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                                                            Exhibit 10 (e)


                                       TXU

                      Long-Term Incentive Compensation Plan



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

May 10, 2002


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                                       TXU

                      LONG-TERM INCENTIVE COMPENSATION PLAN

Section 1.        Purpose

         The TXU Long-Term Incentive Compensation Plan (the "Plan") was
established effective May 23, 1997 and is renamed and restated effective May 10,
2002. The primary purpose of the Plan is to promote the interests of the Company
and its shareholders through the (i) attraction and retention of executive
officers and other key employees essential to the success of the Company; (ii)
motivation of executive officers and other key employees using
performance-related incentives linked to long-range performance goals and the
interests of Company shareholders; and (iii) enabling of such employees to share
in the long-term growth and success of the Company. The Plan permits the grant
of Incentive Stock Options (intended to qualify under Section 422 of the Code),
Nonqualified Stock Options, Stock Appreciation Rights, Restricted Stock,
Restricted Stock Units, Performance Shares, Performance Units, Bonus Stock, and
any other Stock Unit Awards or stock-based forms of awards as the Committee, in
its sole and complete discretion, may determine to be appropriate in carrying
out the intent and purposes of this Plan.

Section 2. Definitions

   When used in this Plan, the following terms shall have the meanings set
forth below:

2.1  "Affiliate" shall have the meaning ascribed to such term in Rule 12b-2
         under the Exchange Act.

2.2  "Agreement" means a written agreement between the Company and a Participant
     implementing the grant, and setting forth the particular terms, conditions
     and restrictions of each Award. With respect to the grant of an Option, the
     Agreement may be referred to herein as an "Option Agreement," and with
     respect to any other Award hereunder, the Agreement may be referred to
     herein as an "Award Agreement."

2.3  "Award" means a grant under the Plan of Nonqualified Stock Options,
     Incentive Stock Options, Stock Appreciation Rights, Restricted Stock,
     Restricted Stock Units, Performance Units, Performance Shares, Bonus Stock,
     or other Stock Unit Awards.

2.4  "Award Date" or "Grant Date" means the date on which an Award is made by
     the Committee under the Plan.

2.5  "Beneficial Owner" shall have the meaning ascribed to such term in Rule
     13d-3 under the Exchange Act.

2.6  "Board" or "Board of Directors" means the Board of Directors of the
     Company.


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2.7  "Bonus Stock" means an Award granted pursuant to Section 10 of the Plan.

2.8  "Cashless Exercise" means the exercise of an Option by the Participant
     through the use of a brokerage firm to make payment to the Company of the
     exercise price either from the proceeds of a loan to the Participant from
     the brokerage firm or from the proceeds of the sale of Stock issued
     pursuant to the exercise of the Option, and upon receipt of such payment,
     the Company delivers the exercised Shares to the brokerage firm.

2.9  "Cause", for purposes of applying the provisions of Section 13 hereof
     relating to a Change in Control of the Company, shall mean:

   (a)      Participant's breach of his fiduciary duty to the
            Company and/or its shareholders as applicable;

   (b)      any action or failure to act on the part of
            Participant which results in material injury to the
            assets, business prospects or reputation of the
            Company or any affiliate of the Company;

   (c)      the appropriation by Participant of a material
            business opportunity of the Company or any affiliate
            of the Company, including Participant's attempting to
            secure or securing any personal profit in connection
            with any transaction entered into on behalf of the
            Company; or

   (d)      Participant's breach of the Company's Code of Conduct
            or a material express employment policy of the
            Company."

2.10 "Change in Control" means a change in control of the Company of a nature
     that would be required to be reported in response to Item 1(a) of the
     Securities and Exchange Commission 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 under the Exchange
     Act; provided that, without limitation, such a change in control shall be
     deemed to have occurred if: (i) any Person is or becomes the beneficial
     owner (as defined in Rule 13-d3 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 (ii)
     individuals who constitute the Board of Directors on the date hereof (the
     "Incumbent Board") cease for any reason to constitute at least a majority
     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


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     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(ii), considered as though such person were a member of the
     Incumbent Board; or (iii) 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 primarybasis or on a fully diluted basis after giving
     effect to the exercise ofstock options and warrants) to greater than 50%;
     or (iv)all orsubstantially all of the assets of the Company are liquidated
     or transferred to an unrelated party; or (v) the Company is a party to a
     merger, consolidation, reorganization or other business combination
     transaction pursuant to which the Company is not the surviving ultimate
     parent entity; or (vi) the Company is a party to a merger, consolidation,
     reorganization or other business combination transaction which requires the
     approval of the shareholders of the Company and which results in an
     increase of 20% or more in the number of Voting Securities outstanding. For
     purposes of this definition, 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 director(s) of the Company or any employee
     benefit plan(s) sponsored or maintained by the Company or any subsidiary
     thereof.

2.11 "Code" means the Internal Revenue Code of 1986 and the rules and
     regulations promulgated thereunder, or any successor law, as amended from
     time to time.

2.12 "Committee" means the Organization and Compensation Committee of the Board.

2.13 "Common Stock" or "Stock" means the Common Stock of the Company, without
     par value, or such other security or right or instrument into which such
     Common Stock may be changed or converted in the future.

2.14 "Company" means TXU Corp., including all Affiliates and wholly-owned
     subsidiaries, or any successor thereto.

2.15 "Covered Participant" means a Participant who is a "covered employee" as
     defined in Code Section 162(m)(3) and the regulations promulgated
     thereunder.

2.16 "Designated Beneficiary" means the beneficiary designated by the
     Participant, pursuant to procedures established by the Committee, to
     receive amounts due to the Participant in the event of the Participant's
     death. If the Participant does not make an effective designation, then the
     Designated Beneficiary will be deemed to be the Participant's estate.

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2.17 "Disability" means (i) the mental or physical disability of the Participant
     defined as "Disability" under the terms of the TXU Long-Term Disability
     Income Plan, as amended from time to time in accordance with the provisions
     of such plan; or (ii) a determination by the Committee, in its sole
     discretion, of total disability (based on medical evidence) that precludes
     the Participant from engaging in any occupation or employment for wage or
     profit for at least six (6) months and appears to be permanent. All
     decisions by the Committee relating to a Participant's Disability
     (including a decision that a Participant is not disabled), shall be final
     and binding on all parties.

2.18 "Divestiture" means the sale of, or closing by, the Company of the business
     operations in which the Participant is employed.

2.19 "Early Retirement" means Earlier-than-Normal Retirement of a Participant
     under, and subject to, the provisions of the Retirement Plan.

2.20 "Exchange Act" means the Securities Exchange Act of 1934 and the rules and
     regulations promulgated thereunder, or any successor law as amended from
     time to time.

2.21 "Executive Officer" means any employee considered by the Company to be an
     Executive Officer.

2.22 "Fair Market Value" means, on any given date, the closing price of Stock as
     reported on the New York Stock Exchange composite tape on such day or, if
     no Shares were traded on the New York Stock Exchange on such day, then on
     the next preceding day that Stock was traded on such exchange, all as
     reported by The Wall Street Journal or such other source as the Committee
     may select.

2.23 "Full-time Employee" means an individual who is employed by the Company or
     a Subsidiary in a customary employer-employee relationship, is on the
     payroll of the Company or such Subsidiary, receives compensation directly
     from the Company or such Subsidiary, and is designated in the internal
     payroll or other records of the Company or a Subsidiary as a regular,
     full-time employee. This designation excludes all leased employees (within
     the meaning of Code Section 414(n)), part-time employees, temporary
     employees, or contract employees, as well as all consultants to, the
     Company.

2.24 "Incentive Stock Option" or "ISO" means an option to purchase Stock,
     granted under Section 6 herein, which is designated as an incentive stock
     option and is intended to meet the requirements of Code Section 422.

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2.25 "Key Employee" means a Full-time Employee who is an officer or other key
     employee of the Company or its Subsidiaries as designated or determined by
     the Committee.

2.26 "Nonqualified Stock Option" or "NQSO" means an option to purchase Stock,
     granted under Article 6 herein, which is not intended to qualify as, or
     constitute an Incentive Stock Option.

2.27 "Normal Retirement" means Normal Retirement of a Participant under, and
     subject to, the provisions of the Retirement Plan.

2.28 "Option" means an Incentive Stock Option or a Nonqualified Stock Option.

2.29 "Other Stock Unit Award" means awards of Stock or other Awards that are
     valued in whole or in part by reference to, or are otherwise based on, the
     value of the Company's Common Stock.

2.30 "Participant" means a Key Employee who has been granted an Award under the
     Plan.

2.31 "Performance Criteria" means the objectives established by the Committee
     for a Performance Period, for the purpose of determining when an Award
     subject to such objectives has been earned.

2.32 "Performance Award" means a performance-based Award made under Section 9
     herein, which may be in the form of either Performance Shares or
     Performance Units.

2.33 "Performance Period" means the time period designated by the Committee
     during which performance goals must be met in order for a Participant to
     obtain a performance-based Award.

2.34 "Performance Share" means an Award, designated as a Performance Share,
     granted to a Participant pursuant to Section 9 herein, the value of which
     is determined, in whole or in part, by the value of Company Stock in a
     manner deemed appropriate by the Committee and described in the applicable
     Agreement.

2.35 "Performance Unit" means an Award, designated as a Performance Unit,
     granted to a Participant pursuant to Section 9 herein, the value of which
     is determined, in whole or in part, by the attainment of pre-established
     Performance Criteria as deemed appropriate by the Committee and described
     in the Agreement.

2.36 "Period of Restriction" means the period during which the transfer of
     Shares of Restricted Stock is restricted, pursuant to Section 8 herein.


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2.37 "Person" shall have the meaning ascribed to such term in Section 3(a)(9) of
     the Exchange Act and used in Sections 13(d) and 14(d) thereof, including a
     "group" as defined in Section 13(d).

2.38 "Plan" means the TXU Long-Term Incentive Compensation Plan as herein
     established and as hereafter amended from time to time.

2.39 "Restricted Stock" means an Award of Stock granted to a Participant
     pursuant to Section 8 herein.

2.40 "Restricted Stock Unit" means a fixed or variable dollar denominated right
     to acquire Stock, which may or may not be subject to restrictions,
     contingently awarded under Section 8 of the Plan.

2.41 "Retirement Plan" means the TXU Retirement Plan, as it may be amended from
     time to time.

2.42 "Rule 16b-3" means Rule 16b-3 under Section 16(b) of the Exchange Act as
     adopted in Exchange Act Release No. 34-37260 (May 30, 1996), or any
     successor rule as amended from time to time.

2.43 "Section 162(m)" means Section 162(m) of the Code, or any successor section
     under the Code, as amended from time to time and as interpreted by final or
     proposed regulations promulgated thereunder from time to time.

2.44 "Securities Act" means the Securities Act of 1933 and the rules and
     regulations promulgated thereunder, or any successor law, as amended from
     time to time.

2.45 "Stock" or "Shares" means the Common Stock of the Company.

2.46 "Stock Appreciation Right" means the right to receive an amount equal to
     the excess of the Fair Market Value of a share of Stock (as determined on
     the date of exercise) over the Exercise Price of a related Option or the
     Fair Market Value of the Stock on the Grant Date of the Stock Appreciation
     Right.

2.47 "Stock Unit Award" means an award of Common Stock or units granted under
     Section 11.

2.48 "Subsidiary" means a corporation in which the Company owns, either directly
     or through one or more of its Subsidiaries, at least 50% of the total
     combined voting power of all classes of stock.

Section 3.        Administration

3.1  The Committee. The Plan shall be administered and interpreted by the
     -------------
     Committee which shall have full authority, discretion and power necessary
     or desirable for such administration and interpretation.

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    The express grant in this Plan of any specific power to the Committee
    shall not be construed as limiting any power or authority of the Committee.
    In its sole and complete discretion the Committee may adopt, alter, suspend
    and repeal any such administrative rules, regulations, guidelines, and
    practices governing the operation of the Plan as it shall from time to time
    deem advisable. In addition to any other powers and, subject to the
    provisions of the Plan, the Committee shall have the following specific
    powers: (i) to determine the terms and conditions upon which Awards may be
    made and exercised; (ii) to determine the Participants to which Awards
    shall be made; (iii) to determine all terms and provisions of each
    Agreement, which need not be identical for types of Awards nor for the same
    type of Award to different Participants; (iv) to construe and interpret all
    terms, conditions and provisions of the Plan and all Agreements; (v) to
    establish, amend, or waive rules or regulations for the Plan's
    administration; (vi) to accelerate the exercisability of any Award, the
    length of a Performance Period or the termination of any Period of
    Restriction; and (vii) to make all other determinations and take all other
    actions necessary or advisable for the administration or interpretation of
    the Plan. The Committee may seek the assistance or advice of any persons it
    deems necessary to the proper administration of the Plan.

3.2 Committee Decisions. Unless strictly and expressly prohibited by law, all
    -------------------
    determinations and decisions made by the Committee pursuant to the
    provisions of this Plan shall be final, conclusive, and binding upon all
    persons, including Participants, Designated Beneficiaries, the Company, its
    shareholders and employees.

3.3 Rule 16b-3 and Section 162(m) Requirements. Notwithstanding any other
    ------------------------------------------
    provision of the Plan, the Committee may impose such conditions on any
    Award as it may deem to be advisable or required to satisfy the
    requirements of Rule 16b-3 or Section 162(m).

Section 4.        Eligibility

         The Committee shall have sole and complete discretion in determining
those Key Employees who shall participate in the Plan. The Committee may request
recommendations for individual awards from the Company's Chief Executive Officer
and may delegate to the Chief Executive Officer the authority to make Awards to
Participants who are not Executive Officers of the Company.

Section 5.        Shares Subject to the Plan

  5.1    Number of Shares. Subject to adjustment as provided for in Section
         ----------------
5.4 below, the maximum aggregate number of Shares that may be issued pursuant to
Awards made under the Plan shall not exceed 10,000,000 Shares, which may be in
any combination of Options, Restricted Stock, Restricted Stock Units,
Performance Shares, Bonus Shares, or Other Stock Unit Award. Shares of Common
Stock may be available from the authorized but unissued Shares, Shares issued
and reacquired by the Company or Shares purchased in the open market for
purposes of the Plan. Except as provided in Sections 5.2 and 5.3 herein, the
issuance of Shares in connection with the exercise of, or as other payment for,
Awards under the Plan shall reduce the number of Shares available for future
Awards under the Plan.

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      5.2    Lapsed Awards or Forfeited Shares. In the event that: (i) any
             ---------------------------------
Option or other Award granted under the Plan terminates, expires, or lapses for
any reason without having been exercised in accordance with its terms; (ii)
Shares issued pursuant to the Awards are canceled or forfeited for any reason;
or (iii) Awards are paid in cash, the Shares subject to such Award shall
thereafter be again available for grant of an Award under the Plan.

      5.3    Delivery of Shares as Payment. In the event a Participant pays for
             -----------------------------
any Option or other Award granted under the Plan through the delivery of
previously acquired shares of Common Stock, the number of shares of Common Stock
available for Awards under the Plan shall be increased by the number of shares
surrendered by the Participant.

      5.4    Capital Adjustments. The number and class of Shares subject to each
             -------------------
outstanding Award, the Option Price and the aggregate number, type and class of
Shares for which Awards thereafter may be made shall be subject to adjustment,
if any, as the Committee deems appropriate, based on the occurrence of a number
of specified and non-specified events. Such specified events are discussed in
this Section 5.4, but such discussion is not intended to provide an exhaustive
list of such events which may necessitate adjustments.

(a)  If the outstanding Shares are increased, decreased or exchanged through
     merger, consolidation, sale of all or substantially all of the property of
     the Company, reorganization, recapitalization, reclassification, stock
     dividend, stock split, reverse stock split or other distribution in respect
     to such Shares, for a different number or type of Shares, or if additional
     Shares or new or different Shares are distributed with respect to such
     Shares, an appropriate and proportionate adjustment shall be made in: (i)
     the maximum number of shares of Stock available for the Plan as provided in
     Section 5.1 herein; (ii) the type of shares or other securities available
     for the Plan; (iii) the number of shares of Stock subject to any then
     outstanding Awards under the Plan; and (iv) the price (including Exercise
     Price) for each share of Stock (or other kind of shares or securities)
     subject to then outstanding Awards, but without change in the aggregate
     purchase price as to which such Options remain exercisable or Restricted
     Stock releasable.

(b)  In the event other events not specified above in this Section 5.4, such as
     any extraordinary cash dividend, split-up, reverse split, spin-off,
     combination, exchange of shares, warrants or rights offering to purchase
     Common Stock, or other similar corporate event, affect the Common Stock
     such that an adjustment is necessary to maintain the benefits or potential
     benefits intended to be provided under this Plan, then the Committee in its
     discretion may make adjustments to any or all of: (i) the number and type
     of shares which thereafter may be optioned and sold or awarded or made
     subject to Stock Appreciation Rights under the Plan; (ii) the grant,
     exercise or conversion price of any Award made under the Plan thereafter;
     and (iii) the number and price (including Exercise Price) of each share of
     Stock (or other kind of shares or securities) subject to the then
     outstanding Awards.

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(c)  Any adjustment made by the Committee pursuant to the provisions of this
     Section 5.4 shall be final, binding and conclusive. A notice of such
     adjustment, including identification of the event causing such adjustment,
     the calculation method of such adjustment, and the change in price and the
     number of shares of Stock, or securities, cash or property purchasable
     subject to each Award shall be sent to each Participant. No fractional
     interests shall be issued under the Plan based on such adjustments.


Section 6.        Stock Options

      6.1   Grant of Stock Options. Subject to the terms and provisions of the
            ----------------------
Plan and applicable law, the Committee, at any time and from time to time, may
grant Options to Key Employees as it shall determine. The Committee shall have
sole and complete discretion in determining the type of Option granted, the
Option Price (as hereinafter defined), the duration of the Option, the number of
Shares to which an Option pertains, any conditions imposed upon the
exercisability or the transferability of the Options, including vesting
conditions, the conditions under which the Option may be terminated, and any
such other provisions as may be warranted to comply with the law or rules of any
securities trading system or stock exchange. Each Option grant shall have such
specified terms and conditions detailed in an Option Agreement. The Option
Agreement shall specify whether the Option is intended to be an Incentive Stock
Option or a Nonqualified Stock Option.

      6.2   Option Price. The exercise price per share of Stock covered by an
            ------------
Option ("Option Price") shall be determined on the Grant Date by the Committee;
provided that the Option Price shall not be less than 100% of the Fair Market
Value of the Common Stock on the Grant Date.

     6.3   Exercisability. Options granted under the Plan shall be exercisable
           --------------
at such times and be subject to such restrictions and conditions as the
Committee shall determine, which will be specified in the Option Agreement and
need not be the same for each Participant. However, no Option granted under the
Plan may be exercisable until the expiration of at least six months after the
Grant Date (except that such limitations shall not apply in the case of death or
Disability of the Participant, or a Change in Control), nor after the expiration
of ten years from the Grant Date.

    6.4    Method of Exercise. Options shall be exercised by the delivery of a
           ------------------
written notice from the Participant to the Company in a form prescribed by the
Committee setting forth the number of Shares with respect to which the Option is
to be exercised, accompanied by full payment or provision for full payment for
the Shares. The Option Price shall be payable to the Company in full in cash, or
its equivalent, or by delivery of Shares of Stock (not subject to any security
interest or pledge) having a Fair Market Value at the time of exercise equal to
the exercise price of the Shares, or by a combination of the foregoing. In
addition, at the request of the Participant, and subject to applicable laws and
regulations, the Company may (but shall not be required to) cooperate in a
Cashless Exercise of the Option. As soon as practicable, after receipt of
written notice and full payment of the Option Price, the Company shall deliver
to the Participant a stock certificate, issued in the Participant's name,
evidencing the number of Shares with respect to which the Option was exercised.

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Section 7.        Stock Appreciation Rights

   7.1    Grant of Stock Appreciation Rights. Subject to the terms and
          ----------------------------------
provisions of the Plan and applicable law, the Committee, at any time and from
time to time, may grant freestanding Stock Appreciation Rights, Stock
Appreciation Rights in tandem with an Option, or Stock Appreciation Rights in
addition to an Option. Stock Appreciation Rights granted in tandem with an
Option or in addition to an Option may be granted at the time of the Option or
at a later time. No Stock Appreciation Rights granted under the Plan may be
exercisable until the expiration of at least six months after the Grant Date
(except that such limitations shall not apply in the case of death or Disability
of the Participant, or a Change in Control), nor after the expiration of ten
years from the Grant Date.

   7.2      Price. The exercise price of each Stock Appreciation Right shall be
            -----
determined at the time of grant by the Committee, subject to the limitation that
the grant price shall not be less than 100% of Fair Market Value of the Common
Stock on the Grant Date.

   7.3      Exercise. Stock Appreciation Rights shall be exercised by the
            --------
delivery of a written notice from the Participant to the Company in a form
prescribed by the Committee. Upon such exercise, the Participant shall be
entitled to receive an amount equal to the excess of the Fair Market Value of a
Share over the grant price thereof on the date of exercise of the Stock
Appreciation Right multiplied by the number of Shares for which the Stock
Appreciation Right was granted.

    7.4    Payment. Payment upon exercise of the Stock Appreciation Right
           -------
shall be in the amount of the full exercise price therefor, and shall be made in
the form of cash, cash installments, Shares of Common Stock, or a combination
thereof, as determined in the sole and complete discretion of the Committee.
However, if any payment in the form of Shares results in a fractional share,
such payment for the fractional share shall be made in cash.

Section 8.        Restricted Stock and Restricted Stock Units

    8.1   Grant of Restricted Stock. Subject to the terms and provisions of
          -------------------------
the Plan and applicable law, the Committee, at any time and from time to time,
may grant shares of Restricted Stock and Restricted Stock Units under the Plan
to such Participants, and in such amounts and for such duration and/or
consideration as it shall determine.

   8.2   Restricted Stock Award Agreement. Each Restricted Stock and
         --------------------------------
Restricted Stock Unit granted hereunder shall be evidenced by an Award Agreement
that shall specify the Period of Restriction, the conditions which must be
satisfied prior to removal of the restriction, the number of Shares of
Restricted Stock or Restricted Stock Units granted, payment terms for each such
Award (e.g. whether the Award will be paid in shares of Stock, cash or a

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combination thereof, and whether payment will be in a lump sum or installments),
and such other provisions as the Committee shall determine. The Committee may
specify, but is not limited to, the following types of restrictions in the Award
Agreement: (i) restrictions on acceleration or achievement of terms or vesting
based on any Performance Criteria, including, but not limited to, absolute or
relative increases in total shareholder return, revenues, sales, net income, or
net worth of the Company, any of its Subsidiaries, divisions, business units or
other areas of the Company; and (ii) any other restrictions which the Committee
may deem advisable, including requirements established pursuant to the
Securities Act, the Exchange Act, the Code and any securities trading system or
stock exchange upon which such Shares under the Plan are listed.

     8.3  Nontransferability. Except as provided in this Section 8, the
          ------------------
Shares of Restricted Stock or Restricted Stock Units granted under the Plan may
not be sold, transferred, pledged, assigned, or otherwise alienated or
hypothecated until the termination of the applicable Period of Restriction or
upon earlier satisfaction of other conditions as specified by the Committee in
its sole discretion and set forth in the applicable Award Agreement. All rights
with respect to the Restricted Stock and Restricted Stock Units granted to a
Participant under the Plan shall be exercisable during his or her lifetime only
by such Participant or his or her guardian or legal representative.

     8.4  Removal of Restrictions. Except as otherwise noted in this Section
          -----------------------
8, Restricted Stock and Restricted Stock Units covered by each Award made under
the Plan shall become freely transferable by the Participant after the last day
of the Period of Restriction and/or upon the satisfaction of other conditions as
determined by the Committee.

    8.5    Voting Rights. During the Period of Restriction, Participants in
           --------------
whose name Restricted Stock is granted under the Plan may exercise full voting
rights with respect to those shares.

   8.6     Dividends and Other Distributions. During the Period of
           ---------------------------------
Restriction, Participants in whose name Restricted Stock is granted under the
Plan shall be entitled to receive all dividends and other distributions paid
with respect to those Shares. If any such dividends or distributions are paid in
Shares, the Shares shall be subject to the same restrictions on transferability
and forfeitability as the Restricted Stock with respect to which they were
distributed.

Section 9.        Performance Awards

      9.1  Grant of Performance Awards. Subject to the terms and provisions of
           ---------------------------
the Plan and applicable law, the Committee, at any time and from time to time,
may issue Performance Awards in the form of either Performance Units or
Performance Shares to Participants subject to the Performance Criteria,
Performance Period and other consideration or restrictions as it shall
determine. The Committee shall have complete discretion in determining the
number and value of Performance Units or Performance Shares granted to each
Participant.



                                       11
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      9.2   Value of Performance Awards. The Committee shall determine the
            ---------------------------
number and value of Performance Units or Performance Shares granted to each
Participant as a Performance Award. The Committee shall set Performance Criteria
in its discretion for each Participant who is granted a Performance Award. The
extent to which such Performance Criteria are met will determine the value of
the Performance Unit or Performance Share to the Participant. Such Performance
Criteria may be particular to a Participant, may relate to the performance of
the Company or Subsidiary which employs him or her, may be based on the division
or business unit which employs him or her, may be based on the performance of
the Company and its Subsidiaries generally, or any combination of the foregoing.
The Performance Criteria may be based on achievement of balance sheet or income
statement objectives, or any other objectives established by the Committee. The
Performance Criteria may be absolute in their terms or measured against, or in
relationship to, other companies comparably, similarly or otherwise situated.
The terms and conditions of each Performance Award will be set forth in an Award
Agreement.

         9.3 Settlement of Performance Awards. After a Performance Period has
             --------------------------------
ended, the holder of a Performance Unit or Performance Share shall be entitled
to receive the value thereof based on the degree to which the Performance
Criteria established by the Committee and set forth in the Award Agreement have
been satisfied.

         9.4 Form of Payment. Payment of the amount to which a Participant shall
             --------------
be entitled upon the settlement of the Performance Award shall be made in cash,
Stock, or a combination thereof and may be made in a lump sum or installments
all as determined by the Committee and set forth in the related Award Agreement.

Section 10.       Bonus Stock

         Subject to the terms and provisions of the Plan and applicable law, the
Committee may, at any time and from time to time, award shares of Bonus Stock to
participants under the Plan without cash consideration. The Committee shall
determine and indicate in the related Award Agreement whether such shares of
Bonus Stock shall be unencumbered of any restrictions (other than those which
the Committee deems necessary or advisable to comply with law) or shall be
subject to restrictions and limitations similar to those referred to in Section
9. In the event the Committee assigns any restrictions on the shares of Bonus
Stock, then such shares shall be subject to at least the following restrictions:

   (a)      No Shares of Bonus Stock may be sold, transferred, pledged,
            assigned or otherwise alienated or hypothecated if such Shares
            are subject to restrictions which have not lapsed or been
            satisfied.

   (b)      If any condition of vesting of the shares of Bonus Stock are
            not met, all such Shares subject to such vesting shall be
            delivered to the Company (in a manner determined by the
            Committee) within 60 days of the failure to meet such
            conditions without any payment from the Company.

                                       12
<PAGE>


Section 11.       Other Stock Based Awards

         11.1 Grant of Other Stock Based Awards. Subject to the terms and
              ---------------------------------
provisions of the Plan and applicable law, the Committee may, at any time and
from time to time, issue to Participants, either alone or in addition to other
Awards made under the Plan, Stock Unit Awards which may be in the form of Common
Stock or other securities. The value of each such Award shall be based, in whole
or in part, on the value of the underlying Common Stock on the Grant Date. The
Committee, in its sole and complete discretion, may determine that an Award,
either in the form of a Stock Unit Award under this Section 11 or as an Award
granted pursuant to Sections 6 through 10, may provide to the Participant (i)
dividends or dividend equivalents (payable on a current or deferred basis) and
(ii) cash payments in lieu of or in addition to an Award. Subject to the
provisions of the Plan, the Committee, in its sole and complete discretion,
shall determine the terms, restrictions, conditions, vesting requirements, and
payment rules of the Award. The Award Agreement shall specify the rules of each
Award as determined by the Committee. However, each Stock Unit Award need not be
subject to identical rules.

    11.2 Rules. The Committee, in its sole and complete discretion, may grant a
         -----
Stock Unit Award subject to the following rules:

(a)  Common Stock or other securities issued pursuant to Stock Unit Awards may
     not be sold, transferred, pledged, assigned or otherwise alienated or
     hypothecated by a Participant until the expiration of at least six months
     from the Grant Date, except that such limitation shall not apply in the
     case of death or Disability of the Participant or a Change in Control. To
     the extent Stock Unit Awards are deemed to be derivative securities within
     the meaning of Rule 16b-3, the rights of a Participant who is subject to
     Section 16 of the Exchange Act with respect to such Awards shall not vest
     or be exercisable until the expiration of at least six months from the
     Award Date. All rights with respect to such Stock Unit Awards granted to a
     Participant under the Plan shall be exercisable during his or her lifetime
     only by such Participant or his or her guardian or legal representative.

(b)  Stock Unit Awards may require the payment of cash consideration by the
     Participant in receipt of the Award or provide that the Award, and any
     Common Stock or other securities issued in conjunction with the Award, be
     delivered without the payment of cash consideration.

(c)  The Committee, in its sole and complete discretion, may establish certain
     Performance Criteria that may relate in whole or in part to receipt of
     Stock Unit Awards.

(d)  Stock Unit Awards may be subject to a deferred payment schedule and/or
     vesting over a specified period.

                                       13
<PAGE>


(e)  The Committee, in its sole and complete discretion, as a result of certain
     circumstances, may waive or otherwise remove, in whole or in part, any
     restriction or condition imposed on a Stock Unit Award.

Section 12.       Special Provisions Applicable to Covered Participants

         Awards to Covered Participants shall be governed by the conditions of
this Section 12 in addition to the requirements of Sections 6 through 11 above.
Should conditions set forth under this Section 12 conflict with the requirements
of Sections 6 through 11, the conditions of this Section 12 shall prevail.

         (a)      All Performance Criteria relating to Covered Participants for
                  a relevant Performance Period shall be established by the
                  Committee in writing prior to the beginning of the Performance
                  Period, or by such other later date for the Performance Period
                  as may be permitted under Section 162(m) of the Code.
                  Performance Criteria may include alternative and multiple
                  Performance Criteria and will be based on one or more of the
                  following business criteria: business or financial goals of
                  the Company, including absolute or relative levels of total
                  shareholder return, revenues, sales, net income, or net worth
                  of the Company, any of its Subsidiaries, divisions, business
                  units, or other areas of the Company.

         (b)      The Performance Criteria must be objective and must satisfy
                  third party "objectivity" standards under Code Section 162(m),
                  and the regulations promulgated thereunder.

         (c)      The Performance Criteria shall not allow for any discretion by
                  the Committee as to an increase in any Award, but discretion
                  to lower an Award is permissible.

         (d)      The Award and payment of any Award under this Plan to a
                  Covered Participant with respect to a relevant Performance
                  Period shall be contingent upon the attainment of the
                  Performance Criteria that are applicable to such Award. The
                  Committee shall certify in writing prior to payment of any
                  such Award that such applicable Performance Criteria have been
                  satisfied. Resolutions adopted by the Committee may be used
                  for this purpose.

         (e)      The aggregate maximum Awards that may be paid (in cash or in
                  shares of Stock or a combination thereof) to any Covered
                  Participant under the Plan pursuant to Sections 8, 9, 10 and
                  11 during any calendar year shall be an amount equivalent to
                  the fair market value of 100,000 shares of Stock, such fair
                  market value to be determined as of the first day of such
                  calendar year.

         (f)      The aggregate maximum number of shares of Stock subject to
                  Options and SARs made to any Covered Participant during any
                  calendar year shall be 100,000.

                                       14
<PAGE>


         (g)      All Awards to Covered Participants under this Plan shall be
                  further subject to such other conditions, restrictions, and
                  requirements as the Committee may determine to be necessary to
                  carry out the purposes of this Section 12.

Section 13.       Change In Control

         Notwithstanding any other provision of this Plan or of any Agreement
entered into in connection with an Award granted hereunder, in the event of a
Change in Control: (a) all outstanding Options or Stock Appreciation Rights
shall immediately become fully vested and exercisable; and (b) the forfeiture
provisions otherwise applicable to all other outstanding Awards, whether
provided for in this Plan or in any Agreement shall no longer apply to such
Awards, except (and only) with respect to any existing forfeiture provisions
applicable in the event of the termination of a Participant's employment for
Cause or the voluntary resignation of employment by a Participant. For purposes
of applying the foregoing provision, a voluntary resignation shall not be deemed
to have occurred in the event of circumstances which could reasonably constitute
or give rise to a constructive discharge. The provisions of this Section 13
shall take precedence over, and shall apply notwithstanding, any contrary or
seemingly conflicting provision (or absence of a provision) elsewhere in this
Plan or in any Agreement. Upon the occurrence of a Change in Control, each
outstanding Agreement shall automatically, and without any action on the part of
any party, be deemed to incorporate the provisions of this Section 13, and, for
purposes of Section 14.9 of this Plan, each Participant shall be deemed to have
consented to modifications of his respective Agreement(s) to effect the
incorporation of the provisions of this Section 13, except to the extent that a
Participant objects in writing to such modification.

Section 14.       General Provisions

         14.1 Plan Term. The Plan was adopted by the Board on February 21, 1997,
              ---------
and became effective upon receiving shareholder approval on May 23, 1997. The
Plan was renamed and restated effective May 12, 2000, August 17, 2001 and May
10, 2002.

         The Plan shall terminate December 31, 2006; however, all Awards made
prior to, and which are outstanding on such date, shall remain valid in
accordance with their terms and conditions.

         14.2 Withholding. The Company shall have the right to deduct or
              -----------
withhold, or require a Participant to remit to the Company, any taxes required
by law to be withheld from Awards made under this Plan. In the event an Award is
paid in the form of Common Stock, the Committee may require the Participant to
remit to the Company the amount of any taxes required to be withheld from such
payment in Common Stock, or, in lieu thereof, the Company may withhold (or the
Participant may be provided the opportunity to elect to tender) the number of
shares of Common Stock equal in Fair Market Value to the amount required to be
withheld.

                                       15
<PAGE>


         14.3 Awards. Each Award granted under the Plan shall be evidenced in a
              ------
corresponding Award Agreement or Option Agreement provided in writing to the
Participant, which shall specify the terms, conditions and any rules applicable
to the Award.

         14.4 Nontransferability. Except with respect to Nonqualified Stock
              -----------------
Options, no Award granted under the Plan may be sold, transferred, pledged,
assigned or otherwise alienated or hypothecated, except by will or the laws of
descent and distribution. Further, no lien, obligation, or liability of the
Participant may be assigned to any right or interest of any Participant in an
Award under this Plan.

         14.5 No Right to Employment. Neither the Plan, nor any Award made, or
              ----------------------
any other action taken, hereunder shall be construed as giving any Participant
or other person any right of employment or continued employment with the
Company.

         14.6 Rights as Shareholder. Subject to the terms and conditions of each
              ---------------------
particular Award, no Participant or Designated Beneficiary shall be deemed a
shareholder of the Company nor have any rights as such with respect to any
shares of Common Stock to be provided under the Plan until he or she has become
the holder of such shares.

         14.7 Construction of the Plan. The Plan and all Agreements shall be
              ------------------------
governed, construed, interpreted and administered in accordance with the laws of
the State of Texas. In the event any provision of the Plan or any Agreement
shall be held invalid, illegal or unenforceable, in whole or in part, for any
reason, such determination shall not affect the validity, legality or
enforceability of any remaining provision, portion of provision or Plan overall,
which shall remain in full force and effect as if the Plan had been absent the
invalid, illegal or unenforceable provision or portion thereof.

         14.8 Amendment of Plan. The Committee or the Board of Directors may
              -----------------
amend, suspend, or terminate the Plan or any portion thereof at any time,
provided such amendment is made with shareholder approval if and to the extent
such approval is necessary to comply with any legal requirement, including for
these purposes any approval requirement which is a requirement for the
performance-based compensation exception under Code Section 162(m).

         14.9 Amendment of Award. In its sole and complete discretion, the
              ------------------
Committee may at any time amend any Award for the following reasons: (i)
additions and/or changes are made to the Code, any federal or state securities
law, or other law or regulations applicable to the Award; or (ii) any other
event not described in clause (i) occurs and the Participant gives his or her
consent to such amendment.

         14.10 Exemption from Computation of Compensation for Other Purposes. By
               -------------------------------------------------------------
acceptance of an applicable Award under this Plan, subject to the conditions of
such Award, each Participant shall be considered in agreement that all shares of
Stock sold or awarded and all Options granted under this Plan shall be
considered extraordinary, special incentive compensation and will not be
included as "earnings," "wages," "salary" or "compensation" in any pension,
welfare, life insurance, or other employee benefit arrangement of the Company.

                                       16
<PAGE>


         14.11 Legend. In its sole and complete discretion, the Committee may
               ------
elect to legend certificates representing Shares sold or awarded under the Plan,
to make appropriate references to the restrictions imposed on such Shares.

         14.12 Certain Participants. All Award Agreements for Participants
               --------------------
subject to Section 16(b) of the Exchange Act shall be deemed to include any such
additional terms, conditions, limitations and provisions as Rule 16b-3 requires,
unless the Committee in its discretion determines that any such Award should not
be governed by Rule 16b-3. All performance-based Awards to Covered Participants
shall be deemed to include any such additional terms, conditions, limitations
and provisions as are necessary to comply with the performance-based
compensation exemption of Code Section 162(m), unless the Committee, in its
discretion, determines that any such Award is not intended to qualify for the
exemption for performance-based compensation under Code Section 162(m).

         14.13 Unfunded Plan. The Plan is intended to constitute an unfunded
               -------------
deferred compensation arrangement for a select group of management or highly
compensated employees.

         EXECUTED effective as of the 10th day of May, 2002.

                     TXU CORP.


                     By:__/s/ Peter B. Tinkham_________
                              Peter B. Tinkham,
                              Secretary and Assistant Treasurer




                                       17
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