Exhibit 10(b)

AMENDED AND RESTATED EMPLOYMENT AGREEMENT

This AMENDED AND RESTATED EMPLOYMENT AGREEMENT (the “Agreement”) effective
January 1, 2010 is made by and between LUMINANT HOLDING COMPANY LLC
(“Luminant”), ENERGY FUTURE HOLDINGS CORP. (the parent entity of Luminant,
referred to herein as the “Company”) and Mark Allen McFarland (the “Executive”).

WITNESSETH

WHEREAS, the Parties previously entered into an employment agreement, as amended
and restated, dated July 7, 2008 (“Original Effective Date”); and

WHEREAS, the Parties desire to amend and restate the employment agreement, in
each case on the terms and conditions set forth herein.

NOW, THEREFORE, in consideration of the mutual promises, covenants and
obligations contained herein, the Company, Luminant and Executive agree as
follows:

1. Term of Employment. Subject to the provisions of Section 8 of this Agreement,
this Agreement and Executive’s employment hereunder shall be effective as of
January 1, 2010 (“Effective Date”) and shall end as of the end of the day on
July 7, 2011 (the “Initial Term”). Subject to the provisions of Section 8 of
this Agreement, this Agreement shall automatically renew for an additional one
(1) year period commencing immediately following the last day of the Initial
Term and each one (1) year period thereafter (each, a “Renewal Term”), unless,
the Company or Executive provides the other party written notice of non-renewal
at least sixty (60) days prior to the end of the applicable term. The period
during which Executive is employed by Luminant hereunder is hereinafter referred
to as the “Employment Term.”

2. Position and Duties.

(a) During the Employment Term, Executive shall serve as Chief Commercial
Officer of Luminant and as Executive Vice President of the Company. As Chief
Commercial Officer of Luminant, Executive shall have responsibility for Luminant
Energy (the entity responsible for the wholesale marketing, trading, origination
and other activities of Luminant), Generation Development, Risk, and
fundamentals and structuring duties, and the most senior manager of each
function for which Executive is solely responsible shall report to Executive. As
an Executive Vice President of the Company, Executive shall have responsibility
for Corporate Strategy and Corporate Development/M&A for the Company and its
subsidiaries. In both positions, Executive shall have such duties described
above and other duties, authority and responsibilities as shall be determined
from time to time by the President and CEO of the Company, which duties,
authority and responsibilities shall be customary for Executive’s position in a
business of similar size, type and nature to that of Luminant or the Company, as
appropriate. Executive shall report to the President and CEO of the Company with
respect to his responsibilities to Luminant and the Company. Executive shall
also serve as a member of the Strategy and Policy Committee for the Company.

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

(b) During the Employment Term, Executive will devote Executive’s full business
time and best efforts to performance of the duties described in Section 2(a) and
will not engage in any other business, profession or occupation for compensation
or otherwise which would conflict or interfere, directly or indirectly, with
performance of Executive’s duties. Executive may participate in civic and
charitable activities and may serve on the board of non-profit organizations and
on the board of one outside company, provided that Executive obtains prior
approval of the board of directors of the Company (as used herein, the term
“Board” shall mean the board of directors of the Company or a committee
designated by such board), which shall not be unreasonably withheld, prior to
accepting appointment or reappointment to a board of directors or trustees of
any other business, corporation or charitable organization; provided, further,
that, in each case, such activities do not conflict or interfere with the
performance of Executive’s duties hereunder or conflict with Section 9.

3. Base Salary. During the Employment Term, Luminant shall pay Executive a base
salary of $600,000 annually, payable in regular installments in accordance with
the Luminant’s usual payment practices. Executive may be entitled to increases
in his base salary in the sole discretion of the Board, which shall make such
determinations following its annual review process for executives. Executive’s
annual base salary, as in effect from time to time, is hereinafter referred to
as the “Base Salary.”

4. Annual Bonus. With respect to each fiscal year during the Employment Term,
Executive shall have the opportunity to earn an annual bonus award (the “Annual
Bonus”) pursuant to the terms and conditions of the EFH Executive Annual
Incentive Plan (“AIP”) of 85% of Base Salary in effect at the beginning of the
applicable fiscal year (“Target Award”). The amount of the Annual Bonus shall be
based upon the achievement of annual business performance targets and
Executive’s individual performance, both as approved by the Board; provided,
however, if Luminant, the Company and/or Executive achieve superior performance
targets as established by the Board, then Executive shall be eligible to receive
a bonus award of up to 200% of his Target Award. Each Annual Bonus, if any,
shall be paid to Executive within two and one half (2 1/2) months after the end
of the applicable fiscal year.

5. Executive Retention Award. Executive shall earn a long-term cash bonus award
equal to 75% of the aggregate Annual Bonus amount actually earned by Executive
for fiscal years 2009, 2010, and 2011 (the “Retention Award”); provided, that,
subject to the provisions of Section 8 hereof, Executive is employed by
Luminant, the Company or an Affiliate thereof on September 30, 2012. The
Retention Award earned by Executive shall be paid to Executive in a lump sum on
September 30, 2012.

6. Employee Benefits; Perquisites; Fringe Benefits.

(a) During the Employment Term, Executive shall be entitled to participate in
Luminant’s group health, life, disability, and tax qualified and nonqualified
savings and pension benefit plans, as in effect from time to time (collectively
“Employee Benefits”), on a basis which is no less favorable than is offered to
other similarly situated executives of the Company, to the extent consistent
with applicable law and the terms of the applicable plans.

 

2

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

(b) During the Employment Term, Executive shall be entitled to fringe benefits
consistent with the practices of the Company to the extent the Company provides
similar benefits to other similarly situated executives and Executive is
otherwise eligible to participate in such fringe benefit programs.

(c) At the beginning of each calendar year during the Employment Term, Executive
shall be entitled to five (5) weeks of paid vacation or the maximum number of
days Executive is entitled to under the Company’s vacation policy, whichever is
greater. Executive’s right to carry over unused vacation from one calendar year
to the next shall be determined by the Company’s vacation policy. Executive
shall also be entitled to paid sick leave benefits in accordance with those
provided to other similarly situated executives during the Employment Term.

7. Business Expenses. Subject to Luminant’s standard policies and procedures
with respect to expense reimbursement, Luminant shall reimburse Executive for,
or pay on behalf of Executive, reasonable and appropriate expenses incurred by
Executive for business related purposes, provided claims for reimbursement are
submitted timely and with appropriate supporting documentation.

8. Termination. Executive’s employment hereunder may be terminated by either the
Company or Executive at any time and for any reason; provided that, unless
otherwise provided herein, either party will be required to give the other party
at least sixty (60) days advance written notice of termination of Executive’s
employment. Except as provided in Section 11, the provisions of this Section 8
shall exclusively govern Executive’s rights upon termination of employment with
Luminant and its Affiliates (as defined in Section 9(c) below).

(a) By the Company For Cause or By Executive Due to Voluntary Resignation
Without Good Reason.

(i) Executive’s employment may be terminated by the Company for Cause (as
defined below) or by Executive’s voluntary resignation without Good Reason (as
defined below) and, in either case, Executive shall be entitled to receive:

(A) within ten (10) business days following the date of termination, accrued,
but unpaid Base Salary and unused vacation, earned through the date of
termination;

(B) in accordance with Section 4 (except to the extent payment is otherwise
deferred pursuant to any applicable deferred compensation arrangement with
Luminant), any accrued but unpaid Annual Bonus earned for any previously
completed fiscal year;

(C) within sixty (60) days of Executive’s claim for reimbursement, payment for
any unreimbursed business expenses properly incurred by Executive in accordance
with Luminant’s policies prior to the date of Executive’s termination; provided
that claims for reimbursement are accompanied by appropriate supporting
documentation and are submitted to Luminant within ninety (90) days following
the date of Executive’s termination of employment;

 

3

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

(D) Employee Benefits and stock compensation, if any, as to which Executive may
be entitled under the employee benefit plans of Luminant and its Affiliates or
any agreement between Luminant (and/or its Affiliates) and Executive; and

(E) any amounts payable or that may become payable pursuant to Section 8(g),
Section 10(g) and/or Section 11(a) (the amounts described in clauses (A) through
(E) hereof being referred to as the “Accrued Rights”).

Following termination of Executive’s employment by the Company for Cause or
voluntary resignation by Executive without Good Reason, except as set forth in
this Section 8(a)(i) and for any rights to indemnification and claims for
liability insurance coverage under officer and director policies, Executive
shall have no further rights to any compensation or any other benefits under
this Agreement.

(ii) For purposes of this Agreement, the terms:

(A) “Cause” shall mean (i) if, in performing his duties to Luminant and the
Company, Executive engages in conduct that constitutes (a) a material breach of
his fiduciary duty to Luminant, the Company or their shareholders (including,
without limitation, a material breach or attempted breach of the provisions
under Section 9), (b) gross neglect or (c) gross misconduct resulting in
material economic harm to Luminant or the Company, provided that any such
conduct described in (a), (b) or (c) is not cured within ten (10) business days
after Executive receives from the Company written notice thereof, or
(ii) Executive’s conviction of, or entry of a plea of guilty or nolo contendere
for, a felony or other crime involving moral turpitude.

(B) “Good Reason” shall mean (i) a reduction in Executive’s Base Salary or
Executive’s annual incentive compensation opportunity (other than a general
reduction in base salary or annual incentive compensation opportunities that
affects all salaried employees of Luminant proportionately); (ii) a transfer of
Executive’s primary workplace by more than thirty-five (35) miles from the
workplace on the Effective Date; (iii) a substantial adverse change in
Executive’s duties or responsibilities; (iv) any material breach of this
Agreement; or (v) an adverse change in Executive’s line of reporting to superior
officers pursuant to the terms of this Agreement; provided, however, that any
isolated, insubstantial or inadvertent failure by Luminant or the Company that
is cured within ten (10) business days after Executive gives the Company written
notice of any such event set forth above, shall not constitute Good Reason.

(b) Disability or Death.

(i) Executive’s employment shall terminate upon Executive’s death and may be
terminated by the Company if Executive has a Disability (as defined below) and,
in either case, Executive or Executive’s estate (as the case may be) shall be
entitled to receive:

(A) the Accrued Rights;

(B) a portion of the Target Award that Executive would have been entitled to
receive pursuant to Section 4 hereof for the fiscal year of termination, such

 

4

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

portion to be determined by multiplying the Target Award by a fraction, the
numerator of which is the number of days during which Executive was employed by
Luminant in the fiscal year of Executive’s termination, and the denominator of
which is 365 (the “Pro-Rata Bonus”), with such Pro-Rata Bonus payable to
Executive pursuant to Section 4 as if Executive’s employment had not terminated;
and

(C) if the termination occurs prior to September 30, 2012, the Retention Award,
or a portion thereof, that Executive would otherwise have been entitled to
receive pursuant to Section 5 hereof, calculated as (i) 75% of the aggregate
Annual Bonus amount(s) actually earned by Executive for any applicable fiscal
year completed prior to the date of Executive’s termination, plus (ii) for a
termination occurring in fiscal year 2010 or 2011, 75% of the Pro-Rata Bonus
amount calculated pursuant to Section 8(b)(i)(B) above (the sum of such amounts
referred to herein as the “Pro-Rata Retention Award”), with such Pro-Rata
Retention Award payable to Executive as soon as practicable but no later than
ninety (90) days following termination. For avoidance of doubt, the Retention
Award payment shall not be based on any Annual Bonus or Pro-Rata Bonus earned by
or paid to Executive with respect to fiscal year 2012.

Following Executive’s termination of employment due to death or Disability,
except as set forth in this Section 8(b)(i) and for any rights to
indemnification and claims for liability insurance coverage under officer and
director policies, Executive shall have no further rights to any compensation or
any other benefits under this Agreement.

(ii) “Disability” shall mean Executive’s physical or mental incapacitation and
consequent inability, with reasonable accommodation, for a period of six
consecutive months to perform Executive’s duties; provided, however, in the
event the Company temporarily replaces Executive, or transfers Executive’s
duties or responsibilities to another individual, on account of Executive’s
inability to perform such duties due to a mental or physical incapacity which
is, or is reasonably expected to become, a long-term disability, then
Executive’s employment shall not be deemed terminated by the Company and
Executive shall not be able to resign with Good Reason. Any question as to the
existence of a Disability as to which Executive and the Company cannot agree
shall be determined in writing by a qualified independent physician mutually
acceptable to Executive and the Company. If Executive and the Company cannot
agree on a qualified independent physician, each shall appoint a physician and
those two physicians shall select a third who shall make such determination in
writing. The determination of Disability made in writing to the Company and
Executive shall be final and conclusive for all purposes of the Agreement and
any other agreement with Executive that incorporates this definition of
Disability.

(c) By the Company Without Cause; Resignation by Executive for Good Reason.
Executive’s employment hereunder may be terminated by the Company without Cause
(other than by reason of death or Disability) or upon Executive’s resignation
for Good Reason and, in either case (except as otherwise provided in
Section 8(e)), Executive shall be entitled to receive:

(i) the Accrued Rights;

 

5

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

(ii) provided Executive (x) does not violate the restrictions set forth in
Section 9 of this Agreement and (y) executes, delivers and does not revoke a
general release of claims against Luminant and its Affiliates (excluding claims
for indemnification, claims for coverage under officer and director policies,
and claims as a stockholder of the Company):

(A) for a termination occurring on or prior to the second anniversary of the
Original Effective Date, a lump sum payment equal to (I) two (2) times the sum
of Executive’s annualized Base Salary and Executive’s Target Award, plus (II)
the Pro-Rata Retention Award, payable as soon as practicable but no later than
the earlier of: (a) March 15 following the calendar year in which termination
occurs or (b) ninety (90) days following termination; or

(B) for a termination occurring after the second anniversary of the Original
Effective Date, a lump sum payment equal to: (I) two (2) times Executive’s Base
Salary, (II) the Pro-Rata Bonus, and (III) the Pro-Rata Retention Award, payable
as soon as practicable but no later than the earlier of: (a) March 15 following
the calendar year in which termination occurs or (b) ninety (90) days following
termination.

(C) Executive, his spouse and eligible dependents (to the extent covered
immediately prior to such termination) shall continue to be eligible to
participate in all of Luminant’s group health plans on the same terms and
conditions as active employees of Luminant until the earlier of (x) two
(2) years from the date of termination of Executive’s employment (the “Severance
Period”), to the extent that Executive was eligible to participate in such plans
immediately prior to the date of termination, or (y) until Executive is, or
becomes, eligible for comparable coverage under the group health plans of a
subsequent employer. If Executive continues to receive benefits pursuant to this
Section 8(c)(ii)(C) when, in the absence of the benefits provided in this
Section 8(c)(ii)(C), Executive would not be entitled to continuation coverage
under Section 4980B of the Internal Revenue Code of 1986, as amended (the
“Code”), Executive shall receive reimbursement for all medical expenses no later
than the end of the calendar year immediately following the calendar year in
which the applicable expenses were incurred. The health care continuation
coverage period under the Consolidated Omnibus Budget Reconciliation Act of
1985, as amended (“COBRA”), Code Section 4980B, or any replacement or successor
provision of United States tax law, shall run concurrently with the Severance
Period.

Following Executive’s termination of employment by the Company without Cause
(other than by reason of Executive’s death or Disability) or upon Executive’s
resignation for Good Reason, except as set forth in this Section 8(c) or
otherwise provided in Section 8(e) and for any rights to indemnification and
claims for liability insurance coverage under officer and director policies,
Executive shall have no further rights to any compensation or any other benefits
under this Agreement.

(d) Expiration of Employment Term.

(i) In the event Executive elects not to extend the Employment Term pursuant to
Section 1 and Executive’s employment has not been earlier terminated pursuant to
Sections 8(a), (b), (c), or (e), the Employment Term shall expire and
Executive’s employment hereunder shall terminate as of the end of the day
immediately preceding the commencement of a subsequent Renewal Term, and
Executive shall be entitled to receive the Accrued Rights.

 

6

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

(ii) In the event the Company elects not to extend the Employment Term pursuant
to Section 1 and Executive’s employment has not been earlier terminated pursuant
to Sections 8(a), (b), (c), or (e), the Employment Term shall expire and
Executive’s employment hereunder shall terminate as of the end of the day
immediately preceding the commencement of a subsequent Renewal Term, and
Executive shall be entitled to receive the payments and benefits applicable to a
termination of Executive’s employment without Cause pursuant to Section 8(c) or
Section 8(e), as applicable. Except as set forth in this Section 8(d)(ii) and
for any rights to indemnification and claims for liability insurance coverage
under officer and director policies, Executive shall have no further rights to
any compensation or any other benefits under this Agreement.

(e) Change in Control. Notwithstanding any provision contained herein, if
Executive’s employment is terminated by the Company without Cause (other than by
reason of death or Disability) or if Executive resigns for Good Reason, in
either case, within twenty-four (24) months following a Change in Control (as
defined in the 2007 Stock Incentive Plan for Key Employees of Energy Future
Holdings Corp. and its Affiliates), Executive shall be entitled to receive:

(i) the Accrued Rights;

(ii) provided Executive (x) does not violate the restrictions set forth in
Section 9 of this Agreement and (y) executes, delivers and does not revoke a
general release of claims against Luminant and its Affiliates (excluding claims
for indemnification, claims for coverage under officer and director policies,
and claims as a stockholder of the Company), a lump sum payment equal to (A) two
(2) times the sum of Executive’s annualized Base Salary and Executive’s Target
Award, plus (B) the Pro-Rata Retention Award, payable as soon as practicable but
no later than the earlier of: (i) March 15 following the calendar year in which
termination occurs or (ii) ninety (90) days following termination; and

(iii) provided Executive (x) does not violate the restrictions set forth in
Section 9 of this Agreement and (y) executes, delivers and does not revoke a
general release of claims against Luminant and its Affiliates (excluding claims
for indemnification, claims for coverage under officer and director policies,
and claims as a stockholder of the Company), Executive, his spouse and eligible
dependents (to the extent covered immediately prior to such termination) shall
continue to be eligible to participate in all of Luminant’s group health plans
on the same terms and conditions as active employees of Luminant until the
earlier of (A) termination of the Severance Period, to the extent that Executive
was eligible to participate in such plans immediately prior to the date of
termination, or (B) until Executive is, or becomes, eligible for comparable
coverage under the group health plans of a subsequent employer. If Executive
continues to receive benefits pursuant to this Section 8(e)(iii) when, in the
absence of the benefits provided in this Section 8(e)(iii) Executive would not
be entitled to continuation coverage under Section 4980B of the Code, Executive
shall receive reimbursement for all medical expenses no later than the end of
the calendar year immediately following the calendar year in which the
applicable expenses were incurred. The health care continuation coverage period
under COBRA, Code Section 4980B, or any replacement or successor provision of
United States tax law, shall run concurrently with the Severance Period.

 

7

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

Following Executive’s termination of employment without Cause (other than by
reason of Executive’s death or Disability) or upon Executive’s resignation for
Good Reason, in either case, within twenty-four (24) months following a Change
in Control, except as set forth in this Section 8(e) and for any rights to
indemnification and claims for liability insurance coverage under officer and
director policies, Executive shall have no further rights to any compensation or
any other benefits under this Agreement.

(f) Notice of Termination. Any purported termination of employment by the
Company or by Executive (other than due to Executive’s death) shall be
communicated by written Notice of Termination to the other party in accordance
with Section 10(j) hereof. For purposes of this Agreement, a “Notice of
Termination” shall mean a notice indicating the specific termination provision
in this Agreement relied upon and shall set forth in reasonable detail the facts
and circumstances claimed to provide a basis for termination of employment under
the provision so indicated.

(g) Section 4999. If, by reason of, or in connection with, any transaction that
occurs after the Original Effective Date, Executive would be subject to the
imposition of the excise tax imposed by Section 4999 of the Code related to
Executive’s employment with Luminant, whether before or after termination of
Executive’s employment, but the imposition of such tax could be avoided by
approval of shareholders described in Section 280G(b)(5)(B) of the Code, then
Executive may ask the Company to seek such approval, in which case the Company
will use its reasonable best efforts to cause such approval to be obtained and
Executive will cooperate and execute such waivers as may be necessary so that
such approval avoids imposition of any excise tax under Section 4999. If
Executive fails to request that the Company seek such approval, or if Executive
does request that the Company seek such approval, but fails to cooperate and
execute such waivers as may be necessary in the approval process, Exhibit I
shall not apply and Executive shall not be entitled to any gross-up payment for
any resulting tax under Section 4999. If such approval, even if sought and
obtained, would not avoid imposition of the excise tax imposed under
Section 4999, then the provisions of Exhibit I attached hereto shall apply
without any precedent obligation of Executive to seek such approval.

9. Restrictive Covenants.

(a) In consideration of the Company and Luminant entering into this Agreement
with Executive and hereby promising and committing themselves to provide
Executive with Confidential Information and/or specialized training after
Executive executes this Agreement, Executive shall not, directly or indirectly:

(i) at any time during or after the Employment Term, disclose any Confidential
Information pertaining to the business of Luminant, the Sponsor Group, or any of
their respective Affiliates, except when required to perform his duties to
Luminant or one of its Affiliates, or by law or judicial process, provided that
Executive gives Luminant reasonable notice of any legal or judicial proceeding
requiring Executive to disclose Confidential Information and an opportunity to
challenge the disclosure of any such information, and Executive agrees to
provide such reasonable notice in writing to:

General Counsel

Energy Future Holdings Corp.

1601 Bryan Street, 41st Floor

Dallas, Texas 75201

(214) 812-5389 (facsimile);

 

8

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

(ii) at any time during the Employment Term and for a period of eighteen
(18) months thereafter (the “Non-Compete Period”), directly or indirectly, act
as a proprietor, investor, director, officer, employee, substantial stockholder,
consultant, or partner in any Competing Business in Texas or any other
geographic area in which Texas Energy Future Holdings Limited Partnership, the
Company or any of their respective subsidiaries operates or conducts business;
or

(iii) at any time during the Employment Term and for a period of eighteen
(18) months thereafter, directly or indirectly (A) solicit customers or clients
of Luminant or any of its Affiliates to terminate their relationship with
Luminant or any of its Affiliates or otherwise solicit such customers or clients
to compete with any business of Luminant or any of its Affiliates, or
(B) solicit or offer employment to any person who is, or has been at any time
during the twelve (12) months immediately preceding the termination of
Executive’s employment, employed by Luminant or any of its Affiliates;

provided that in each of (ii) and (iii) above, such restrictions shall not apply
with respect to any member of the Sponsor Group or any of its Affiliates that is
not engaged in any business that competes, directly or indirectly, with the
Company or any of its subsidiaries in any geographic area where they operate.
Notwithstanding the foregoing, for the purposes of this Section 9(a),
(A) Executive may, directly or indirectly own, solely as an investment,
securities of any Person engaged in the business of Luminant or its Affiliates
that are publicly traded on a national or regional stock exchange or quotation
system or on the over-the-counter market if Executive (I) is not a controlling
person of, or a member of a group which controls, such Person and (II) does not,
directly or indirectly, own 5% or more of any class of securities of such
Person, and (B) the Non-Compete Period shall not be triggered by any exercise of
tag-along rights under the Sale Participation Agreement, by and between the
Company (and related parties) and Executive (the “Sale Participation Agreement”)
or Drag Transaction (as defined in the Sale Participation Agreement) that may
occur after the date hereof.

(b) Notwithstanding clause (a) above, if at any time a court holds that the
restrictions stated in such clause (a) are unreasonable or otherwise
unenforceable under circumstances then existing, the parties hereto agree that
the maximum period, scope or geographic area determined to be reasonable under
such circumstances by such court will be substituted for the stated period,
scope or area. Because Executive’s services are unique and because Executive has
had access to Confidential Information, the parties hereto agree that money
damages will be an inadequate remedy for any breach of this Agreement. In the
event of a breach or threatened breach of this Agreement, Luminant, the Company
or their respective successors or assigns may, in addition to other rights and
remedies existing in their favor, apply

 

9

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

to any court of competent jurisdiction for specific performance and/or
injunctive relief in order to enforce, or prevent any violations of, the
provisions hereof (without the posting of a bond or other security).
Notwithstanding the foregoing, in the event Executive breaches the covenants set
forth in this Section 9, the Company’s rights and remedies with respect
Executive’s Options, Option Stock, and Stock and payments related thereto, as
those terms are defined in the Management Stockholder’s Agreement, by and
between the Company (and related parties) and Executive (the “Management
Stockholder’s Agreement”) shall be limited to those set forth in Section 22(c)
of the Management Stockholder’s Agreement.

(c) For purposes of this Agreement, the terms listed below shall be defined as
follows:

(i) “Affiliate” shall mean with respect to any Person, any entity directly or
indirectly controlling, controlled by or under common control with such Person;
provided, however, for purposes of this Agreement, Texas Energy Future
Co-Invest, LP shall not be deemed to be an Affiliate of the Sponsor Group or any
member of the Sponsor Group.

(ii) “Competing Business” shall mean any business that directly or indirectly
competes, at the relevant determination date, with one or more of the businesses
of Luminant or any of its Affiliates in any geographic area where Texas Energy
Future Holdings Limited Partnership, the Company, or any of their respective
subsidiaries operates.

(iii) “Confidential Information” shall mean information: (A) disclosed to or
known by Executive as a consequence of or through his employment with Luminant
or any Affiliate; (B) not publicly available or not generally known outside
Luminant or any Affiliate; and (C) that relates to the business and development
of Luminant or any Affiliate. Any information that does not meet each of the
criteria listed above (in subsections (A) – (C)) shall not constitute
Confidential Information. By way of example, Confidential Information shall
include but not be limited to the following: all non-public information or trade
secrets of Luminant or any Affiliate that gives Luminant or any Affiliate a
competitive business advantage or the opportunity of obtaining such advantage,
or disclosure of which might be detrimental to the interests of Luminant or any
Affiliate; information regarding Luminant’s or any Affiliate’s business
operations, such as financial and sales data (including budgets, forecasts, and
historical financial data), operational information, plans, and strategies;
business and marketing strategies and plans for various products and services;
rate and regulatory strategy and plans; information regarding suppliers,
consultants, employees, and contractors; technical information concerning
products, equipment, services, and processes; procurement procedures; pricing
and pricing techniques; information concerning past, current and prospective
customers, investors, and business affiliates; plans or strategies for expansion
or acquisitions; budgets; research; trading methodologies and terms;
communications information; evaluations, opinions, and interpretations of
information and data; marketing and merchandising techniques; electronic
databases; models; specifications; computer programs; contracts; bids or
proposals; technologies and methods; training methods and processes;
organizational structure; personnel information; payments or rates paid to
consultants or other service providers; and Luminant’s or any Affiliate’s files,
physical or electronic documents, equipment, and proprietary data or material in
whatever form including all copies of all such materials. By way of
clarification (but not limitation), information that Executive conceived or
developed during his employment with Luminant or an Affiliate or learned from
other employees or contractors of Luminant or an Affiliate that meets the
definition of Confidential Information shall be treated as such.

 

10

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

(iv) “Person” shall mean “person,” as such term is used for purposes of
Section 13(d) or 14(d) of the Securities Exchange Act of 1934, as amended (or
any successor thereto).

(v) “Restricted Group” shall mean, collectively the Company, its subsidiaries,
the members of the Sponsor Group and their respective Affiliates.

(vi) “Sponsor Group” shall mean Kohlberg Kravis Roberts & Co. L.P., TPG Capital
L.P., and Goldman, Sachs & Co.

10. Miscellaneous.

(a) Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of Texas without regard to conflicts of
laws principles thereof.

(b) Entire Agreement. Except as otherwise provided herein, this Agreement
contains the entire understanding of the parties with respect to the employment
of Executive by Luminant and/or its Affiliates and supersedes all prior
agreements and understandings. There are no restrictions, agreements, promises,
warranties, covenants or undertakings between the parties with respect to the
subject matter herein other than those expressly set forth herein.

(c) No Waiver. The failure of a party to insist upon strict adherence to any
term of this Agreement on any occasion shall not be considered a waiver of such
party’s rights or deprive such party of the right thereafter to insist upon
strict adherence to that term or any other term of this Agreement.

(d) Severability. In the event that any one or more of the provisions of this
Agreement shall be or become invalid, illegal or unenforceable in any respect,
the validity, legality and enforceability of the remaining provisions of this
Agreement shall not be affected thereby.

(e) Assignment. This Agreement, and all of Executive’s rights and duties
hereunder, shall not be assignable or delegable by Executive. Any purported
assignment or delegation by Executive in violation of the foregoing shall be
null and void ab initio and of no force and effect. This Agreement may be
assigned by Luminant or the Company to a person or entity which is an Affiliate
or a successor in interest to substantially all of the business operations of
Luminant or the Company, provided that the assignee expressly assumes all
obligations of Luminant and/or the Company under this Agreement and all other
related agreements to which Executive, the Company and/or Luminant are parties.
Upon such assignment, the rights and obligations of Luminant and/or the Company
hereunder shall become the rights and obligations of such Affiliate or successor
person or entity.

(f) Set Off; Mitigation. Except as otherwise provided in Section 10(o), the
obligations of Luminant and the Company to pay Executive the amounts provided
and to make

 

11

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

the arrangements provided hereunder shall not be subject to setoff, counterclaim
or recoupment of amounts owed by Executive to Luminant, the Company and/or their
Affiliates. Executive shall not be required to mitigate the amount of any
payment provided for pursuant to this Agreement by seeking other employment and,
except as expressly provided herein, no amount payable hereunder shall be
reduced by any payments or benefits received from such subsequent employment.

(g) Compliance with Section 409A of the Code. Notwithstanding anything herein to
the contrary, if, at the time of Executive’s termination of employment with
Luminant, the Company or Luminant has securities that are publicly traded on an
established securities market, and Executive is a “specified employee” (as
defined in Section 409A of the Code), and the deferral of the commencement of
any payments or benefits otherwise payable pursuant to Section 8 is necessary in
order to prevent any accelerated or additional tax under Section 409A of the
Code, then, to the extent permitted by Section 409A of the Code, Luminant will
defer any such payments or benefits hereunder (without any reduction in the
payments or benefits ultimately paid or provided to Executive) until the date
that is six (6) months following Executive’s termination of employment with
Luminant (or the earliest date as is permitted under Section 409A of the Code),
provided that amounts which do not exceed the limits set forth in
Section 402(g)(1)(B) of the Code in the year of such termination shall be
payable immediately upon termination. Any payments or benefits deferred due to
such requirements will be paid in a lump sum to Executive at the end of such six
(6) month period. Luminant shall consult with Executive in good faith regarding
the implementation of the provisions of this Section 10(g).

(h) Indemnity. The Company and its subsidiaries shall indemnify and hold
Executive harmless for all acts and omissions occurring during his employment or
service as a member of the board of directors or managers (as applicable) of any
of the Company and/or its subsidiaries, to the maximum extent provided under
each of the Company’s and such subsidiaries’ charter, certificate of formation,
limited partnership agreement, by-laws and applicable law. During the Employment
Term and for a term of six (6) years thereafter, the Company, or any successor
to the Company, the Company’s subsidiaries (to the extent not covered under the
terms of the Company’s insurance policy), and each of their respective
successors, shall purchase and maintain, at their own expense, directors’ and
officers’ liability insurance providing coverage for Executive in the same
amount as, and with terms no less favorable than, for members of their
respective boards of directors or managers (as applicable).

(i) Successors; Binding Agreement. This Agreement shall inure to the benefit of
and be binding upon personal or legal representatives, executors,
administrators, successors, heirs, distributees, devisees and legatees. In the
event of Executive’s death before receiving all amounts and benefits due to him
hereunder, such amounts shall be payable to Executive’s estate or as otherwise
provided under applicable benefit plans or arrangements.

(j) Notice. For the purpose of this Agreement, notices and all other
communications provided for in the Agreement shall be in writing and shall be
deemed to have been duly given when delivered by hand or overnight courier or
three (3) days after it has been mailed by United States registered mail, return
receipt requested, postage prepaid, addressed to the respective addresses set
forth below in this Agreement, or to such other address as either party may have
furnished to the other in writing in accordance herewith, except that notice of
change of address shall be effective only upon receipt.

 

If to Company or

Luminant to:

  

Energy Future Holdings Corp.

1601 Bryan Street, 41st Floor

Dallas, Texas 75201-3411

Attention: General Counsel

If to Executive to:    The most recent address on file with the Company

 

12

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

(k) Executive Representation. Executive hereby represents to Luminant and the
Company that his execution and delivery of this Agreement and performance of his
duties hereunder shall not constitute a breach of, or otherwise contravene, the
terms of any employment agreement, separation agreement or other agreement or
policy to which Executive is a party or otherwise bound.

(l) Captions; Section References. The captions included herein are for
convenience of reference only and shall be ignored in the construction or
interpretation hereof. All references to sections of statutes, regulations or
rules shall be deemed to be references to any successor sections.

(m) Further Assurances. The parties shall, with reasonable diligence, do all
things and provide all reasonable assurances as may be required to complete the
transactions contemplated by this Agreement, and each party shall provide such
further documents or instruments required by any other party as may be
reasonably necessary or desirable to give effect to this Agreement and carry out
its provisions.

(n) Cooperation. For a period of six (6) years after his termination, Executive
shall provide Executive’s reasonable cooperation in connection with any action
or proceeding (or any appeal from any action or proceeding) which relates to
events occurring during Executive’s employment hereunder, provided that the
Company and its Affiliates shall use reasonable efforts to avoid material
interference with Executive’s business or personal activities. The Company shall
pay all of Executive’s reasonable expenses incurred in connection with providing
such cooperation.

(o) Withholding. Luminant may withhold from any amounts payable under this
Agreement such federal, state and local taxes as may be required to be withheld
pursuant to any applicable law or regulation. In addition, Executive expressly
authorizes and agrees that any amounts he owes in relation to any travel or
credit cards issued or sponsored by Luminant or the Company, the energy
conservation program, the appliance purchase program, or salary, bonus, vacation
or other benefit overpayments, may be offset and deducted from any payments due
to Executive pursuant to this Agreement.

(p) Counterparts. This Agreement may be signed in counterparts, each of which
shall be an original, with the same effect as if the signatures thereto and
hereto were upon the same instrument.

 

13

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

(q) Amendments. This Agreement may not be altered, modified, or amended except
by written instrument signed by the parties hereto.

11. Special Employment Provisions.

(a) Survival of Prior Agreements. Notwithstanding Section 10(b), this Agreement
shall not supersede the Deferred Share Agreement, by and among the Company and
Executive, dated July 7, 2008.

(b) Severance Payments if Executive Elects Not to Renew Term. Notwithstanding
anything to the contrary herein, in the event Executive elects not to extend the
Employment Term pursuant to Section 1 and Executive’s employment has not been
earlier terminated pursuant to Sections 8(a), (b), (c), or (e), Executive shall
be entitled to receive, in addition to the Accrued Rights, the rights set forth
in Section 8(d)(ii) hereof.

 

14

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

IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement as of
the day and year first above written.

 

ENERGY FUTURE HOLDINGS CORP. By:  

    /s/ Richard J. Landy

  Richard J. Landy   Executive Vice President LUMINANT HOLDING COMPANY, LLC By:
 

    /s/ Richard J. Landy

  Richard J. Landy   Executive Vice President EXECUTIVE:

        /s/ Mark Allen McFarland

    Mark Allen McFarland

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

Exhibit I

Paragraph 1. In the event it shall be determined that any payment, benefit or
distribution (or combination thereof) by the Company, any Affiliate, or one or
more trusts established by the Company or any Affiliate for the benefit of their
employees, to or for the benefit of Executive (whether paid or payable or
distributed or distributable pursuant to the terms of this Agreement, or
otherwise) (a “Payment”) is subject to the excise tax imposed by Section 4999 of
the Code or any interest or penalties are incurred by Executive with respect to
such excise tax (such excise tax, together with any such interest and penalties,
hereinafter collectively referred to as the “Excise Tax”), Executive shall be
entitled to receive an additional payment (a “Gross-Up Payment”) in an amount
such that after payment by Executive of all taxes (including any interest or
penalties imposed with respect to such taxes), including, without limitation,
any federal, state and local income taxes and employment taxes (and any interest
and penalties imposed with respect thereto) and the Excise Tax imposed upon the
Gross-Up Payment, Executive retains an amount of the Gross-Up Payment equal to
the Excise Tax imposed upon the Payments.

Paragraph 2. All determinations required to be made under this Exhibit I,
including whether and when a Gross-Up Payment is required and the amount of such
Gross-Up Payment and the assumptions to be utilized in arriving at such
determination, shall be made by Deloitte & Touche LLP, Alvarez & Marsal, or such
other nationally recognized accounting firm as may be designated by the Company
(the “Accounting Firm”), which shall provide detailed supporting calculations
both to the Company and Executive within ten (10) business days of the receipt
of notice from Executive that there has been a Payment, or such earlier time as
is requested by the Company; provided that for purposes of determining the
amount of any Gross-Up Payment, Executive shall be deemed to pay federal income
tax at the highest marginal rates applicable to individuals in the calendar year
in which any such Gross-Up Payment is to be made and deemed to pay state and
local income taxes at the highest effective rates applicable to individuals in
the state or locality of Executive’s residence or place of employment in the
calendar year in which any such Gross-Up Payment is to be made, net of the
maximum reduction in federal income taxes that can be obtained from deduction of
such state and local taxes, taking into account limitations applicable to
individuals subject to federal income tax at the highest marginal rates. All
fees and expenses of the Accounting Firm shall be borne solely by the Company.
Any Gross-Up Payment, as determined pursuant to this Exhibit I, shall be paid by
the Company to Executive (or to the appropriate taxing authority on Executive’s
behalf) when due. If the Accounting Firm determines that no Excise Tax is
payable by Executive, it shall so indicate to Executive in writing. Any
determination by the Accounting Firm shall be binding upon the Company and
Executive (subject to Paragraph 3). As a result of the uncertainty in the
application of Section 4999 of the Code, it is possible that the amount of the
Gross-Up Payment determined by the Accounting Firm to be due to (or on behalf
of) Executive was lower than the amount actually due (“Underpayment”). In the
event that the Company exhausts its remedies pursuant to Paragraph 3 of
Exhibit I and Executive thereafter is required to make a payment of any Excise
Tax, the Accounting Firm shall determine the amount of the Underpayment that has
occurred, and any such Underpayment shall be promptly paid by the Company to or
for the benefit of Executive (but in any case no later than the calendar year
following the calendar year in which such tax was payable).

 

Exhibit I-1

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

Paragraph 3. Executive shall notify the Company in writing of any claim by the
Internal Revenue Service that, if successful, would require the payment by the
Company of any Gross-Up Payment. Such notification shall be given as soon as
practicable but no later than ten (10) business days after Executive is informed
in writing of such claim and shall apprise the Company of the nature of such
claim and the date on which such claim is requested to be paid. Executive shall
not pay such claim prior to the expiration of the thirty (30) day period
following the date on which he gives such notice to the Company (or such shorter
period ending on the date that any payment of taxes with respect to such claim
is due). If the Company notifies Executive in writing prior to the expiration of
such period that it desires to contest such claim, Executive shall (i) give the
Company any information reasonably requested by the Company relating to such
claim, (ii) take such action in connection with contesting such claim as the
Company shall reasonably request in writing from time to time, including,
without limitation, accepting legal representation with respect to such claim by
an attorney reasonably selected by the Company, (iii) cooperate with the Company
in good faith in order to effectively contest such claim and (iv) permit the
Company to participate in any proceedings relating to such claim; provided,
however, that the Company shall bear and pay directly all costs and expenses
(including additional interest and penalties) incurred in connection with such
contest and shall indemnify and hold Executive harmless, on an after-tax basis,
for any Excise Tax or income tax (including interest and penalties with respect
thereto) imposed as a result of such representation and payment of costs and
expenses. Without limitation on the foregoing provisions of this Paragraph 3,
the Company shall control all proceedings taken in connection with such contest
and, at its sole option, may pursue or forego any and all administrative
appeals, proceedings, hearings and conferences with the taxing authority in
respect of such claim and may, at its sole option, either direct Executive to
pay the tax claimed and sue for a refund or contest the claim in any permissible
manner, and Executive agrees to prosecute such contest to a determination before
any administrative tribunal, in a court of initial jurisdiction and in one
(1) or more appellate courts, as the Company shall determine; provided that if
the Company directs Executive to pay such claim and sue for a refund, the
Company shall advance the amount of such payment to Executive, on an
interest-free basis, and shall indemnify and hold Executive harmless, on an
after-tax basis, from any Excise Tax or income tax (including interest or
penalties with respect thereto) imposed with respect to such advance or with
respect to any imputed income with respect to such advance; provided, further,
that if Executive is required to extend the statute of limitations to enable the
Company to contest such claim, Executive may limit this extension solely to such
contested amount. The Company’s control of the contest shall be limited to
issues with respect to which a Gross-Up Payment would be payable hereunder and
Executive shall be entitled to settle or contest, as the case may be, any other
issue raised by the Internal Revenue Service or any other taxing authority.

Paragraph 4. If, after the receipt by Executive of an amount paid or advanced by
the Company pursuant to this Exhibit I, Executive becomes entitled to receive
any refund with respect to a Gross-Up Payment, Executive shall (subject to the
Company’s complying with the requirements of Paragraph 3 of this Exhibit I)
promptly pay to the Company the amount of such refund received (together with
any interest paid or credited thereon after taxes applicable thereto). If, after
the receipt by Executive of an amount advanced by the Company pursuant to
Paragraph 3 of this Exhibit I, a determination is made that Executive shall not
be entitled to any refund with respect to such claim, and the Company does not
notify Executive in writing of its intent to contest such denial of refund prior
to the expiration of thirty (30) days after such determination,

 

Exhibit I-2

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

then such advance shall be forgiven and shall not be required to be repaid, and
the amount of such advance shall offset, to the extent thereof, the amount of
the Gross-Up Payment required to be paid.

Paragraph 5. For the avoidance of doubt, all payments to or for the benefit of
Executive provided for in this Exhibit I shall be made no later than the end of
the calendar year in which the applicable Excise Tax has become due, or if as a
result a tax audit or litigation, it is determined that no additional Excise Tax
has become due, the end of the calendar year in which the audit is completed or
there is a final and non-appealable settlement or other resolution.

 

Exhibit I-3