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                                                                    EXHIBIT 10.5



Dear

     ENSERCH Corporation (the "Company") considers the establishment and
maintenance of a sound and vital management to be essential to protecting and
enhancing the best interest of the Company and its shareholders.  In this
connection, the Company recognizes that, as is the case with many publicly held
corporations, the possibility of a change in control may exist and that such
possibility, and the uncertainty and questions which it may raise among
management, may result in the departure or distraction of management personnel
to the detriment of the Company and its shareholders.  Accordingly, the
Company's Board of Directors (the "Board") has determined that appropriate steps
should be taken to reinforce and encourage the continued attention and
dedication of members of the Company's, its division's and subsidiaries'
management including yourself, to their assigned duties without distraction in
the face of the potentially disturbing circum stances arising from the
possibility of a change in control of the Company.

     In order to induce you to remain in the employ of the Company, this
Agreement sets forth certain benefits which the Company agrees will be provided
to you in the event there is a termination of your employment with the Company
that is associated with (as described in Section 3 hereof) a "change in control
of the Company" (as defined in Section 2 hereof) under the circumstances
described below.

     1.  TERM.  This Agreement shall have an initial term expiring on the
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earlier of (a) the third anniversary of the date hereof, assuming there has been
no change in control of the Company, or (b) your Normal Retirement Date as
defined herein; provided, however, that upon each anniversary date of this
Agreement the term of this Agreement under clause (a) (as the same may be
extended by this proviso) shall be automatically extended annually for an
additional period of one (1) year on a continuing basis unless either party
shall give written notice of intention not to so extend at least six (6) months
prior to such anniversary date.  No notice by the Company of its intention not
to extend shall be effective if, within one year prior to the original
expiration date, or if this Agreement is in a renewal period, within one year
prior to the termination date proposed by the Company, the Company has received
notice, official or unofficial, or otherwise has reason to believe that a Person
(as defined herein) has taken or is considering steps that would when completed
bring about a change in control of the Company.  This Agreement shall in any
case continue in effect for three (3) years following a change in control of the
Company.

     2.  CHANGE IN CONTROL.  For purposes of this Agreement, a "change in
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control of the Company" or a "change in control" shall mean a change in control
of a nature that
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would be required to be reported in response to Item l(a) of the Current Report
on Form 8-K, as in effect on the date hereof, pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934, as amended ("Exchange Act") or would have
been required to be so reported but for the fact that such event had been
"previously reported" as that term is defined in Rule 12b-2 of Regulation 12B of
the Exchange Act; provided that, without limitation such a change in control
shall be deemed to have occurred if (a) any Person is or becomes the beneficial
owner (as defined in Rule 13d-3 under the Exchange Act), directly or indirectly,
of securities of the Company representing 20% or more of the combined voting
power of the Company's then outstanding securities ordinarily (apart from rights
accruing under special circumstances) having the right to vote at elections of
directors ("Voting Securities"), or (b) individuals who constitute the Board on
the date hereof (the "Incumbent Board") cease for any reason to constitute at
least two-thirds thereof, provided that any person becoming a director
subsequent to the date hereof whose election, or nomination for election by the
Company's shareholders, was approved by a vote of at least three-quarters of the
directors comprising the Incumbent Board (either by a specific vote or by
approval of the proxy statement of the Company in which such person is named as
a nominee for director, without objection to such nomination) shall be, for
purposes of this clause (b), considered as though such person were a member of
the Incumbent Board, or (c) a recapitalization of the Company occurs which
results in either a decrease by 33% or more in the aggregate percentage
ownership of Voting Securities held by Independent Shareholders (on a primary
basis or on a fully diluted basis after giving effect to the exercise of stock
options and warrants) or an increase in the aggregate percentage ownership of
Voting Securities held by non-Independent Shareholders (on a primary basis or on
a fully diluted basis after giving effect to the exercise of stock options and
warrants) to greater than 50%, or (d) the shareholders of the Company have
approved an agreement to merge or consolidate with or into another corporation
or an agreement to sell or otherwise dispose of all or substantially all of the
Company's assets (including a plan of liquidation).  For purposes of this
Agreement, the term "Person" shall mean and include any individual, corporation,
partnership, group, association or other "person," as such term is used in
Section 14(d) of the Exchange Act, other than the Company, a subsidiary of the
Company or any employee benefit plan(s) sponsored or maintained by the Company
or any subsidiary thereof, and the term "Independent Shareholder" shall mean any
shareholder of the Company except any employee(s) or direc tor(s) of the Company
or any employee benefit plan(s) sponsored or maintained by the Company or any
subsidiary thereof.

     3.  TERMINATION ASSOCIATED WITH A CHANGE IN CONTROL. If and only if any of
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the events described in Section 2 hereof constituting a change in control of the
Company shall occur, you shall be entitled to the benefits provided in Section 4
hereof upon the termination of your employment as provided in this Section 3
within six (6) months prior to such change in control, or within six (6) months
prior to the date that the Board of Directors of the Company authorizes a
merger, consolidation or other transaction or event that if consummated would
constitute a change in control and such action is consummated (collectively
herein referenced to as "termination preceding a change in control"), or within
three (3) years after such change in control, unless such termination is (a)
because of your death, or Retirement on or after your Normal Retirement Date
(that is, early retirement

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initiated by the Company shall be treated as a dismissal and not a voluntary
early retirement), (b) by the Company for Cause or Disability or (c) by you
other than for Good Reason (including voluntary early retirement when there is
no concurrent Good Reason).  (In the case of termination preceding a change in
control, references in the definition of "Good Reason" to conditions in effect
immediately prior to a change in control shall be deemed to mean conditions in
effect immediately prior to your termination.)  References to actions by and
employment with the Company shall include actions by and employment with the
divisions and subsidiaries of the Company where the context so requires.

          (i)  Disability; Retirement.
               ---------------------- 

               (A) If, as a result of your incapacity due to physical or mental
          illness, you shall have been unable for more than six (6) months to
          perform your duties with the Company on a full time basis, and within
          thirty (30) days after written notice of termination is given you
          shall not have returned to the full time performance of your duties,
          the Company may terminate your employ ment for "Disability."

               (B) Termination of your employment based on "Retirement" shall
          mean retirement in accordance with the terms of the Company's
          Retirement and Death Benefit Program of 1969 (the "Retirement Plan")
          as in effect on January 1, 1996, including early retirement, or in
          accordance with any retirement arrangement established with your
          consent with respect to you. "Normal Retirement Date" as used herein
          shall have the meaning provided in the Retirement Plan or any
          successor or substitute plan or plans of the Company put into effect
          prior to a change in control of the Company.

          (ii) Cause. Termination of your employment by the Company for "Cause"
     shall mean termination upon (A) the willful and continued failure by you
     substan tially to perform your duties with the Company (other than any such
     failure resulting from your incapacity due to physical or mental illness),
     after a demand for substantial performance is delivered to you by the
     Chairman or President of the Company which specifically identifies the
     manner in which such executive believes that you have not substantially
     performed your duties, and a reasonable period of opportunity for such
     substantial performance is provided, or (B) the willful engaging by you in
     illegal misconduct materially and demonstrably injurious to the Company.
     For purposes of this paragraph, no act, or failure to act, on your part
     shall be considered "willful" unless done, or omitted to be done, by you
     not in good faith and without reasonable belief that your action or
     omission was in the best interest of the Company. Any act, or failure to
     act, based upon authority given pursuant to a resolution duly adopted by
     the Board or based upon the advice of counsel for the Company shall be
     conclusively presumed to be done, or omitted to be done, by you in good
     faith and in the best interest of the Company. Notwithstanding the
     foregoing, you shall not be deemed to have been terminated for Cause unless
     and until there shall have been delivered to you a copy of a resolution
     duly adopted by the affirmative vote of not less than

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     three-quarters of the entire membership of the Board at a meeting of the
     Board called and held for that purpose (after reasonable notice to you and
     an opportunity for you, together with your counsel, to be heard before the
     Board), finding that in the good faith opinion of the Board you were guilty
     of conduct set forth above in clauses (A) or (B) in this paragraph and
     specifying the particulars thereof in detail.

          (iii) Good Reason. "Good Reason" for you to terminate your employment
                -----------
     shall mean:

          (A) an adverse change in your status or position(s) as an executive of
     the Company as in effect immediately prior to the change in control,
     including, without limitation, any adverse change in your status or
     position as a result of a material diminution in your duties or
     responsibilities (other than, if applicable, any such change directly
     attributable to the fact that less than 50% of the Company's voting
     securities are publicly owned or the fact that your position becomes a
     position with a subsidiary or division), or a material change in your
     business location or the assignment to you of any duties or
     responsibilities which are inconsistent with such status or position(s), or
     a substantial increase in your business travel, or any removal of you from
     or any failure to reappoint or reelect you to such position(s) (except in
     connection with the termination of your employment for Cause, Disability or
     Retirement or as a result of your death or by you other than for Good
     Reason);

          (B) a reduction by the Company in your base salary as in effect
     immediately prior to the change in control or in the number of vacation
     days to which you are then entitled under the Company's normal vacation
     policy as in effect immediately prior to the change in control;

          (C) the taking of any action by the Company (including the elimination
     of a plan without providing substitutes therefor or the reduction of your
     awards thereunder) that would diminish or the failure by the Company to
     take any action which would maintain the aggregate projected value of your
     awards under the Company's bonus, stock option or management incentive unit
     plans in which you were participating at the time of a change in control of
     the Company;

          (D) the taking of any action by the Company that would diminish or the
     failure by the Company to take any action which would maintain the
     aggregate value of the benefits provided you under the Company's medical,
     health, dental, accident, disability, life insurance, stock purchase or
     retirement plans in which you were participating at the time of a change in
     control of the Company;

          (E) the taking of any action by the Company that would diminish or the
     failure of the Company to take any action that would maintain
     indemnification or insurance for officers' liability; or

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          (F) a failure by the Company to obtain from any Successor (as
     hereinafter defined) the assent to this Agreement contemplated by Section 7
     hereof; or

          (G) any purported termination by the Company of your employment that
     is not effected pursuant to a Notice of Termination satisfying the
     requirements of paragraph (iv) below (and, if applicable, paragraph (ii)
     above); for purposes of this Agreement, no such purported termination shall
     be effective.

          (iv) Notice of Termination. Any termination by the Company pursuant to
               ---------------------
     paragraphs (i) or (ii) above or by you pursuant to paragraph (iii) above
     shall be communicated by written Notice of Termination to the other party
     hereto. In the event of termination preceding a change in control, written
     Notice of Termination to the other party hereto shall be communicated
     within thirty (30) days following a change in control in order to reflect
     termination by the Company pursuant to paragraphs (i) or (ii) above or by
     you pursuant to paragraph (iii) above. For purposes of this Agreement, a
     "Notice of Termination" shall mean a notice specifying the termination
     provision in this Agreement relied upon and setting forth in reasonable
     detail the facts and circumstances claimed to provide a basis for
     termination of your employment under the provision so specified.

          (v) Date of Termination.  "Date of Termination" shall mean (A) if your
              -------------------                                               
     employment is terminated for Disability, thirty (30) days after Notice of
     Termination is given (provided that you shall not have returned to the
     performance of your duties on a full-time basis during such thirty (30) day
     period), (B) if you terminate your employment pursuant to paragraph (iii)
     above, the date specified in the Notice of Termination, (C) in the case of
     a termination preceding a change in control, the date of discharge if
     termination is by the Company or the date notice of intention to leave is
     given by the executive in the case of termination for Good Reason, and (D)
     if your employment is terminated for any other reason except death or
     Retirement, the date on which Notice of Termination is given.

     4.  COMPENSATION UPON CHANGE IN CONTROL, TERMINATION OR DURING DISABILITY.
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          (i)   Compensation During Disability. During any period that you fail
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     to perform your duties hereunder as a result of incapacity due to physical
     or mental illness, you shall continue to receive your full base salary at
     the rate then in effect, and any time of service for vesting purposes under
     any plan shall continue to accrue during such period of incapacity until
     and if your employment is terminated pursuant to Section 3(i) hereof (and
     for any longer period as may be provided under applicable plans).

          (ii)  Compensation Upon Termination for Cause.  If your employment is
           ---------------------------------------                        
     terminated for Cause, the Company shall pay you your full base salary and
     accrued vacation pay through the Date of Termination at the rate in effect
     at the time Notice

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     of Termination is given plus any benefits or awards (including both the
     cash and stock components) which pursuant to the terms of any plans have
     been earned or become payable, but which have not yet been paid to you, and
     shall have no further obligations to you under this Agreement.

          (iii) Compensation Upon Termination Other than For Disability or Cause
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     or Good Reason. Subject to Section 9 hereof, if the Company terminates your
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     employment other than for Disability or Cause pursuant to Section 3(i) or
     (ii) hereof or if you terminate your employment for Good Reason (which
     termination may be effected by Retirement prior to your Normal Retirement
     Date), then the Company shall pay to you (without regard to the provisions
     of any benefit plan) in a lump sum on or before the tenth business day
     following the Date of Termination ("Payment Date") an amount equal to the
     sum of the following paragraphs (A) through (D), reduced by any of such
     amounts already paid and the value of any severance amounts agreed to
     between you and the Company and paid at the time of severance from the
     Company in the case of a termination preceding a change in control:

               (A) Your full base salary through the Date of Termination at the
          rate in effect just prior to the time Notice of Termination is given,
          plus any earned vacation time, plus any benefits or awards (including
          both the cash and stock components) which pursuant to the terms of any
          plans have been earned or become payable, but which have not yet been
          paid to you; plus

               (B) An amount equal to the greater of your largest target bonus
          during either of the two years preceding the year in which the change
          in control occurs or your target bonus for the year in which the Date
          of Termination occurs, prorated for the current year; plus

               (C) An amount equal to two times your "Annual Compensation", as
          defined below, provided however, that such amount shall in no event
          exceed the Annual Compensation you would have otherwise received had
          your employment continued at such rate until your Normal Retirement
          Date ("Annual Compensation" shall mean the greater of your annual base
          salary on the Date of Termination or your highest annual base salary
          in effect during either of the two years immediately prior to the
          change in control plus an amount equal to the greater of your target
          bonus for the year in which the Date of Termination occurs or your
          highest target bonus during either of the two years immediately prior
          to the change in control); plus

               (D) If you choose to receive cash for some or all unexercised
          stock options in lieu of exercising such options, which choice shall
          be communi cated by you in writing to the Company, an amount equal to
          the market value of the Company's common stock on the Date of
          Termination or on any other date within 180 days preceding the Date of
          Termination, on whichever date the value is highest, multiplied by the
          number of options granted to you prior

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          to the Date of Termination (you should seek legal advice before
          choosing to receive cash for options held less than six (6) months)
          under any stock option plan of the Company or other arrangement
          pursuant to which options to purchase common stock of the Company have
          been issued and which have not been exercised through the Payment
          Date, less the aggregate value of the option price of such options.

          (iv)   Discharge of Company's Obligation. The payment to you of
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     appropriate amounts under paragraph (D) shall be considered for all
     purposes a discharge of all obligations pursuant to such plan except as to
     options not cashed out.

          (v)    Base Salary; Severance Pay. For purposes of this Agreement, the
                 --------------------------
     term "base salary" shall include any amounts deducted pursuant to Sections
     125 and 401K of the Internal Revenue Code of 1986, as amended (the "Code"),
     and any amounts deducted under the ENSERCH Corporation Deferred
     Compensation Plan. Amounts paid pursuant to this paragraph shall be deemed
     severance pay and in lieu of any further salary for periods subsequent to
     the Date of Termination.

          (vi)   Gross-Up Provision. In the event that you become entitled to
                 ------------------
     the payments provided by Sections 4(iii) or 5 hereof (the "Agreement
     Payments"), if any of the Agreement Payments will be subject to the tax
     (the "Excise Tax") imposed by Section 4999 of the Code (or any similar tax
     that may hereafter be imposed), the Company shall pay to you at the time
     specified in Subsection (vii) below an additional amount (the "Gross-up
     Payment") such that the net amount retained by you, after deduction of any
     Excise Tax on the Total Payments (as hereinafter defined) and any federal,
     state and local income tax and Excise Tax upon the Gross-up Payment
     provided for by this subsection (vi), but before deduction for any federal,
     state or local income tax on the Agreement Payments, shall be equal to the
     "Total Payments," as defined below.

          For purposes of determining whether any of the Agreement Payments will
     be subject to the Excise Tax and the amount of such Excise Tax, (a) any
     other payments or benefits received or to be received by you in connection
     with a change in control of the Company or your termination of employment
     (whether pursuant to the terms of this Agreement or any other plan,
     arrangement or agreement with the Company, any person whose actions result
     in a change of control of the Company or any person affiliated with the
     Company or such person) (which, together with the Agreement Payments, shall
     constitute the "Total Payments") shall be treated as "parachute payments"
     within the meaning of Section 280G(b)(2) of the Code, and all "excess
     parachute payments" within the meaning of Section 280G(b)(l) of the Code
     shall be treated as subject to the Excise Tax, unless in the opinion of tax
     counsel selected by the Company's independent auditors such other payments
     or benefits (in whole or in part) do not constitute parachute payments, or
     such excess parachute payments (in whole or in part) represent reasonable
     compensation for services actually rendered within the meaning of Section
     280G(b)(4) of the Code in excess of the base amount

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     within the meaning of Section 280G(b)(3) of the Code or are otherwise not
     subject to the Excise Tax, (b) the amount of the Total Payments which shall
     be treated as subject to the Excise Tax shall be equal to the lesser of (1)
     the total amount of the Total Payments or (2) the amount of excess
     parachute payments within the meaning of Section 280G(b)(l) of the Code
     (after applying clause (a), above), and (c) the value of any non-cash
     benefits or any deferred payment or benefit shall be determined by the
     Company's independent auditors in accordance with the principles of
     Sections 280(G)(d)(3) and (4) of the Code.

          For purposes of determining the amount of the Gross-up Payment, you
     shall be deemed to pay federal income taxes at the highest marginal rate of
     federal income taxation for the calendar year in which the Gross-up Payment
     is to be made and the applicable state and local income taxes at the
     highest marginal rate of taxation for the calendar year in which the Gross-
     up Payment is to be made, net of the maximum reduction in federal income
     taxes which could be obtained from deduction of such state and local taxes.
     In the event that the Excise Tax is subsequently determined to be less than
     the amount taken into account hereunder at the time the Gross-up Payment is
     made, you shall repay to the Company at the time that the amount of such
     reduction in Excise Tax is finally determined the portion of the Gross-up
     Payment attributable to such reduction (plus the portion of the Gross-up
     Payment attributable to the Excise Tax and federal and state and local
     income tax imposed on the portion of the Gross-up Payment being repaid by
     you if such repayment results in a reduction in Excise Tax and/or a federal
     and state and local income tax deduction), plus interest on the amount of
     such repayment at the rate provided in Section 1274(b)(2)(B) of the Code.
     In the event that the Excise Tax is determined to exceed the amount taken
     into account hereunder at the time the Gross-up Payment is made (including
     by reason of any payment the existence or amount of which cannot be
     determined at the time of the Gross-up Payment), the Company shall make an
     additional gross-up payment in respect of such excess (plus any interest
     payable with respect to such excess) at the time that the amount of such
     excess is finally determined.

          (vii) Time of Gross-Up Payment; Estimated Payments; Loan Provision.
                ------------------------------------------------------------
     The Gross-up Payment or portion thereof provided for in Subsection (vi)
     above shall be paid not later than the thirtieth day following payment of
     any amounts under Sections 4(iii) or 5; provided, however, that if the
     amount of such Gross-up Payment or portion thereof cannot be finally
     determined on or before such day, the Company shall pay to you on such day
     an estimate, as determined in good faith by the Company, of the minimum
     amount of such payments and shall pay the remainder of such payments
     (together with interest at the rate provided in Section 1274(b)(2)(B) of
     the Code) as soon as the amount thereof can be determined, but in no event
     later than the forty-fifth day after payment of any amounts under Sections
     4(iii) or 5. In the event that the amount of the estimated payments exceeds
     the amount subse quently determined to have been due, such excess shall
     constitute a loan by the Company to you, payable on the fifth day after
     demand by the Company (together with interest at the rate provided in
     Section 1274(b)(2)(B) of the Code).

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          (viii) Continuation of Certain Benefits. If the Company terminates
                 --------------------------------
     your employment other than for Disability or Cause pursuant to Section 3(i)
     or 3(ii) hereof or if you terminate your employment for Good Reason (either
     of which termination may be effected by Retirement prior to your Normal
     Retirement Date), the Company shall assign to you any club membership held
     for your benefit and the Company shall maintain in full force and effect
     for your continued benefit for a period terminating on the earliest of (A)
     three years after the Date of Termination or (B) your Normal Retirement
     Date, all life, health, accident and disability insurance plans and
     programs in which you were a participant immediately prior to the Date of
     Termination, provided that your continued participation is possible under
     the terms and provisions of such plans and programs. In the event that your
     participation in any such plan or program is barred, the Company shall
     provide you with benefits substantially similar to those to which you would
     be entitled as a participant in such plans and programs. Any required
     statutory period of COBRA health benefit continuation that terminated
     employees may elect shall not begin until the end of the period of coverage
     provided hereby. The benefits provided under this Section, other than
     assignment of any club membership, shall be reduced to the extent of
     benefits received by you from another employer. At the end of the period of
     coverage, you shall have the option to have assigned to you, at no cost and
     with no apportionment of prepaid premiums, any assignable insurance policy
     owned by the Company and relating specifically to you.

          (ix)   Lump Sum Payment for Additional Two Years of Service. If you
                 ----------------------------------------------------
     are not a participant in the Retirement Income Restoration Plan of ENSERCH
     Corporation ("RIRP") (the RIRP has provisions comparable to this
     subparagraph (ix)) when your employment with the Company is terminated
     within the first three years after a change in control, by the Company
     without Cause or by you for Good Reason, you shall receive from the
     Company, at the time you first receive any payment under or with respect to
     the Retirement Plan, an amount (calculated and paid in the form of a lump
     sum) equal to the difference between (i) the "Lump Sum", as defined below,
     value of any payment you receive at such time (or any monthly annuities
     that you then become entitled to receive) from (a) the Retirement Plan and
     (b) from the Company with respect to the portion, if any, of your
     Retirement Plan pension which exceed the limitations on pension amounts to
     which the Retirement Plan is subject and (ii) the Lump Sum value of
     payments that would have been payable if it or they had been calculated as
     if you had been deemed to have had two (2) additional "Years of Service",
     as defined below. "Years of Service" shall be as defined in the Retirement
     Plan and shall be applied as if you were a participant thereunder at the
     time of your termination of employment, and "Lump Sum" shall mean an amount
     calculated in accordance with the interest rate and other actuarial
     assumptions set forth or used in connection with lump sum calculations
     under the Retirement Plan.

          (x)    Lump Sum Payment if Not Vested under Retirement Plan. If you
                 ----------------------------------------------------
     are not vested under the Retirement Plan when your employment with the
     Company is terminated within the first three years after a change in
     control by the Company without Cause or by you for Good Reason, you shall
     receive from the Company at

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<PAGE>
 
     the time payments are made pursuant to paragraph (iii) above, an amount
     (calculated and paid in a lump sum) equal to the Lump Sum value of any
     payment you would have been entitled to receive at your Normal Retirement
     Date (or any annuities that you would have been entitled to receive) from
     the Retirement Plan and the RIRP calculated (a) as if you were 100% vested
     under such plans and (b) using actual years of service increased by two (2)
     additional Years of Service.

          (xi)   Mitigation. You shall not be required to mitigate the amount of
                 ----------
     any payment provided for in this Section 4 by seeking other employment or
     otherwise, nor (except as provided in Section 4(viii)) shall the amount of
     any payment or benefit provided for in this Section 4 be reduced by any
     compensation earned or benefit received by you as the result of employment
     by another employer after the Date of Termination, or otherwise.

          (xii)  Deferred Payment Election. Upon entering into this Agreement 
                 -------------------------
     and for a period of 14 days following each anniversary of the date hereof
     (the "Election Period"), you may, in writing, direct the Company that any
     amounts which should become payable to you pursuant to Section 4(iii)
     hereof shall be paid to you in three (3) equal annual installments, with
     the first such installment payable within five (5) business days of the
     Date of Termination and each successive installment paid on the anniversary
     of the Date of Termination or the next following business day if such date
     is not a business day (the "Deferred Payment Election"). A Deferred Payment
     Election, once made, cannot be revoked except during an Election Period;
     provided, however, that no Deferred Payment Election can be made or revoked
     by you during an Election Period that occurs after a change in control of
     the Company or at a time when, in the judgment of the Company, a change in
     control may occur within sixty (60) days of such Election Period.
     Notwithstanding anything in the foregoing to the contrary, a Deferred
     Payment Election shall be automatically revoked should you terminate your
     employment under the circumstances described in Section 7 below.

     5.  TERMINATION IN CONNECTION WITH THE DISPOSITION OF A COMPANY BUSINESS.
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If there occurs at any time during the Term of this Agreement a spin-off to
shareholders or a sale or other disposition to a non-affiliate of the Company
(collectively, "New Owner", which term shall include all entities controlled by
or under common control with the New Owner) of a portion of the business of the
Company ("Disposition") for which you perform substantially all of your duties
or as part of a restructuring or reorganizing of the Company you are assigned to
work with such New Owner and you become employed by the New Owner, then a change
in control, for the limited purpose of this Section 5, will be deemed to have
occurred, and

          (i)   if, and only if, your employment is terminated as described in
     any of the paragraphs (A) through (D) below (in each case a termination
     shall not be deemed to be a termination for purposes of this Section 5 if
     you are offered and refuse to accept a comparable position with the Company
     or an affiliate of the Company or the New Owner and for this purpose a
     position is not comparable if there are changes

                                      -10-
<PAGE>
 
     from the position you held prior to the Disposition that would constitute
     Good Reason for you to terminate your employment):

               (A)  You are terminated by the Company on the date of the Disposi
          tion and are not employed by the New Owner; or

               (B) Within six (6) months prior to the date of Disposition, your
          employment with the Company is terminated other than for Cause or
          Disability or you terminate your employment with the Company for Good
          Reason; or

               (C) You continue your employment with the Company and within
          three years following the Date of the Disposition your employment with
          the Company is terminated other than for Cause or Disability or you
          terminate your employment for Good Reason; or

               (D) You are employed by the New Owner and within three years
          following the date of Disposition your employment with the New Owner
          is terminated other than for Cause or Disability or you terminate your
          employment with the New Owner for Good Reason. (For purposes of this
          subsection, "Company" shall be deemed to mean "New Owner" in the
          definition of "Good Reason" where the context so requires and
          references in the definition of "Good Reason" to conditions in effect
          immediately prior to a change in control shall be deemed to mean
          conditions in the offer of employment to you or otherwise in effect
          upon your initial employment with the New Owner.)

          (ii)  then, subject to Section 9 hereof, you shall be entitled to the
     benefits described in either (A) or (B) below:

               (A)  If any of paragraphs (A) (B) or (C) of subsection (i) above
          apply, then you shall be entitled to the payments and benefits
          specified in Section 4.

               (B)  If paragraph (D) of subsection (i) above applies, then the
          Company shall pay to you an amount equal to two times the higher of
          your annual base salary in effect on the date of Disposition or your
          highest annual base salary in effect during either of the two years
          immediately prior to the date of Disposition; plus an amount equal to
          two times the greater of your target bonus for the year in which the
          Disposition occurred or your highest target bonus during either of the
          two years immediately prior to the Disposition; provided however, that
          such amount shall in no event exceed the aggregate amount of base
          salary and target bonuses that you would have otherwise received had
          your employment continued at such higher rate until your Normal
          Retirement Date; plus the Gross-up payments and other provisions of
          Sections 4(vi) and 4(vii).

                                      -11-
<PAGE>
 
     6.  EMPLOYEE'S COMMITMENT:  RIGHT TO TERMINATE.
         ------------------------------------------ 

          (i) Employee's Right to Terminate.  Except as otherwise provided in
              -----------------------------                                  
     paragraph (ii) below, the Company or you may terminate your employment at
     any time, subject to the Company's providing the benefits specified herein
     in accordance with the terms hereof.

          (ii)  Employee's Commitment In Event of Tender or Exchange Offer. In
                ----------------------------------------------------------
     the event a tender offer or exchange offer is made by a Person for more
     than 20% of the combined voting power of the Company's Voting Securities,
     including shares of Common Stock of the Company, you agree that you will
     not leave the employ of the Company (other than as a result of Disability
     or upon Normal Retirement) and will render the services contemplated in
     this Agreement until such tender offer or exchange offer has been abandoned
     or terminated or a change in control of the Company has occurred.

          (iii)  Employee's Duty.  During the life of this Agreement, you will
                 ---------------                                              
     faithfully perform your duties to the best of your ability and in
     accordance with the directions of the Chief Executive Officer and the Board
     of Directors, provided that after a change in control of the Company such
     directions do not constitute Good Reason for you to terminate your
     employment; and you will devote to the performance of such duties your full
     working time, attention and energies.

          (iv)  Confidential and Proprietary Information. You will not at any
                ----------------------------------------
     time during the life of this Agreement, or thereafter, communicate or
     disclose to any unauthorized person, or use for your own account, without
     the written consent of the Company, any proprietary processes, or other
     confidential information of the Company or any subsidiary concerning their
     business or affairs, suppliers or customers, it being understood, however,
     that the obligations of this paragraph shall not apply to the extent that
     the aforesaid matters (A) are disclosed in circumstances in which you are
     legally required to do so or (B) become generally known to and available
     for use by the public otherwise than by your wrongful act or omission.

     7.   SUCCESSOR'S BINDING AGREEMENT.
          ----------------------------- 

          (i)  Successor's Binding Agreement.  The Company will seek, by written
               -----------------------------                                    
     request at least five (5) business days prior to the time a Person becomes
     a Successor (as hereinafter defined), to have such Person, by agreement in
     form and substance satisfactory to you, assent to the fulfillment of the
     Company's obligations under this Agreement. Failure of such Person to
     furnish such assent by the later of (A) three business days prior to the
     time such Person becomes a Successor or (B) two business days after such
     person receives a written request to so assent shall constitute Good Reason
     for termination by you of your employment if a change in control of the
     Company occurs or has occurred. For purposes of this Agreement, "Successor"
     shall mean any Person that succeeds to, or has the practical ability to
     control (either

                                      -12-
<PAGE>
 
     immediately or with the passage of time), the Company's business directly,
     by merger or consolidation, or indirectly, by purchase of the Company's
     Voting Securities or otherwise. Whether or not such assent is given by a
     Successor, this Agreement shall be binding on the Successor and its
     assigns.

          (ii)  Enforceability by Employee's Successors. This Agreement shall
     inure to the benefit of and be enforceable by your personal or legal
     representatives, executors, administrators, successors, heirs,
     distributees, devisees and legatees. If you should die before all amounts
     that would still be payable to you hereunder if you had continued to live
     are paid, all such unpaid amounts, unless otherwise provided herein, shall
     be paid in accordance with the terms of this Agreement to your devisee,
     legatee, or other designee or, if there be no such designee, to your
     estate.

     8.   FEES AND EXPENSES.  The Company shall pay all legal fees, expenses of
          -----------------                                                    
arbitration and related expenses incurred by you in connection with this
Agreement following a change in control of the Company, including, without
limitation, (a) all such fees and expenses, if any, incurred in contesting or
disputing any termination of your employment following a change in control or
incurred by you in seeking advice with respect to the matters set forth in
Section 7 hereof or (b) your seeking to obtain or enforce any right or benefit
provided by this Agreement.

     9.   TAXES.  All payments to be made to you under this Agreement will be
          -----                                                              
subject to required withholding of applicable federal, state and local taxes.

     10.  INTEREST.  All payments due under this Agreement and unpaid shall bear
          --------                                                              
interest at the rate of 10% per annum, compounded daily, beginning on the next
ensuing day after the Payment Date or such other date as they may be due.

     11.  NON-ALIENABILITY.  Your interest under this Agreement is not subject
          ----------------                                                    
to anticipation, alienation, assignment or attachment and may not be transferred
or encumbered in any manner, either voluntarily or involuntarily, and any
attempt so to anticipate, alienate, sell, transfer, assign, pledge, encumber, or
charge the same shall be null and void; neither shall the benefits hereunder be
liable for or subject to your debts, contracts, liabilities, engagement, or
torts, nor shall they be subject to garnishment, attachment, or other legal or
equitable process nor shall they be an asset in bankruptcy, except that not
amount shall be payable hereunder until and unless any and all amounts
representing debts or other obligations owed to any company by you shall have
been fully paid and satisfied.

     12.  SURVIVAL.  The respective obligations of, and benefits afforded to,
          --------                                                           
the Company and you as provided in Sections 4, 5, 6, 7, 8, 9 and 16 of this
Agreement shall survive termination of this Agreement.

     13.  NOTICE.  Notices and all other communications provided for herein
          ------                                                           
shall be in writing and shall be deemed to have been duly given when delivered
or mailed by certified or registered mail, return receipt requested, postage
prepaid addressed to the respective

                                      -13-
<PAGE>
 
addresses set forth on the first page of this Agreement or to such other address
as either party may have furnished to the other in writing in accordance
herewith, except that notices of change of address shall be effective only upon
receipt.  All notices to the Company shall be directed to the attention of the
Chief Executive Officer of the Company with a copy to the Secretary of the
Company.

     14.  MISCELLANEOUS.  This Agreement does not supersede any other plan of
          -------------                                                      
the Company or agreement with the Company.  No provision of this Agreement may
be modified, waived or discharged except in writing specifically referring to
such provision and signed by you and such officer as may be specifically
designated by the Board of Directors of the Company.  No waiver at any time by
either party hereto of the breach of any condition or provision of this
Agreement, or of compliance by the other party with the same, shall be deemed a
waiver of any other condition or provision at the same or at any other time.  No
agreement or representation still in effect, oral or otherwise, express or
implied, with respect to the subject matter hereof has been made by either party
other than (i) those set forth expressly in this Agreement or (ii) those in any
stock option agreements, restricted stock agreements, or deferred compensation
agreements.  The validity, interpretation, construction and performance of this
Agreement shall be governed by the laws of the State of Texas.

     15.  VALIDITY.  The invalidity or unenforceability of any provisions of
          --------                                                          
this Agreement shall not affect the validity or enforceability of any other
provision of this Agreement, which shall remain in full force and effect.

     16.  ARBITRATION.  Any dispute or controversy arising under or in
          -----------                                                 
connection with this Agreement shall be settled exclusively by arbitration in
the city nearest to your principal residence which has an office of the American
Arbitration Association by one arbitrator in accordance with the rules of the
American Arbitration Association then in effect. Judgment may be entered on the
arbitrator's award in any court having jurisdiction; provided, however, that you
shall be entitled to seek specific performance of your right to be paid until
the Date of Termination during the pendency of any dispute or controversy
arising under or in connection with this Agreement.  The Company shall bear all
costs and expenses arising in connection with any arbitration proceeding
pursuant to this Section 16.

     17.  COUNTERPARTS.  This Agreement may be executed in one or more
          ------------                                                
counterparts, each of which shall be deemed to be an original but all of which
together will constitute one and the same instrument.

                                      -14-
<PAGE>
 
     If this letter correctly sets forth our entire agreement on the subject
matter hereof, kindly sign and return to the Company the enclosed copy of this
letter which will then constitute our agreement on this subject.

                                        Sincerely,

                                        ENSERCH Corporation


                                        By:
                                           ----------------------------
                                            D. W. Biegler

AGREED to as of the date
first above written.

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

                                      -15-