Exhibit 10.1

TXU

SALARY DEFERRAL PLAN

This document constitutes part of a prospectus covering securities that have
been registered under the Securities Act of 1933.

January 1, 2005

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TXU SALARY DEFERRAL PROGRAM

(As amended and restated effective January 1, 2005)

Section 1. Purpose

1.1 Purpose. The TXU Salary Deferral Program (the “Plan”) was established,
effective April 1, 1991, was amended as of April 1, 1998, May 12, 2000, and
August 17, 2001, and is hereby amended and restated, effective as of January 1,
2005, to comply with the requirements of Section 409A of the Internal Revenue
Code of 1986, as amended. The primary purpose of the Plan is to provide a
mechanism for certain key employees of Participating Employers to defer a
portion of their Salary and Bonus, to motivate key employees, and to recognize
the contributions of such employees to the Company as the Plan sponsor. The Plan
is designed as an unfunded arrangement maintained primarily for the purpose of
providing deferred compensation for a select group of management or highly
compensated employees as determined under the provisions of Section 201(2) of
the Employee Retirement Income Security Act of 1974.

Section 2. Definitions

2.1 Definitions. Whenever used herein, the following terms shall have the
meanings set forth below:

(a) “Account” means the individual account maintained by the Company for each
Participant for recording deferrals of Salary, Bonus and DICP Amounts made by
each Participant in the Plan, Matching Awards made on behalf of each Participant
in the Plan, and earnings on such Deferrals and Matching Awards.

(b) “Adjustment Date” means the last day of each calendar quarter and such other
dates as the Committee in its discretion may prescribe.

(c) “Beneficiary” means the person or persons named by the Participant as the
recipient(s) of any distribution remaining to be paid to the Participant under
the Plan upon the Participant’s death.

(d) “Board of Directors” means the Board of Directors of the Company.

(e) “Bonus” means the cash portion of any future bonus or incentive award paid
by a Participating Employer to a Participant with respect to services to be
performed by a Participant during a Plan Year under an incentive plan adopted by
such Participating Employer.

(f) “Business Unit” means a subsidiary, division or operating unit of the
Company designated by the Chief Executive of the Company which will focus on its
own unique products, services and markets.

 

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(g) “Change in Control” means the occurrence of any one or more of the following
events:

(i) individuals who, on May 20, 2005, constitute the Board of Directors (the
“Board”) of the Company (the “Incumbent Directors”) cease for any reason to
constitute at least a majority of the Board, provided that any person becoming a
director subsequent to May 20, 2005 whose election or nomination for election
was approved by a vote of at least two-thirds of the Incumbent Directors then on
the Board (either by a specific vote or by approval of the proxy statement of
the Company in which such person is named as a nominee for director, without
written objection to such nomination) shall be an Incumbent Director; provided,
however, that no individual initially elected or nominated as a director of the
Company as a result of an actual or threatened election contest with respect to
directors or as a result of any other actual or threatened solicitation of
proxies or consents by or on behalf of any person other than the Board shall be
deemed to be an Incumbent Director;

(ii) any “person” (as such term is defined in Section 3(a)(9) of the Securities
Exchange Act of 1934, as amended (the “Exchange Act”) and as used in Sections
13(d)(3) and 14(d)(2) of the Exchange Act) is or becomes a “beneficial owner”
(as defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of
securities of the Company representing 25% or more of the combined voting power
of the Company’s then outstanding securities eligible to vote for the election
of the Board (the “Company Voting Securities”); provided, however, that the
event described in this paragraph (ii) shall not be deemed to be a Change in
Control by virtue of any of the following acquisitions: (A) by the Company or
any entity a majority of the voting securities or other voting interests of
which are owned, directly or indirectly, by the Company (“Subsidiary”), (B) by
any employee benefit plan (or related trust) sponsored or maintained by the
Company or any Subsidiary, (C) by any underwriter temporarily holding securities
pursuant to an offering of such securities, (D) pursuant to a Non-Qualifying
Transaction (as defined in paragraph (iii) below), (E) with respect to any
Eligible Executive, pursuant to any acquisition by such Eligible Executive or
any group of persons including such Eligible Executive (or any entity controlled
by such Eligible Executive or controlled by any group of persons including such
Eligible Executive); or (F) a transaction (other than one described in paragraph
(iii) below) in which Company Voting Securities are acquired from the Company,
if a majority of the Incumbent Directors approve a resolution providing
expressly that the acquisition pursuant to this clause (F) does not constitute a
Change in Control under this paragraph (ii);

(iii) the consummation of a merger, consolidation, statutory share exchange or
similar form of corporate transaction involving the Company or any of its
Subsidiaries that requires the approval of the Company’s shareholders other than
approval required solely by Article XI of the Company’s articles of
incorporation, whether for such transaction or the issuance of securities in the
transaction (a “Business Combination”), unless immediately following such
Business Combination: (A) more than 50% of the total voting power of (x) the
corporation or other entity resulting from such Business Combination (the
“Surviving Corporation”), or (y) if applicable, the ultimate parent corporation
or other entity that, directly or indirectly, has beneficial ownership of at
least 95% of the voting securities eligible to elect directors (or persons
performing similar functions) of the Surviving Corporation (the “Parent
Corporation”), is represented by Company Voting Securities that were outstanding
immediately prior to such Business Combination (or, if applicable, is
represented by voting

 

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securities into which such Company Voting Securities were converted or for which
such Company Voting Securities were exchanged pursuant to such Business
Combination), and such voting power of the Parent Corporation (or, if there is
no Parent Corporation, the Surviving Corporation) among the holders thereof is
held in substantially the same proportion as the voting power of such Company
Voting Securities held by the holders thereof immediately prior to the Business
Combination, (B) no person (other than any employee benefit plan (or related
trust) sponsored or maintained by the Surviving Corporation or the Parent
Corporation, as the case may be, or any Subsidiary thereof), is or becomes the
beneficial owner, directly or indirectly, of 25% or more of the total voting
power of the outstanding voting securities eligible to elect directors (or
persons performing similar functions) of the Parent Corporation (or, if there is
no Parent Corporation, the Surviving Corporation) and (C) at least a majority of
the members of the board of directors (or similar governing body) of the Parent
Corporation (or, if there is no Parent Corporation, the Surviving Corporation)
following the consummation of the Business Combination were Incumbent Directors
at the time of the Board’s approval of the execution of the initial agreement
providing for such Business Combination or, if any director was elected after
such time but prior to the consummation of such Business Combination, such
director was elected to fill a vacancy on the Board created in the ordinary
course and qualifies as an Incumbent Director (any Business Combination which
satisfies all of the criteria specified in (A), (B) and (C) above shall be
deemed to be a “Non-Qualifying Transaction”); or

(iv) the consummation of a complete liquidation or dissolution of the Company
required to be approved by the Company’s shareholders or a sale of all or
substantially all of the assets of the Company and its Subsidiaries, considered
as a whole.

Notwithstanding the foregoing, a Change in Control of the Company shall not be
deemed to occur solely because any person acquires beneficial ownership of more
than 25% of the Company Voting Securities as a result of the acquisition of
Company Voting Securities by the Company which reduces the number of Company
Voting Securities outstanding; provided, that if after such acquisition by the
Company such person becomes the beneficial owner of additional Company Voting
Securities that increases the percentage of outstanding Company Voting
Securities beneficially owned by such person, a Change in Control of the Company
shall then occur.

(h) “Code” means the Internal Revenue Code of 1986, as amended from time to
time.

(i) “Committee” means the Salary Deferral Program Administrative Committee whose
members are appointed from time to time by the Board of Directors or the Chief
Executive of the Company.

(j) “Company” means TXU Corp., its successors and assigns.

(k) “Deferral” means the deferral of Salary, Bonus and/or DICP Amounts under
this Plan as provided for in Section 4 hereof.

 

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(l) “Deferral Period” means the period of deferral, beginning with the first day
of the applicable Plan Year, which shall be seven years for the Seven Year
Option and which shall be the period ending with Retirement for the Retirement
Option. Notwithstanding the foregoing, the Deferral Period shall end on the date
of death, Disability, or termination of employment and, to the extent that
amounts otherwise eligible for distribution under this Plan combined with the
Participant’s other remuneration exceeds the Applicable Employee Remuneration
for such year, the Deferral Period for such excess amount shall end with
Retirement or such earlier date as of which such amounts, or any part thereof,
combined with other remuneration does not exceed the Applicable Employee
Remuneration. For purposes of this definition, “Applicable Employee
Remuneration” means applicable employee remuneration as that term is defined in
Section 162(m), or any successor provision, of the Code. Transition Provision:
Notwithstanding any other provisions contained herein, the Deferral Period for
amounts subject to an Election made for periods prior to April 1, 1995, shall be
the Deferral Period applicable at the time of the Election.

(m) “DICP” means the TXU Deferred and Incentive Compensation Plan, as it may be
amended from time to time.

(n) “DICP Amounts” means amounts deferred to this Plan prior to January 1, 2005,
which would have been distributed under the DICP if not for the deferral of such
amounts hereunder.

(o) “Disability” means a medically determinable physical or mental impairment
that can be expected to last for a continuous period of not less than 12 months,
as a result of which the Participant is entitled to receive, and has been
receiving for a period of not less than three months, income replacement
benefits under one or more plans of the Company.

(p) “Early Retirement” means Retirement at age fifty-five or later but prior to
Normal Retirement.

(q) “Eligible Employee” means, for Plan Years beginning on or before April 1,
2001, an employee of a Participating Employer whose Salary as of January 1,
1991, is $80,000 or more such threshold amount to be indexed as of January 1 of
each subsequent year is consistent with the Consumer Price Index for such year.
For Plan years beginning on or after January 1, 2002, “Eligible Employee” shall
mean an employee of a Participating Employer whose Salary, as of October 1 of
the previous year, meets or exceeds a threshold Salary level (which shall not be
less than $100,000) and/or other criteria established by the Plan Administrator
for each Plan Year based on such factors as the Plan Administrator deems
appropriate.

(r) “Matching Award” means contributions made by the Participating Employers
pursuant to Section 5.1 herein.

(s) “Normal Retirement” means Retirement at age sixty-two or later.

 

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(t) “Participant” means an Eligible Employee who elects to participate in the
Plan and whose Account(s) has not been completely distributed.

(u) “Participating Employer” means the Company and each of its subsidiaries,
affiliates or Business Units which are approved by the Committee for
participation in this Plan. The Participating Employers, as of the date of the
restatement of this Plan, are listed on Exhibit “A” attached hereto.
Participation in the Plan by additional Participating Employers will commence as
of the beginning of the Plan Year following Committee approval of such
participation.

(v) “Plan Administrator” means the person(s) or entities appointed by the
Committee to assist in carrying out the operation of the Plan.

(w) “Plan Year” means the twelve-month period beginning January 1 and ending
December 31.

(x) “Rate” means the earnings rate to be applied to certain Deferrals and
Matching Awards under Section 6.2 and pursuant to Section 9.1 hereof for the
Deferral Period which shall be the greater of: (i) the actual earnings rate, as
determined by the Trustee, for assets held in Trust under the Seven-Year Option
and invested in accordance with the provisions of Section 6.2; and (ii) the
Alternative Rate. The term “Alternative Rate” shall mean the average earnings
rate, as determined by the Trustee, of interest rates payable on Treasury Notes
of the United States Government with a maturity period of ten years. Income
credited under the Alternative Rate shall be determined by multiplying the
Alternative Rate for the Plan Year within the Deferral Period times the average
balance in the Account for such Plan Year, including income earned for prior
periods. Income on all Accounts under the Plan shall be deemed to have been
earned on a consistent basis.

(y) “Retirement” means termination of employment from a Participating Employer
upon attaining age 65, or as early as attaining age 55 with at least 15 years of
Accredited Service (as defined under the TXU Retirement Plan, or a successor
plan).

(z) “Retirement Option” means the option to defer receipt of certain amounts of
Salary, Bonus and/or DICP Amounts until Retirement.

(aa) “Salary” means the annualized rate of normal base pay earnings, prior to
any deferrals, of an Employee exclusive of overtime, bonuses or any fringe
benefits.

(bb) “Separation from Service” means termination of employment under
circumstances that would qualify as a “separation from service” for purposes of
Code Section 409A and the regulations issued thereunder.

(cc) “Seven Year Option” means the option to defer receipt of certain amounts of
Salary, Bonus and/or DICP Amounts for seven years.

 

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(dd) “Trust” means the trust established by the Company to assist it in meeting
its obligations under the Plan.

(ee) “Trustee” means the trustee appointed by the Committee to hold assets of
the Plan.

(ff) “Unforeseeable Emergency” means a severe financial hardship to a
Participant resulting from an illness or accident of the Participant, the
Participant’s spouse or a dependent (as defined in Code section 152(a)) of a
Participant, loss of the Participant’s property due to casualty, or other
similar extraordinary and unforeseeable circumstance arising as a result of
events beyond the control of the Participant.

(gg) “Vesting Period” means the period beginning with the date of the beginning
of the Plan Year of deferral and ending with the end of the seventh Plan Year.

Section 3. Deferral Eligibility and Participation

3.1 Eligibility. An Eligible Employee shall be eligible to participate in the
Plan as of the date that he satisfies the eligibility requirements set forth
herein. All Eligible Employees will be given the opportunity, annually during an
election period prior to the beginning of a Plan Year, to participate in the
Plan during such Plan Year. Individuals who first become Eligible Employees
during the Plan Year shall be notified of their eligibility and shall be given
the opportunity, during the thirty (30) day period following such notification,
to participate in the Plan for the remainder of such Plan Year. Elections with
regard to participation during a Plan Year shall be irrevocable.

3.2 Participation. All Eligible Employees may elect to participate in this Plan,
and defer Salary and Bonus in the manner prescribed in Section 4.1 below.

Section 4. Election to Defer

4.1 Deferral Election. An Eligible Employee may elect, irrevocably, by written
notice to the Plan Administrator on an election form at the time(s), and in the
manner prescribed by the Plan Administrator, to make Deferrals during the Plan
Year of a percentage of Salary and/or Bonus, under the Retirement Option, the
Seven Year Option, or a combination thereof, in one percent (1%) increments, up
to a maximum of fifty percent (50%) of Salary and one hundred percent (100%) of
Bonus. Such election shall be made by an individual who first becomes eligible,
during the period specified in Section 3.1, and by all other Participants during
the election period prescribed by the Plan Administrator, which shall be, prior
to the first day of the Plan Year to which such election relates.

4.2 Salary Deferrals. Salary deferred under the Plan will be ratably deducted in
each pay period during the Plan Year.

4.3 Bonus Deferrals. Bonus deferred under the Plan will be deferred at the time
that the Bonus would otherwise have been paid.

 

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Section 5. Matching Awards, Vesting, and Forfeitures.

5.1 Matching Awards. Each Participating Employer shall contribute to the Account
of each Participant employed by such Participating Employer, as a Matching
Award, an amount equal to one hundred percent (100%) of the Participant’s Salary
Deferral up to a maximum Salary Deferral of eight percent (8%). Such
contribution shall be credited at the time of the crediting of the Salary
Deferral amount to be matched.

5.2 Vesting. Subject to the forfeiture provisions of Section 5.3, a Participant
shall at all times be one hundred percent (100%) vested in the Participant’s
Salary Deferrals, Bonus Deferrals, DICP Amounts and all earnings thereon. A
Participant shall be one hundred percent (100%) vested in the Participant’s
Matching Awards, and on income earned on such Matching Awards at the end of the
Vesting Period. Notwithstanding any other provision of this Plan, a
Participant’s Account shall become one hundred percent (100%) vested upon the
Participant’s Normal Retirement, death, or Disability regardless of the
applicable Vesting Period.

5.3 Forfeitures. The following amounts shall be forfeited from a Participant’s
Account as of the date upon which the forfeiture is created:

(a) Seven Year Option Forfeitures.

(i) Early Retirement. An amount equal to four percent (4%) of the portion of the
Participant’s Account balance relating to Matching Awards and earnings thereon,
and Salary Deferrals subject to Matching Awards and earnings thereon, for each
full year Retirement occurs prior to Normal Retirement shall be forfeited.

(ii) Termination for other than Death, Disability or Retirement. If termination
of service with the Company occurs for reasons other than death, Disability, or
Retirement, Matching Awards and all earnings thereon shall be forfeited.

(b) Retirement Option Forfeitures.

(i) Early Retirement. An amount equal to four percent (4%) of the Participant’s
Account balance relating to non-vested Matching Awards and earnings thereon, and
Salary Deferrals subject to Matching Awards and earnings thereon, for each full
year Retirement occurs prior to Normal Retirement shall be forfeited.

(ii) Termination for other than Death, Disability or Retirement. If termination
of service with the Company occurs for reasons other than death, Disability, or
Retirement, Matching Awards and all earnings thereon for Plan Years which are
nonvested, shall be forfeited.

Section 6. Investments and Earnings

6.1 Investments and Earnings For Deferrals and Matching Awards After April 1,
1998. With respect to Salary and Bonus Deferrals and Matching Awards made from
and after April 1, 1998, and DICP Amounts previously deferred hereunder, the
amount credited to a

 

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Participant’s Account shall be adjusted as of each Adjustment Date to reflect
such gain, loss and/or expenses incurred based on the experience of the
investments selected by the Participant prior to the date prescribed by the
Committee for the investment of his or her Account and taking into account
additional Deferrals credited to and distributions made from such Account since
the last Adjustment Date. The Committee shall have sole and absolute discretion
with respect to the number and type of investment choices made available for
selection by Participants, the timing and manner of Participant investment
elections and the method by which adjustments are made. The designation of
investment choices by the Committee shall be for the sole purpose of adjusting
Accounts pursuant to this Section and this provision shall not obligate the
Participating Employers to invest or set aside any assets for the payment of
benefits hereunder; provided, however, that a Participating Employer may invest
a portion of its general assets in investments, including investments which are
the same as or similar to the investment choices designated by the Committee and
selected by Participants, but any such investments shall remain part of the
general assets of such Participating Employer and shall not be deemed or
construed to grant a property interest of any kind to any Participant,
designated beneficiary or estate. The Committee shall notify the Participants of
the investment choices available and the procedures for making and changing
investment elections.

6.2 Investments and Earnings For Deferrals and Matching Awards Made Prior to
April 1, 1998. The Trustee shall continue to invest Salary Deferrals and
Matching Awards made prior to April 1, 1998 under the Seven Year Option,
together with all earnings on such Salary Deferrals and Matching Awards, in a
fixed income fund of investment grade securities under investment guidelines
established by the Committee. The Trustee shall continue to invest all other
contributions to Participants’ Accounts made prior to April 1, 1998 in a manner
consistent with investment guidelines established by the Committee. At the time
of distribution of the portion of Accounts attributable to Salary Deferrals and
Matching Awards made prior to April 1, 1998, Participants will receive their
Account balances relating to such pre-April 1, 1998 Salary Deferrals and
Matching Awards, including income determined by applying the Rate.

Section 7. Participant Accounts

7.1 Separate Accounts. The Plan Administrator shall establish and maintain
separate individual Accounts for each Participant for deferrals of Salary, Bonus
and DICP Amounts, Matching Awards and earnings thereon for each Plan Year.

7.2 Unsecured Interest. No Participant or Beneficiary shall have any security
interest whatsoever in any assets of the Company or any Participating Employer.
To the extent that any person acquires a right to receive payments under the
Plan, such right shall not be secured or represented by any assets of the
Company or any Participating Employer.

Section 8. Distribution of Accounts

8.1 Value of Participant’s Accounts.

(a) Deferrals and Matching Awards Made On or After April 1, 1998. The value of
the portion of a Participant’s Account relating to Salary and Bonus Deferrals
and

 

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Matching Awards made on or after April 1, 1998, and deferrals of DICP Amounts,
shall be determined based upon the amount credited to such Account as of the
most recent Adjustment Date plus any Deferrals and Matching Awards credited to
such Account since such Adjustment Date.

(b) Deferrals and Matching Awards Made Prior to April 1, 1998. The value of the
portion of a Participant’s Account relating to Salary Deferrals and Matching
Awards made prior to April 1, 1998 shall be determined as of the last day of the
applicable Deferral Period, or, if earlier, at termination of employment.

(c) Reduction of Accounts Upon Distributions and Forfeitures. The amount of each
distribution made with respect to an Account and any forfeiture amounts applied
pursuant to Section 5.3 shall be deducted from the balance credited to such
Account at the time of distribution or forfeiture.

8.2 Form and Timing of Distribution. The value of the Participant’s Accounts at
distribution shall be paid in cash, as follows:

(a) Seven-Year Option - in a lump-sum distribution as soon as practicable after
the end of the Deferral Period or, if earlier, termination of employment, but in
no event later than sixty days following such date subject, however, to the
delay provided for in Section 8.3. No interest shall accrue or be paid for the
period from the end of the Deferral Period until distribution.

(b) Retirement Option -

(i) Form of Payment upon Retirement - The aggregate amounts deferred under the
Retirement Option, together with any matching contribution or earnings
attributable thereto, shall be distributed in annual installments over the
period certain elected by the Participant as provided in Section 8.2(b)(iii)
from one to ten years, or fifteen years, or twenty years, commencing in the year
after, but in no event later than twelve months following the date of
Retirement, subject, however, to the delay provided for in Section 8.3. During
the distribution period, undistributed amounts in the Retirement Option shall
continue to be adjusted for earnings pursuant to Section 8.2(b)(iv). In the
event of the death of a Participant or Beneficiary during the distribution
period, the remainder of the Account shall be distributed to the Participant’s
Beneficiary, or if no Beneficiary has been designated, to the estate of the
Participant or Beneficiary in a lump-sum distribution as soon as practicable
after the Participant’s date of death.

(ii) If Participant Terminates - If the Participant terminates employment prior
to Retirement, then the portion of his Account subject to the Retirement Option
shall be paid in a lump-sum distribution as soon as practicable after
termination occurs but in no event later than sixty days following such date,
subject to the delay provided for in Section 8.3. No interest shall accrue or be
paid for the period from the date of termination until distribution.

 

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(iii) Election of Payment Term - Participant shall elect the period over which
amounts in such Participant’s Account that are subject to the Retirement Option
shall be paid. Such election shall be made on or before the later of
(A) December 31, 2006, or (B) the date such Participant first commences
participation in the Plan. Such election shall apply to the entire portion (if
any) of such Participant’s Account that is subject to the Retirement Option,
regardless of when such amounts were deferred or otherwise credited to the
Participant’s Account, and shall be irrevocable irrespective of any prior
elections made.

(iv) Earnings During Distribution Period - With respect to the portion of the
Participant’s Account relating to Salary and Bonus Deferrals made on or after
April 1, 1998 and DICP Amounts, the Participant shall make an irrevocable
election, at the same time he elects the payment term as provided in
Section 8.2(b)(iii), to have his installments paid (1) on a fixed annuity basis
using a fixed annuity rate of return determined by the Committee (“Fixed
Annuity”); or (2) on a variable annuity basis taking into account the earnings
and losses credited to the Participant’s Account as a result of the investment
return tracking elections made by the Participant during the annuity period
(“Variable Annuity”); or (3) a combination of a Fixed Annuity and a Variable
Annuity as elected by the Participant in increments of 1%. Except as otherwise
provided in Section 9.2, with respect to the portion of the Participant’s
Account relating to Salary Deferrals and Matching Awards made prior to April 1,
1998, such installments shall be made in a fixed amount which shall amortize the
value of such portion of the Participant’s Account over the period elected by
the Participant in Section 8.2(b)(iii), using the Rate as a projected earnings
rate of return.

8.3 Delay of Certain Benefit Payments.

(a) With respect to any Participant who is a “specified employee” (within the
meaning of Code section 409A and the regulations issued thereunder, the
distribution of any benefits shall not commence earlier than the date that is
six (6) months following the date of such Participant’s Separation from Service.
In the event that any benefit payable in installments is delayed by application
of this Section 8.3(a), the period of payment shall not be extended, the first
payment shall include all amounts that would have otherwise been paid in the
absence of such delay, and subsequent payments shall be made at such times and
in such amounts as would have otherwise been paid in the absence of such delay.

(b) The provisions of Section 8.3(a) shall not apply (i) with respect to any
distribution made on account of the death or Disability of the Participant, or
(ii) if, at the time of such Participant’s Separation from Service, no stock of
either the Company or the Participant’s employer is publicly traded on an
established securities market or otherwise.

 

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8.4 Election to Delay Commencement of Retirement Option Payments.

Any Participant may make a one-time election to delay the commencement of
payment of that portion of his Account that is subject to the Retirement Option
payment provisions of Section 8.2(b), subject to the following:

(a) Such election shall be made no later than twelve (12) months prior to the
date on which such payments would have otherwise commenced (without regard to
the application of Section 8.3), and

(b) Such election must specify a payment date that will cause the commencement
of the payment of such amounts to be delayed for at least five (5) years beyond
the date such payments would have otherwise commenced in the absence of the
election under this Section 8.4.

(c) A Participant may make only one election under this Section 8.4 during the
period of his participation in the Plan and such election will be ineffective
until the expiration of twelve (12) months after the date it is made.

(d) An election under this Section 8.4 shall not be effective with respect to
any amount subject to the Retirement Option that is payable as a lump sum under
Section 8.2(b)(ii).

8.5 Distribution in the Event of an Unforeseeable Emergency. If a Participant
encounters an Unforeseeable Emergency, the Plan Administrator in its absolute
discretion may direct the Company to pay to such Participant such portion of the
Account, including the entire amount if appropriate, as the Committee shall
determine to be necessary to satisfy the need presented by such Unforeseeable
Emergency, plus amounts necessary to pay all taxes and penalties reasonably
anticipated as a result of the distribution. A distribution on account of an
Unforeseeable Emergency may not be made to the extent such emergency may be
relieved through reimbursement or compensation by insurance or otherwise or by
liquidation of the Participant’s assets (to the extent the liquidation would not
itself cause severe financial hardship).

Section 9. Certain Elections for Pre-April 1, 1998 Participants

9.1 Election to Continue Under Prior Plan Provisions. Notwithstanding anything
herein to the contrary, Eligible Employees who, as of March 31, 1998, were
Participants in this Plan were given the opportunity, pursuant to a one-time,
irrevocable written election, to have certain Plan provisions relating to
permitted Deferrals, Matching Awards and investments which were in effect
immediately prior to the effective date of the restatement of this Plan, as
described in Exhibit “B” attached hereto and incorporated herein by reference
(the “Prior Plan Provisions”), apply with respect to their future Plan
participation.

9.2 Election for Investment of Pre-April 1, 1998 Deferrals and Matching Awards.
Notwithstanding anything herein to the contrary, Eligible Employees who, as of
March 31, 1998,

 

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were Participants in this Plan and who do not make the election provided for in
Section 9.1 to have the Prior Plan Provisions apply to their future Plan
participation, were given the opportunity, pursuant to a one-time, irrevocable
written election, to have the investment provisions set forth in Section 6.1 and
the valuation provisions set forth in Section 8.1(a) apply to the entirety of
their Account, including Salary Deferrals and Matching Awards made prior to
April 1, 1998. The Account of each Participant who made such an election was
valued as of March 31, 1998 using the actual rate of return of such Account
assets in accordance with the investment provisions of Section 6.2. From and
after April 1, 1998, the provisions of Sections 6.2 and 8.1(b) no longer applied
to any portion of their Account. Furthermore, such Participant’s election under
Section 8.2(b)(iv) shall be applied as if all amounts in Participant’s Account,
subject to the Retirement Option, were deferred on or after April 1, 1998.

Section 10. Nontransferability

10.1 Nontransferability. In no event shall the Company or any Participating
Employer make any distribution or payment under this Plan to any assignee or
creditor of a Participant or a Beneficiary. Prior to the time of a distribution
or payment hereunder, a Participant or a Beneficiary shall have no right by way
of anticipation or otherwise to assign or otherwise dispose of any interest
under this Plan.

Section 11. Designation of Beneficiaries

11.1 Specified Beneficiary. A Participant shall designate a Beneficiary or
Beneficiaries who, upon the Participant’s death are to receive the amounts that
otherwise would have been paid to the Participant. All Beneficiary designations
shall be in writing and signed by the Participant, and shall be effective only
if and when delivered to the Plan Administrator during the lifetime of the
Participant. A Participant may, from time to time during his lifetime, change
his Beneficiary or Beneficiaries by a signed, written instrument delivered to
the Plan Administrator. The payment of amounts shall be in accordance with the
last unrevoked written designation of the Beneficiary that has been signed and
so delivered.

11.2 Estate as Beneficiary. If a Participant designates a Beneficiary without
providing in the designation that the Beneficiary must be living at the time of
each distribution, the designation shall vest in the Beneficiary all of the
distributions whether payable before or after the Beneficiary’s death, and any
distributions remaining upon the Beneficiary’s death shall be made to the
Beneficiary’s estate. In the event a Participant shall not designate a
Beneficiary or Beneficiaries, or if, for any reason, such designation shall be
ineffective, in whole or in part, as determined solely in the discretion of the
Plan Administrator, the distribution that otherwise would have been paid to such
Participant shall be paid to the Participant’s estate.

Section 12. Rights of Participants

12.1 Employment. Nothing in the Plan shall alter or interfere in any way with
the employment relationship between Participants and Participating Employers,
nor limit in any way the right of the Company or any Participating Employer to
terminate any Participant’s

 

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employment at any time. This Plan shall not confer upon any Participant any
right to continue in the employ of the Company or any Participating Employer.

Section 13. Administration

13.1 Administration. The Committee shall be responsible for the administration
of the Plan. The Committee is authorized, in its sole discretion, to interpret
the Plan, to prescribe, amend, and rescind rules and regulations relating to the
Plan, provide for conditions and assurances deemed necessary or advisable to
protect the interests of the Company, and to make all other determinations
necessary or advisable for the administration of the Plan. The determination of
the Committee, interpretation or other action made or taken pursuant to the
provisions of the Plan, shall be final and shall be binding and conclusive for
all purposes and upon all persons whomsoever. The Committee shall appoint a Plan
Administrator to assist in carrying out the operations of the Plan and a Trustee
of the Trust to accompany the Plan.

13.2 Annual Reports. The Plan Administrator shall render annually a written
report to each Participant which shall set forth, at a minimum, the
Participant’s Account balances as of the end of the most recent Plan Year.

Section 14. Amendment or Termination of the Plan

14.1 Amendment or Termination of the Plan. The Board of Directors may amend,
terminate, or suspend the Plan at any time. Any such amendment, termination, or
suspension of the Plan shall be effective on such date as the Board of Directors
may determine. An amendment or modification of the Plan may affect Participants
at the time thereof as well as future Participants, but no amendment or
modification of the Plan for any reason may diminish any Participant’s Accounts
as of the effective date thereof. As soon as practical, but in no event more
than fifteen (15) days following Plan termination, the Participating Employers
shall make irrevocable contributions to the Trust in an aggregate amount, as
determined by the Committee, which when added to the total value of the assets
of the Trust at such time equals the total amount credited to all Accounts as of
the date of Plan termination. In the event the Plan is terminated, no additional
deferrals shall be permitted, and Participants’ Accounts shall be distributed at
the time and in the manner that they would otherwise have been distributed under
the Plan in the absence of such termination. In no event shall such termination
result in the acceleration of benefit payments hereunder.

Section 15. Corporate Changes

15.1 Dissolution or Liquidation. Notwithstanding any provision herein to the
contrary, upon the dissolution of the Company in a transaction subject to
taxation under Code section 331, the Participants’ Accounts shall vest as of the
day preceding the date of dissolution or liquidation and shall not be subject to
the forfeiture provisions of this Plan. The Company shall cause the full amount
of each Participant’s Account to be paid in cash in a lump sum to the
Participant, or his Beneficiary, as soon as is practicable, but in no event
later than sixty days following the date of dissolution or liquidation.

 

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15.2 Change in Control. Notwithstanding anything in this Plan to the contrary,
in the event of a Change in Control: (i) the Participants’ Accounts shall vest
as of the day immediately preceding the date of such Change in Control and shall
not be subject to the forfeiture provisions of this Plan, and (ii) the
Participating Employers shall, as soon as possible, but in any event within
thirty (30) days, following such Change in Control, make irrevocable
contributions to the Trust in an aggregate amount which, when added to the total
value of the assets of the Trust at such time, equals the total amount credited
to all Accounts as of the date of such Change in Control. Thereafter, the
Participating Employers shall make monthly contributions to the Trust in
aggregate amounts sufficient to maintain the total value of Trust assets at an
amount equal to the total amount credited to all Accounts. Notwithstanding any
provision of this Plan to the contrary, no action taken on or within two years
following such Change in Control to amend or terminate this Plan shall be
effective unless written consent thereto is obtained from a majority of the
Participants.

Section 16. Requirements of Law

16.1 Governing Law. The Plan is intended to satisfy the requirements of Code
section 409A and the regulations issued thereunder, and shall be construed to
that end. Except as otherwise preempted by Federal law, the Plan, and all
agreements hereunder, shall be construed in accordance with and governed by the
laws of the State of Texas.

Section 17. Withholding Taxes

17.1 Withholding Taxes. The Company shall have the right to deduct from all cash
payments under the Plan or from a Participant’s compensation an amount necessary
to satisfy any federal, state, or local withholding tax requirements.

Section 18. Investment and Funding

18.1 Trust. The benefits to be derived by Participants in the Plan will be
funded through the Trust, provided, however, that any assets held by the Trust
shall at all times be subject to the claims of judgment creditors of the
Company.

18.2 Funding of Trust. With respect to Deferrals made under the Seven Year
Option, the Participating Employers shall, promptly after Deferrals are credited
to Participants’ Accounts, provide the Trust with resources in amounts equal to
the amounts of such Deferrals. With respect to Deferrals made under the
Retirement Option, the Participating Employers shall fund the Trust through the
purchase of corporate owned life insurance or such other Trust assets as may be
determined by the Committee from time to time.

 

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18.3 Distributions from Trust. If Trust assets allocated to any Participant’s
Account for a Plan Year are less than the amount required to affect a
distribution to such Participant provided for in this Plan, the applicable
Participating Employer will pay such difference either through the Trust or
directly to the Participant. If, after all obligations to Participants hereunder
have been fully satisfied, there remain assets in the Trust, such excess amounts
shall be returned to the Company.

18.4 Funding and Distribution Requirements Under Certain Circumstances. The
provisions of this Section 18 shall be subject to (and, if deemed to be
contradicting, overridden by) the provisions of Section 15 of this Plan.

EXECUTED February 16, 2006, to be effective as of January 1, 2005.

 

TXU CORP.

By:   /S/ RIZ CHAND  

Riz Chand, Senior Vice President,

 

Human Resources

 

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EXHIBIT “A”

PARTICIPATING EMPLOYERS

As of January 1, 2005

TXU Corp. and each of its direct and indirect

subsidiary companies.

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EXHIBIT “B”

Prior Plan Provisions

The following provisions shall apply to all future Plan participation of
Participants who make the one-time irrevocable election to continue to be
governed by the Prior Plan Provisions in Section 9.1 of the Plan:

1. Deferral Election. The Participant may elect, irrevocably, by written notice
to the Plan Administrator on an election form and in the manner prescribed by
the Plan Administrator, to defer a percentage of Salary, in one percent
(1%) increments not to exceed a maximum of ten percent (10%), during each Plan
Year, in the Retirement Option, the Seven Year Option, or a combination thereof.
Deferrals of Bonus shall not be permitted.

2. Matching Awards. The Company shall contribute to each Participant’s Account,
as a Matching Award, an amount equal to one hundred percent (100%) of the amount
of Salary deferred by the Participant. Such contribution shall be credited at
the time of the crediting of the Salary Deferral amount to be matched.

3. Investments, Earnings and Valuation.

(a) The Trustee shall invest, as soon as administratively feasible, all
contributions received for Accounts held in Trust under the Seven Year Option of
the Plan in a fixed income fund of investment grade securities under investment
guidelines established by the Committee. Interest received on the investments
shall be reinvested in such fund. All other contributions shall be invested in
accordance with investment guidelines established by the Committee.

(b) At the time of distribution, the Participant will receive his Account
balance including income determined by applying the Rate.

(c) The total of all assets held by the Trustee for Accounts held in Trust will
be deemed held in an unsegregated fund for valuation purposes. Each month the
Trustee shall determine the value of each unit by dividing the current value of
the fund by the total number of units held in all such Accounts. The value of
Accounts held in Trust under the Retirement Option of the Plan shall be
determined in the same manner as amounts deferred under the Seven Year Option of
the Plan.

4. Forfeitures. The following provisions shall apply with respect to forfeitures
in lieu of the provisions of Section 5.3 of the Plan. The amounts described
below shall be forfeited from an Account as of the date upon which the
forfeiture is created:

(a) Seven Year Option Forfeitures.

(i) Early Retirement. An amount equal to four percent (4%) of the total Account
balance for each full year Retirement occurs prior to Normal Retirement shall be
forfeited.

 

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(ii) Termination for other than Death, Disability or Retirement. If termination
of service with the Company occurs for reasons other than death, Disability, or
Retirement, income on and contributions to the Matching Account shall be
forfeited and income in excess of six percent (6%) per annum credited to Salary
Deferrals shall be forfeited.

(b) Retirement Option Forfeitures.

(i) Early Retirement. An amount equal to four percent (4%) of the total Account
balance for all non-vested Plan Years for each full year Retirement occurs prior
to Normal Retirement shall be forfeited.

(ii) Termination for other than Death, Disability or Retirement. If termination
of service with the Company occurs for reasons other than death, Disability, or
Retirement, income earned on and contributions to the Matching Account, for Plan
Years which are nonvested, shall be forfeited and income in excess of six
percent (6%) per annum credited to Salary Deferrals shall be forfeited for all
nonvested Plan Years.

5. Value of a Participant’s Account. The cash value of a Participant’s Account
shall be determined as of the last day of the applicable Deferral Period, or, if
earlier, at termination of employment.

6. Form and Timing of Distributions. The form and timing of distributions shall
be subject to Section 8 of the Plan; provided, however, that the installments
shall be in a fixed amount which shall amortize the value of the Participant’s
Account in annual installments over the distribution period elected by the
Participant under Section 8.2(b)(iii), using the Rate as a projected earnings
rate of return.

7. Certain Inapplicable Provisions. The provisions of Sections 3, 4.1, 4.3, 5.1,
5.3, 6.1, 8.1(a) and 8.2(b)(iv) of the Plan shall not apply and shall be of no
force or effect with respect to any portion of the Participant’s Account or his
prior or future Plan participation. All of the remaining provisions of the Plan
shall remain in full force and effect.

 

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