whose rights hereunder are affected
thereby, provided that any such modification must be
authorized or approved by the Board of Directors of Employer
and the Office of the Chairman of Enron.

     IN WITNESS WHEREOF, Employer and Employee have duly
executed this Agreement in multiple originals to be
effective on the date first stated above.

                         ENRON CAPITAL TRADE & RESOURCES CORP.


                         By:  PEGGY B. MENCHACA
                         Title:  Vice President & Secretary
                         This 4th day of March, 1996


                         JEFFREY K. SKILLING
                         JEFFREY K. SKILLING
                         This 4th day of March, 1996