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                                                                    Exhibit 10.7

                           TEXAS GENCO HOLDINGS, INC.
                          SEVERANCE BENEFITS PLAN #2060

                   SUMMARY PLAN DESCRIPTION AND PLAN DOCUMENT

                           (EFFECTIVE OCTOBER 1, 2004)
                           TEXAS GENCO HOLDINGS, INC.

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                          SEVERANCE BENEFITS PLAN #2060

                   SUMMARY PLAN DESCRIPTION AND PLAN DOCUMENT

                           (EFFECTIVE OCTOBER 1, 2004)

1.    Purpose of the Plan

      The purposes of the Texas Genco Holdings, Inc. Severance Benefits Plan
      #2060, which shall be effective as of October 1, 2004 (the "Plan"), are:

      (a)   To make Severance Benefits available to certain eligible employees
            that will financially assist with their transition following certain
            terminations of employment from Texas Genco Holdings, Inc. (the
            "Company"), Texas Genco Purchaser (as defined herein) or their
            successors while the Plan is in effect; and

      (b)   To resolve any possible claims arising out of employment, including
            termination, by providing such employees with severance benefits in
            return for a waiver and release from liability.

      If an employee qualifies for a benefit under this Plan, payments under
      this Plan are not required by any legal obligation other than the Plan
      itself. This Plan will be binding upon and inure to the benefit of the
      Company and any successor to the Company, including, without limitation,
      Texas Genco Purchaser, and its affiliates, on and after the Texas Genco
      Sale Date (and such successor will thereafter be deemed the "Company" for
      purposes of this Plan), but will not otherwise be assignable, transferable
      or delegable by the Company.

      This Plan represents an amendment and restatement of all prior severance
      plans, practices or policies (other than individual contracts providing
      for severance benefits) in effect with the Company (or an affiliate) as of
      the effective date hereof with respect to the employees. All such prior
      severance plans, practices and policies are hereby superseded by this
      Plan, and discontinued and terminated with respect to the employees.

2.    Definitions

      As used in this Plan, the following terms shall have the following
      meanings (and the singular includes the plural, unless the context clearly
      indicates otherwise):

      ACTIVE EMPLOYEE RATE: The monthly out-of-pocket cost or premium (exclusive
      of any portion of the cost or premium paid by the Company or an Affiliate)
      paid by active employees of the Company or its Affiliate (based on grade
      level or position) who are similarly situated as the Employee as of his or
      her Termination Date for coverage under a medical, dental and/or vision
      plan of the Company.

      AFFILIATE: Each corporation, partnership, or other business entity which
      is 50% or more owned, directly or indirectly, by the Company.

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      CAUSE: Termination from employment due to gross negligence in the
      performance of duties; intentional and continued failure to perform
      duties; intentional engagement in conduct which is materially injurious to
      the Company or its Affiliates, employees or property (monetarily or
      otherwise); an intentional act of fraud, embezzlement or theft; an
      intentional wrongful disclosure of confidential or proprietary information
      of the Company or an Affiliate; or conviction of a felony or a misdemeanor
      involving moral turpitude. For this purpose, an act or failure to act on
      the part of an Employee will be deemed "intentional" only if done or
      omitted to be done by the Employee not in good faith and without
      reasonable belief that his or her action or omission was in the best
      interest of the Company, and no act or failure to act on the part of the
      Employee will be deemed "intentional" if it was due primarily to an error
      in judgment or negligence.

      CENTERPOINT ENERGY: CenterPoint Energy, Inc., a Texas corporation, and any
      successor to CenterPoint Energy, Inc.

      COBRA: The Consolidated Omnibus Budget Reconciliation Act of 1985, as
      amended from time to time, currently embodied in Internal Revenue Code
      Section 4980B, which provides for continuation of group health plan
      coverage in certain circumstances.

      COBRA RATE: The cost of continued coverage under COBRA, that currently
      being 102% of the full group rate (including the employee's share and the
      employer's share of the group coverage cost and a 2% administrative fee).

      COMPANY: Texas Genco Holdings, Inc., a Texas corporation, and any
      successor to Texas Genco Holdings, Inc.

      COMPENSATION: The Employee's annual base salary or annualized base rate of
      pay plus target bonus under the STI Plan.

      COVERED TERMINATION: Any termination of the Employee's employment with the
      Company or any Affiliate thereof within two years after the Texas Genco
      Sale Date that does not result from (i) death; (ii) Disability entitling
      the Employee to benefits under an LTD Plan; (iii) involuntary termination
      for Cause; or (iv) resignation by the Employee, unless such resignation is
      for Good Reason.

      DISABILITY: Disability within the meaning of the LTD Plan that covers the
      Employee.

      EMPLOYEE: Sean Skinner and Jerome Svatek, who shall be collectively
      referred to as "Employee" or "Employees" herein.

      ERISA: The Employee Retirement Income Security Act of 1974, as amended.

      GOOD REASON: Any resignation from employment by the Employee with the
      Company or an Affiliate thereof within two years after the Texas Genco
      Sale Date that results from (i) a reduction in the Employee's annualized
      base salary or annualized base rate of pay and/or bonus level under the
      STI Plan (i.e., 25% to 35% as applicable per Employee) as in effect
      immediately prior to the Texas Genco Sale Date; or (ii) a change in the
      location of the Employee's principal place of employment with the Company
      by more than 50

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      miles from the location where the Employee was principally employed
      immediately prior to the Texas Genco Sale Date.

      LTD PLAN: A long-term disability plan of the Company, an Affiliate or, on
      and after the Texas Genco Sale Date, the Texas Genco Purchaser.

      PARTICIPANT: An Employee who meets the requirements set forth in Section
      3(a) of this Plan.

      PLAN: The Texas Genco Holdings, Inc. Severance Benefits Plan #2060,
      effective as of October 1, 2004.

      PLAN ADMINISTRATOR: Prior to the Texas Genco Sale Date, the CenterPoint
      Energy, Inc. Benefits Committee, and on and after the Texas Genco Sale
      Date, the Texas Genco Purchaser or the committee designated by the Texas
      Genco Purchaser.

      PERSON: Any individual, corporation, partnership, joint venture, trust,
      unincorporated organization or government or any agency or political
      subdivision thereof.

      SERVICE: Service credited under the Texas Genco Retirement Plan, as in
      effect on the Closing Date; provided, however, that, to the extent not
      credited as Service under the Texas Genco Retirement Plan, the term
      Service for purposes of this Plan shall include the Participant's
      employment with the Company or its Affiliates during the period commencing
      on the Texas Genco Sale Date and ending on his or her Termination Date.

      SEVERANCE BENEFITS: Benefits described in Sections 4, 5(a)(i), 5(a)(ii)
      and 5(a)(iii) below.

      STI PLAN: The Texas Genco Short Term Incentive Plan, as in effect from
      time to time, or any similar successor plan adopted by the Company.

      TERMINATION DATE: The last day on which an Employee is carried on the
      payroll of the Company or an Affiliate.

      TEXAS GENCO PURCHASER: GC Power Acquisition LLC, a Delaware limited
      liability company.

      TEXAS GENCO SALE DATE: The STP Acquisition Closing Date, as defined in
      that certain Transaction Agreement among CenterPoint Energy, Inc., Utility
      Holding, LLC, NN Houston Sub, Inc., Texas Genco Holdings, Inc., HPC Merger
      Sub, Inc. and GC Power Acquisition LLC, dated as of July 21, 2004.

      WAIVER AND RELEASE: The legal document, in a form substantially similar to
      the form attached hereto as Exhibit A, in which an Employee, in exchange
      for Severance Benefits under the Plan, among other things, releases, among
      other parties, the Company and all of its Affiliates, CenterPoint Energy
      and all of its affiliates, their directors, officers, employees and
      agents, their employee benefit plans, and the fiduciaries and agents of
      said plans from liability and damages in any way related to the Employee's
      employment with or separation from employment with the Company or any of
      its Affiliates.

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3.    Participation

      (a)   Participants

            An Employee shall be eligible to become a Participant in the Plan
            and receive Severance Benefits only if the Employee (i) experiences
            a Covered Termination, (ii) executes and returns to the Company a
            Waiver and Release within the time period prescribed by the Company
            following the date of the Employee's Covered Termination, and (iii)
            does not revoke such Waiver and Release within the time period
            prescribed by the Company after the date of execution. Employees who
            meet the requirements in the preceding sentence are referred to as
            "Participants."

      (b)   Waiver and Release

            Each Employee who is eligible to be a Participant shall be given a
            form of Waiver and Release and a listing of the job titles and ages
            of all individuals eligible or selected to become Participants and
            the ages and job titles of all individuals in the same job
            classification or organizational unit who are not eligible or
            selected to become Participants. EACH EMPLOYEE IS HEREBY ADVISED TO
            CONSULT AN ATTORNEY BEFORE SIGNING A WAIVER AND RELEASE.

4.    Cash Severance Benefit

      (a)   An Employee who qualifies as a Participant under Section 3 shall be
            entitled to a lump-sum cash Severance Benefit in an amount equal to
            the Participant's Compensation determined immediately prior to (i)
            the Texas Genco Sale Date or (ii) the date of his or her Covered
            Termination, whichever is greater, multiplied by one.

      (b)   A cash Severance Benefit calculated pursuant to Section 4(a) for a
            Participant shall be reduced by the amount of any cash compensation
            payable to the Participant by the Company or its Affiliates on
            account of the termination of the Participant's employment pursuant
            to (i) a written employment agreement with the Company or its
            Affiliates, (ii) another severance plan or program of the Company or
            its Affiliates, or (iii) any other obligation, whether by contract,
            applicable law, or otherwise of the Company or any other individual
            or entity to provide a payment to such Participant in the event of
            an involuntary termination of such Participant's employment with the
            Company or an Affiliate.

      Notwithstanding the foregoing, the amount of any lump-sum cash Severance
      Benefit otherwise payable to a Participant shall be reduced by any monies
      owed by the Participant to the Company or an Affiliate, including, but not
      limited to, any overpayments made to the Participant by the Company or an
      Affiliate and the balance of any loan by the Company or an Affiliate to
      the Participant that is outstanding at the time that the cash Severance
      Benefit is paid.

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5.    Continuation of Other Benefits

      (a)   Participants

            In addition to the cash Severance Benefit, a Participant shall be
            entitled to the following benefits:

            (i)   Medical/Dental/Vision Plan Benefits

                  For the applicable period required by COBRA, a Participant
                  shall be entitled to continue the medical, dental and vision
                  plan coverage in effect for active employees during such
                  period if the Participant is eligible for and timely elects
                  continuation of such coverage in accordance with COBRA. The
                  Participant shall pay the Active Employee Rate with respect to
                  such coverage for one year and thereafter the full COBRA Rate
                  with respect to such coverage. The eligibility of the
                  Participant to continue such coverage at both the Active
                  Employee Rate and full COBRA Rate shall not exceed a period of
                  18 months unless a longer period is required by COBRA. Such
                  benefits shall be governed by and subject to (i) the terms and
                  conditions of the plan documents providing such benefits,
                  including the reservation of the right to amend or terminate
                  such benefits under those plan documents at any time, and (ii)
                  the provisions of COBRA. The period of coverage provided under
                  this section shall constitute continuation coverage required
                  by COBRA.

                  If, as of the date of his or her Covered Termination, the
                  Participant is covered by a Company retiree medical plan and
                  has (i) attained age 50, but not age 55, and (ii) completed at
                  least 20 years of Service, such Participant shall have the
                  same access to the Company's retiree medical plan as the
                  Participant would have had had the Participant terminated his
                  or her employment immediately after attaining age 55;
                  provided, however, that such access shall not commence prior
                  to the date the Participant actually attains age 55.

            (ii)  Outplacement

                  The Participant shall be offered outplacement services up to
                  $10,000 on his or her Termination Date.

            (iii) Retirement Plan Benefits

                  Provided the Participant is a participant in a tax-qualified
                  pension plan maintained or contributed to by the Company (the
                  "Retirement Plan") as of the Participant's Termination Date,
                  such Participant who as of his or her Termination Date has (A)
                  attained age 50, but not yet 55, and (B) completed at least 20
                  years of Service shall be deemed eligible to receive a benefit
                  equal to the early retirement benefit (payable in a form other
                  than a lump-sum) under the Retirement Plan which the
                  Participant would have been eligible to receive thereunder had
                  the Participant terminated his or

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                  her employment immediately after attaining age 55; provided,
                  however, that such benefit shall not commence prior to the
                  date the Participant actually attains age 55. For benefit
                  accrual purposes, the Participant's benefit under the
                  Retirement Plan shall be based on his or her actual Service at
                  such Participant's Termination Date.

            (iv)  All Other Benefit Plans or Programs

                  A Participant's participation in all other employee benefit
                  plans and/or programs at the Company and the Affiliates shall
                  cease as of his or her Termination Date, subject to the terms
                  and conditions of the governing documents of those employee
                  benefit plans and/or programs.

      (b)   Ineligible Employees

            An Employee who does not satisfy all the requirements of Section 3
            shall be entitled to no benefits under the Plan. Any such Employee
            shall, however, be entitled to receive those benefits, following his
            or her Termination Date, to which he or she is otherwise entitled
            under the provisions of the Retirement Plan or any other employee
            benefit program in which such Employee is a participant on his or
            her Termination Date.

6.    Confidential and Proprietary Business Information and Nonsolicitation
      Obligations

      Notwithstanding any provision of this Plan to the contrary, an Employee's
      entitlement to the benefits provided for under this Plan shall be fully
      subject to the provisions of the Waiver and Release regarding confidential
      and proprietary business information and non-solicitation, and the Company
      and the Affiliates shall be entitled to take all actions specified in the
      Waiver and Release with respect to an Employee who fails to comply with
      those provisions.

7.    Unemployment; Taxes

      Payments under this Plan will not be reduced because of any unemployment
      benefits an Employee may be eligible to receive under applicable federal
      or state unemployment laws. Any required income tax withholding and FICA
      (Social Security) taxes shall be deducted from any benefit paid under the
      Plan.

8.    When the Severance Benefits Will be Paid

      Within 60 days following the date that a Participant returns an executed
      Waiver and Release, the Participant's cash Severance Benefit described in
      Section 4 will be paid to the Participant in a single lump sum and
      outplacement services described in Section 5(a)(ii) will commence.
      Participants receiving Severance Benefits shall not be considered
      employees of the Company or any Affiliate for any purpose after their
      Termination Dates, nor shall any Severance Benefits be considered for
      purposes of computing benefits under or making contributions to any
      employee benefit plan maintained by the Company or any Affiliate.

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      If a Participant dies after his or her Termination Date and after
      executing the Waiver and Release (without having timely revoked it) but
      before receiving his or her cash Severance Benefit, any cash Severance
      Benefit will instead be paid (a) to the Participant's beneficiary (or
      beneficiaries) designated under the Company's life insurance plan covering
      the Employee on his or her Termination Date, if such beneficiary is
      living, or (b) if none is so designated or living, to the executor of the
      Participant's estate, in a lump sum as soon as practicable after the date
      of death.

      Payments of other benefits described in Section 5 will be made in
      accordance with the provisions of the governing plan documents and the
      applicable policies of the Company and the Affiliates.

9.    Non-Assignment of Severance Benefits

      No benefit under this Plan shall be subject to anticipation, alienation,
      sale, transfer, assignment, pledge, encumbrance or charge, voluntary or
      involuntary, by operation of law or otherwise, and any attempt at such a
      transaction shall be void. Also, no benefit under this Plan shall be
      liable for or subject to the debts, contracts, liabilities, engagements or
      torts of the person entitled to it. Notwithstanding the foregoing, the
      amount of any cash Severance Benefit otherwise due to a Participant shall
      be reduced by any monies owed by the Participant to the Company or an
      Affiliate as provided in Section 4 hereof.

10.   Plan Amendment and Termination

      The Plan shall be subject to amendment, change, substitution, deletion,
      revocation or termination by the Company at any time prior to the Texas
      Genco Sale Date, other than at the request of a Texas Genco Purchaser or
      other third party who has taken steps reasonably calculated to result in
      the Texas Genco Sale Date. On and after the Texas Genco Sale Date, except
      to the extent necessary for the Company to pay benefits to Participants
      who qualified for a benefit under this Plan (including the requirement to
      return the signed Waiver and Release to the Company and not revoke it
      within seven days after signing it), the Plan shall automatically
      terminate two years from the Texas Genco Sale Date. After the Texas Genco
      Sale Date, the Plan shall not be subject to amendment, change,
      substitution, deletion, revocation or termination in any respect which
      adversely affects the rights of an Employee or Participant without the
      consent of that Employee or Participant.

11.   Making A Claim

      (a)   How to Submit a Claim

            If benefits due under this Plan have not been provided within the
            time frame specified in Section 8, a Participant or his or her
            authorized and designated representative (collectively, the
            "Applicant") must request those benefits in writing from the Plan
            Administrator. Such application shall set forth the nature of the
            claim and any other information that the Plan Administrator may
            reasonably request. The Plan Administrator shall notify the
            Applicant of the benefits determination within a reasonable time
            after receipt of the claim, such time not to

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            exceed 90 days unless special circumstances require an extension of
            time for processing the claim. If such an extension is required,
            written notice of the extension shall be furnished to the Applicant
            prior to the end of the initial 90-day period. In no event shall
            such an extension exceed a period of 90 days from the end of the
            initial period. The extension notice shall indicate the special
            circumstances requiring an extension of time, and the date by which
            a final decision is expected to be rendered.

            Notice of a claim denial, in whole or in part, shall be set forth in
            a written or electronic notice in a manner calculated to be
            understood by the Applicant and shall contain the following:

            (i)   the specific reason or reasons for the denial; and

            (ii)  specific reference to the pertinent Plan provisions on which
                  the denial is based; and

            (iii) a description of any additional material or information
                  necessary for the Applicant to perfect the claim and an
                  explanation of why such material or information is necessary;
                  and

            (iv)  an explanation of the Plan's claims review procedure, the time
                  limits applicable to such procedures, and a statement of the
                  Participant's rights following an adverse benefit
                  determination on review, including a statement of an
                  Applicant's right to file a lawsuit under ERISA if the claim
                  is denied on appeal.

            An Applicant shall be given timely written notice of the time limits
            set forth herein for determinations on claims, appeal of claim
            denial and decisions on appeal.

      (b)   Claims Review Procedure

            If a written claim results in a claim denial, either in whole or in
            part, in accordance with Section 11(a), the Applicant has the right
            to appeal as described in this Section 11(b). The appeal must be in
            writing. Upon receipt of a claim denial, an Applicant may send a
            written request, including any additional information supporting the
            claim, for reconsideration to the Plan Administrator within 60 days
            of receiving notification that the claim is denied. Upon review, the
            Plan Administrator will consider all comments, documents, records,
            and other information submitted by the Participant related to the
            claim without regard to whether such information was submitted or
            considered in the initial benefit determination.

            The Plan Administrator shall render a decision no later than the
            date of its regularly scheduled meeting next following receipt of a
            request for review, except that a decision may be rendered no later
            than the second such meeting if the request is received within 30
            days of the first meeting. The Applicant may request a formal
            hearing before the Plan Administrator which the Plan

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            Administrator may grant in its discretion. Notwithstanding the
            foregoing, under special circumstances which require an extension of
            time for rendering a decision (including, but not limited to, the
            need to hold a hearing), the decision may be rendered not later than
            the date of the third regularly scheduled Plan Administrator meeting
            following the receipt of the request for review. If such an
            extension is required, the Applicant will be advised in writing
            before the extension begins.

            The Plan Administrator will provide written or electronic notice of
            its final determination. If the claim is denied in whole or part,
            such notice, which shall be written or electronic in a manner
            calculated to be understood by the Applicant, will include:

            (i)   the specific reason(s) for the denial; and

            (ii)  the specific provision(s) of the Plan on which the denial is
                  based; and

            (iii) a statement that the Applicant is entitled to receive, upon
                  request and free of charge, reasonable access to, and copies
                  of, all documents, records, and other information relevant to
                  the claim for benefits (as described above); and

            (iv)  a statement describing any voluntary appeal procedures offered
                  by the Plan and the Applicant's right to obtain further
                  information about any such procedures; and

            (v)   a statement of the Applicant's right to file a lawsuit under
                  ERISA.

            An appeal will not be considered if it is not filed within the
            applicable period of time.

            At any stage in the appeals process, the Applicant may review and
            obtain copies of documents, including the Plan document, records,
            and other information relating to the Applicant's entitlement to
            such benefit, and submit issues, comments, and records relating to
            the claim in writing.

            Benefits under this Plan will only be paid if the Plan Administrator
            decides, in its discretion, that an Applicant is entitled to them.
            No action at law or in equity shall be brought to recover benefits
            under this Plan prior to the date the Applicant has exhausted the
            administrative process of appeal available under the Plan under this
            Section 11. Furthermore, any such action must be brought within
            three years of the final date the claim could have been filed in
            order for the action to be valid.

12.   Employee Rights

      As a potential participant in the Plan, you are entitled to certain rights
      and protections under the Employee Retirement Income Security Act of 1974
      (ERISA). ERISA provides that all plan participants under ERISA plans (like
      this Plan) shall be entitled to:

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      RECEIVE INFORMATION ABOUT YOUR PLAN AND BENEFITS

      Examine, without charge, at the Plan Administrator's office and at other
      specified locations, such as worksites and union halls, all documents
      governing the Plan, including (when applicable) insurance contracts and
      collective bargaining agreements, and a copy of the latest annual report
      (Form 5500 Series) filed by the Plan with the U.S. Department of Labor and
      available at the Public Disclosure Room of the Employee Benefits Security
      Administration.

      Obtain, upon written request to the Plan Administrator, copies of
      documents governing the operation of the Plan, including (when applicable)
      insurance contracts and collective bargaining agreements, and copies of
      the latest annual report (Form 5500 Series) and updated summary plan
      description. The Plan Administrator may make a reasonable charge for the
      copies.

      Receive a summary of the Plan's annual financial report. The Plan
      Administrator is required by law to furnish each Participant with a copy
      of this summary annual report.

      PRUDENT ACTIONS BY PLAN FIDUCIARIES

      In addition to creating rights for Plan Participants, ERISA imposes duties
      upon the people who are responsible for the operation of the employee
      benefit plan. The people who operate your Plan, called "fiduciaries" of
      the Plan, have a duty to do so prudently and in the interest of you and
      other Plan Participants and beneficiaries. No one, including your
      employer, your union, or any other person, may fire you or otherwise
      discriminate against you in any way to prevent you from obtaining a Plan
      benefit or exercising your rights under ERISA.

      ENFORCE YOUR RIGHTS

      If your claim for a Plan benefit is denied or ignored, in whole or in
      part, you have a right to know why this was done, to obtain copies of
      documents relating to the decision without charge, and to appeal any
      denial, all within certain time schedules.

      Under ERISA, there are steps you can take to enforce the above rights. For
      instance, if you request a copy of Plan documents or the latest annual
      report from the Plan Administrator and do not receive them within 30 days,
      you may file suit in a Federal court. In such a case, the court may
      require the Plan Administrator to provide the materials and pay you up to
      $110 a day until you receive the materials, unless the materials were not
      sent because of reasons beyond the control of the Plan Administrator. If
      you have a claim for benefits which is denied or ignored, in whole or in
      part, you may file suit in a state or Federal court. In addition, if you
      disagree with the Plan's decision or lack thereof concerning the qualified
      status of a domestic relations order or a medical child support order, you
      may file suit in Federal court. If it should happen that Plan fiduciaries
      misuse the Plan's money, or if you are discriminated against for asserting
      your rights, you may seek assistance from the U.S. Department of Labor, or
      you may file suit in a Federal court. The court will decide who should pay
      court costs and legal fees. If you are successful, the court may order the
      person you have sued to pay these costs and

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      fees. If you lose, the court may order you to pay these costs and fees,
      for example, if it finds your claim is frivolous.

      ASSISTANCE WITH YOUR QUESTIONS

      If you have any questions about your Plan, you should contact the Plan
      Administrator. If you have any questions about this statement or about
      your rights under ERISA, or if you need assistance in obtaining documents
      from the Plan Administrator, you should contact the nearest office of the
      Employee Benefits Security Administration, U.S. Department of Labor,
      listed in your telephone directory or the Division of Technical Assistance
      and Inquiries, Employee Benefits Security Administration, U.S. Department
      of Labor, 200 Constitution Avenue N.W., Washington, D.C. 20210. You may
      also obtain certain publications about your rights and responsibilities
      under ERISA by calling the publications hotline of the Employee Benefits
      Security Administration.

13.   Arbitration of Employee Disagreements

      Any dispute, controversy, or claim (that is not settled in accordance with
      the procedures outlined in Section 11) arising out of or relating to (a)
      whether the decision of the Plan Administrator respecting the benefits
      under this Plan or interpretation of this Plan is arbitrary and capricious
      or (b) whether an Employee knowingly and voluntarily executed his or her
      Waiver and Release shall be settled by final and binding arbitration in
      accordance with the American Arbitration Association Employment Dispute
      Resolution Rules. Before resorting to arbitration, an aggrieved Employee
      must first follow the Review Procedure outlined in Section 11 of the Plan.
      If there is still a dispute after the procedures in Section 11 have been
      exhausted, the Employee must request arbitration in writing within 60 days
      after denial of a review of a claim, whether denied in writing or by
      operation of time as outlined in Section 11 of this Plan.

      The arbitrator shall be selected by mutual agreement of the parties, if
      possible. If the parties fail to reach agreement regarding appointment of
      an arbitrator within 30 days following receipt by one party of the other
      party's notice of desire to arbitrate, the arbitrator shall be selected
      from a panel or panels of persons submitted by the American Arbitration
      Association (the "AAA"). The selection process shall be that which is set
      forth in the AAA Employment Dispute Resolution Rules, except that, if the
      parties fail to select an arbitrator from one or more panels, AAA shall
      not have the power to make an appointment but shall continue to submit
      additional panels until an arbitrator has been selected.

      All fees and expenses of the arbitration, including a transcript if
      requested, will be borne by the parties equally. The complete rules of the
      AAA are available from the Plan Administrator upon request. Any action to
      enforce or vacate the arbitrator's award shall be governed by the Federal
      Arbitration Act, if applicable, and otherwise by Texas state law.

      If an Employee fails to receive, within 30 days of a request, any
      information to which he or she is legally entitled, the Employee has a
      right to file suit in a Federal court or to

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      request assistance from the U.S. Department of Labor. In any lawsuit, the
      court may require the losing party to pay all legal costs, including
      attorneys' fees.

14.   Plan Document Controls

      In the event of any inconsistency between this Plan document and any other
      communication regarding this Plan, this Plan document controls.

15.   Controlling Law

      This Plan is an employee welfare benefit plan under ERISA. This Plan and
      the Waiver and Release shall be interpreted under ERISA and the laws of
      the State of Texas, without reference to any conflicts of law principles
      thereof that would require the application of the laws of another
      jurisdiction, to the extent that state law is applicable.

16.   General Information

      Plan Sponsor: Texas Genco Holdings, Inc., 1111 Louisiana Street, Houston,
      Texas 77002

      Employer Identification Number of Plan Sponsor: 76-0695920

      Plan Number: 2060.

      Plan Year: The plan year for reporting to governmental agencies and
      employees shall be the calendar year.

      Plan Administrator: Prior to the Texas Genco Sale Date, the Benefits
      Committee, CenterPoint Energy, Inc., ATTN: Secretary, P.O. Box 61867,
      Houston, Texas 77208; (713) 207-7227. On and after the Texas Genco Sale
      Date, Texas Genco Purchaser or the committee designated by Texas Genco
      Purchaser at the address provided by Texas Genco Purchaser to the
      Participant.

      The Plan Administrator is responsible for the operation and administration
      of the Plan. The Plan Administrator is authorized to construe and
      interpret the Plan, and its decisions shall be final and binding. The Plan
      Administrator shall make all reports and disclosures required by law.

      Agent for Service of Legal Process: Prior to the Texas Genco Sale Date,
      the Benefits Committee, CenterPoint Energy, Inc., ATTN: Secretary, P.O.
      Box 61867, Houston, Texas 77208, is the agent for service of legal
      process. On and after the Texas Genco Sale Date, Texas Genco Purchaser,
      ATTN: Corporate Secretary, or such other person or entity designated by
      Texas Genco Purchaser, at the address provided by Texas Genco Purchaser to
      the Participant, is the agent for service of legal process.

      Source of Benefits: Payments due under this Plan shall be made by the
      Company or an Affiliate designated by the Company from the paying
      employer's general assets.

                                       12
<PAGE>

            IN WITNESS WHEREOF, Texas Genco Holdings, Inc. has executed these
presents as evidenced by the signature of its officer affixed hereto, in a
number of copies, all of which shall constitute but one and the same instrument,
which may be sufficiently evidenced by any executed copy hereof, this 16th day
of September, 2004, but effective as of October 1, 2004.

                                          TEXAS GENCO HOLDINGS, INC.

                                          By /s/ DAVID G. TEES
                                             -----------------------------------
                                             David G. Tees
                                             Chief Executive Officer
ATTEST:

/s/ RICHARD DAUPHIN
-----------------------------
Assistant Corporate Secretary

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<PAGE>

                                                                       EXHIBIT A

            TEXAS GENCO HOLDINGS, INC. SEVERANCE BENEFITS PLAN #2060

                               WAIVER AND RELEASE

            By notice letter to me, dated ___________________, ____ (the "Notice
Letter"), Texas Genco Holdings, Inc. offered to pay to me certain Severance
Benefits under the TEXAS GENCO HOLDINGS, INC. SEVERANCE BENEFITS PLAN #2060 (THE
"PLAN"), which I understand is incorporated herein by reference, upon my
qualifying termination of employment, in exchange for my agreement to waive all
of my claims against and release (i) Texas Genco Holdings, Inc. and its
predecessors, successors and assigns (collectively referred to as the
"Company"), (ii) all of the affiliates (including CenterPoint Energy, Inc. and
its predecessors, successors and assigns and all of its wholly or partially
owned subsidiaries and affiliates) of the Company and their predecessors,
successors and assigns (collectively referred to as the "Company Affiliates"),
and (iii) the Company's and Company Affiliates' directors and officers,
employees and agents, insurers, employee benefit plans and the fiduciaries and
agents of such plans (collectively, with the Company and Company Affiliates,
referred to as the "Corporate Group") from any and all claims, demands, actions,
liabilities and damages arising out of or relating in any way to my employment
with or separation from the Company or the Company Affiliates. I have read the
Plan and was advised in the Plan as to the class, organizational unit or group
of individuals covered by the Plan, the eligibility factors for the Plan and the
time limits applicable to the Plan. I acknowledge that I have received a list of
the job titles and the ages of all employees eligible or selected for the Plan
and a list of the ages and job titles of employees in the same job
classification or organizational unit who are not selected for the Plan. All
payments under the Plan are voluntary and are not required by any legal
obligation other than the Plan itself.

            I UNDERSTAND THAT SIGNING THIS WAIVER AND RELEASE IS AN IMPORTANT
LEGAL ACT. I ACKNOWLEDGE THAT I HAVE BEEN ADVISED IN WRITING TO CONSULT AN
ATTORNEY BEFORE SIGNING THIS WAIVER AND RELEASE (BUT NOT BEFORE MY TERMINATION
DATE). I UNDERSTAND THAT, IN ORDER TO BE ELIGIBLE FOR SEVERANCE BENEFITS UNDER
THE PLAN, I MUST SIGN AND RETURN (TO ______________________________) THIS WAIVER
AND RELEASE BY 5:30 P.M. ON ___________, ____ (OR, IF LATER, THE 50TH DAY
FOLLOWING THE DATE I RECEIVED THE NOTICE LETTER). I ACKNOWLEDGE THAT I HAVE BEEN
GIVEN AT LEAST 45 DAYS TO CONSIDER WHETHER TO EXECUTE THIS WAIVER AND RELEASE.

            In exchange for the payment to me of Severance Benefits pursuant to
the Plan, which is in addition to any remuneration or benefits to which I am
already entitled, (1) I agree not to sue in any local, state and/or federal
court or to file a grievance regarding or relating in any way to my employment
with or separation from the Company or the Company Affiliates, and (2) I
knowingly and voluntarily waive all claims and release the Corporate Group from
any and all claims, demands, actions, liabilities, and damages, whether known or
unknown, arising out of or relating in any way to my employment with or
separation from the Company or the Company Affiliates, except to the extent that
my rights are vested under the terms of employee benefit plans sponsored by the
Company or the Company Affiliates and except with respect to such rights or
claims as may arise after the date this Waiver and Release is executed. This
Waiver and Release includes, but is not limited to, claims and causes of action
under: Title VII of the

                                        1
<PAGE>

Civil Rights Act of 1964, as amended ("Title VII"); the Age Discrimination in
Employment Act of 1967, as amended, including the Older Workers Benefit
Protection Act of 1990 ("ADEA"); the Civil Rights Act of 1866, as amended; the
Civil Rights Act of 1991; the Americans with Disabilities Act of 1990 ("ADA");
the Energy Reorganization Act, as amended, 42 U.S.C. Section 5851; the Workers
Adjustment and Retraining Notification Act of 1988; the Pregnancy Discrimination
Act of 1978; the Employee Retirement Income Security Act of 1974, as amended;
the Family and Medical Leave Act of 1993; the Fair Labor Standards Act; the
Occupational Safety and Health Act; the Texas Labor Code; claims in connection
with workers' compensation or "whistle blower" statutes; and/or contract, tort,
defamation, slander, wrongful termination or any other state or federal
regulatory, statutory or common law. Further, I expressly represent that no
promise or agreement which is not expressed in the Plan or this Waiver and
Release has been made to me in executing this Waiver and Release, and that I am
relying on my own judgment in executing this Waiver and Release, and that I am
not relying on any statement or representation of any member of the Corporate
Group or any of their agents. I agree that this Waiver and Release is valid,
fair, adequate and reasonable, is with my full knowledge and consent, was not
procured through fraud, duress or mistake and has not had the effect of
misleading, misinforming or failing to inform me. I acknowledge and agree that
the Company will withhold any taxes required by federal or state law from the
Severance Benefits otherwise payable to me and that the Severance Benefits
otherwise payable to me shall be reduced by any monies owed by me to the Company
(or a Company Affiliate), including, but not limited to, any overpayments made
to me by the Company (or a Company Affiliate) and the balance of any loan by the
Company (or a Company Affiliate) to me that is outstanding at the time that the
Severance Benefits are paid.

            I acknowledge that payment of Severance Benefits pursuant to the
Plan is not an admission by any member of the Corporate Group that they engaged
in any wrongful or unlawful act or that any member of the Corporate Group
violated any federal or state law or regulation. I understand that nothing in
this Waiver and Release is intended to prohibit, restrict or otherwise
discourage any individual from engaging in activity protected under 42 U.S.C.
Section 5851, 10 C.F.R. Section 50.7 or the Sarbanes-Oxley Act of 2002,
including, but not limited to, providing information to the Nuclear Regulatory
Commission ("NRC") or to any member of the Corporate Group regarding nuclear
safety or quality concerns, potential violations or other matters within the
NRC's jurisdiction. I acknowledge that no member of the Corporate Group has
promised me continued employment or represented to me that I will be rehired in
the future. I acknowledge that my employer and I contemplate an unequivocal,
complete and final dissolution of my employment relationship. I acknowledge that
this Waiver and Release does not create any right on my part to be rehired by
any member of the Corporate Group and I hereby waive any right to future
employment by any member of the Corporate Group.

            I have returned or I agree that I will return immediately, and
maintain in strictest confidence and will not use in any way, any confidential
and proprietary business information or other nonpublic information or documents
relating to the business and affairs of the Corporate Group. For the purposes of
this Waiver and Release, "confidential and proprietary business information"
shall mean any information concerning any member of the Corporate Group or their
business which I learn or

                                        2
<PAGE>

develop during my employment and which is not generally known or available
outside of the Corporate Group. Such information, without limitation, includes
information, written or otherwise, regarding any member of the Corporate Group's
earnings, expenses, material sources, equipment sources, customers and
prospective customers, business plans, strategies, practices and procedures,
prospective and executed contracts and other business arrangements. I
acknowledge and agree that all records, papers, reports, computer programs,
strategies, documents (including, without limitation, memoranda, notes, files
and correspondence), opinions, evaluations, inventions, ideas, technical data,
products, services, processes, procedures, and interpretations that are or have
been produced by me or any employee, officer, director, agent, contractor, or
representative of any member of the Corporate Group, whether provided in written
or printed form, or orally, all comprise confidential and proprietary business
information. I agree that for a period of one year following my termination with
the Corporate Group that I will not: (a) solicit, encourage or take any action
that is intended, directly or indirectly, to induce any other employee of the
Corporate Group to terminate employment with the Corporate Group; (b) interfere
in any manner with the contractual or employment relationship between the
Corporate Group and any other employee of the Corporate Group; and (c) use any
confidential information to directly, or indirectly, solicit any customer of the
Corporate Group. I understand and agree that in the event of any breach of the
provisions of this paragraph, or threatened breach, by me, any member of the
Corporate Group may, in their discretion, discontinue any or all payments
provided for in the Plan and recover any and all payments already made and any
member of the Corporate Group shall be entitled to apply to a court of competent
jurisdiction for such relief by way of specific performance, restraining order,
injunction or otherwise as may be appropriate to ensure compliance with these
provisions. Should I be contacted or served with legal process seeking to compel
me to disclose any such information, I agree to notify the General Counsel of
the Company immediately, in order that the Corporate Group may seek to resist
such process if they so choose. If I am called upon to serve as a witness or
consultant in or with respect to any potential litigation, litigation,
arbitration, or regulatory proceeding, I agree to cooperate with the Corporate
Group to the full extent permitted by law, and the Corporate Group agrees that
any such call shall be with reasonable notice, shall not unnecessarily interfere
with my later employment, and shall provide for payment for my time and costs
expended in such matters.

            Should any of the provisions set forth in this Waiver and Release be
determined to be invalid by a court, agency or other tribunal of competent
jurisdiction, it is agreed that such determination shall not affect the
enforceability of other provisions of this Waiver and Release. I acknowledge
that this Waiver and Release and the Plan set forth the entire understanding and
agreement between me and the Company or any other member of the Corporate Group
concerning the subject matter of this Waiver and Release and supersede any prior
or contemporaneous oral and/or written agreements or representations, if any,
between me and the Company or any other member of the Corporate Group. I
understand that for a period of 7 calendar days following the date I sign this
Waiver and Release, I may revoke my acceptance of the offer by delivering a
written statement to ______________________ (or the person designated by
________________) by hand or by registered-mail, in which case the Waiver and
Release will not become effective. In the event I revoke my acceptance of this
offer, I shall not be entitled to any Severance Benefits under the Plan. I
understand that failure to

                                        3
<PAGE>

revoke my acceptance of the offer within 7 calendar days following the date I
sign this Waiver and Release will result in this Waiver and Release being
permanent and irrevocable.

            I acknowledge that I have read this Waiver and Release, have had an
opportunity to ask questions and have it explained to me and that I understand
that this Waiver and Release will have the effect of knowingly and voluntarily
waiving any action I might pursue, including breach of contract, personal
injury, retaliation, discrimination on the basis of race, age, sex, national
origin, religion, veterans status, or disability and any other claims arising
prior to the date of this Waiver and Release. By execution of this document, I
do not waive or release or otherwise relinquish any legal rights I may have
which are attributable to or arise out of acts, omissions, or events of any
member of the Corporate Group which occur after the date of the execution of
this Waiver and Release.

_________________________                     _________________________________
Employee's Printed Name                       Corporate Group's Representative

_________________________                     _________________________________
Employee's Signature                          Corporate Group's Execution Date

_________________________                     _________________________________
Employee's Signature Date                     Employee's Social Security Number

                                        4