exv10w1






Exhibit 10.1




MANAGEMENT STOCKHOLDER’S AGREEMENT

(SENIOR MANAGEMENT FORM)




Oncor Management Investment LLC

Oncor Electric Delivery Company LLC




          This Management Stockholder’s Agreement (this “Agreement”) is effective as of
November 5, 2008 among Oncor Management Investment LLC (the “Company”), a Delaware limited
liability company, Oncor Electric Delivery Company LLC, a Delaware limited liability company
(“Oncor”), and the undersigned person (the “Management Stockholder”) (the Company,
Oncor and the Management Stockholder being hereinafter collectively referred to as the
“Parties”). All capitalized terms not immediately defined are hereinafter defined in
Section 7(b) of this Agreement.




          WHEREAS, the Management Stockholder has been selected by the Company and Oncor (i) to be
permitted to transfer to the Company cash in exchange for Class B Membership Interests (the
“Management Units”) in the Company (the “Cash Purchased Units”); and/or (ii) to be
permitted to designate certain funds held pursuant to the EFH Salary Deferral Plan (the
“Program”) as deemed to be invested in Management Units (any Management Units issuable to a
Management Stockholder Entity (as defined below) pursuant to a distribution under the terms of the
Program, “Deferred Purchased Units” and together with the Cash Purchased Units,
“Purchased Units”), such Purchased Units issued pursuant to the terms set forth below and
the terms of the 2008 Equity Interests Plan for Key Employees of Oncor Delivery Company LLC and its
Affiliates; and/or (iii) has been selected by Oncor to receive the right to certain payments from
Oncor corresponding to appreciation of the Oncor Units (the “Stock Appreciation Rights”)
pursuant to the terms set forth below and the terms of the Oncor Electric Delivery Company LLC
Stock Appreciation Rights Plan (the “Stock Appreciation Rights Plan”) and the Award Letter
to be entered into by and between Oncor and the Management Stockholder on or about the date hereof
(the “Stock Appreciation Rights Agreement”);




          NOW THEREFORE, to implement the foregoing and in consideration of the mutual agreements
contained herein, the Parties agree as follows:




          1. Issuance of Purchased Units and Stock Appreciation Rights.




          (a) Subject to the terms and conditions hereinafter set forth, the Management Stockholder
hereby subscribes for and shall purchase, as of the date hereof, and the Company shall issue and
deliver to the Management Stockholder as of the date hereof, the number of Purchased Units, in each
case as set forth on Schedule I hereto at a $10.00 per unit purchase price (the “Base
Price”), which Base Price is equal to the effective per unit fair market value of the Purchased
Units, taking into account the concurrent issuance of membership interests in Oncor to Texas
Transmission Investment LLC pursuant to the Contribution and Subscription Agreement, dated as of
August 12, 2008, between Oncor and Texas Transmission Investment LLC (the “Minority Sale”),
as determined in good faith by the Managing Member of the Company (the “Managing Member”).




          (b) Subject to certain terms and conditions, including those hereinafter set forth and as set
forth in the Stock Appreciation Rights Plan, which may include the Management Stockholder’s
acquisition of the Purchased Units, Oncor will grant Stock




 









 




Appreciation Rights, based on a determination by the Chief Executive Officer of Oncor and the
Organization and Compensation Committee of the board of directors of Oncor, to the Management
Stockholder, at an initial exercise price equal to the Base Price, to participate in the economic
equivalent of the appreciation of the Oncor Units as set forth in the Stock Appreciation Rights
Plan.




          (c) The Company shall have no obligation to sell any Purchased Units to any person who (i) is
a resident or citizen of a state or other jurisdiction in which the sale of the Purchased Units to
him or her would constitute a violation of the securities or “blue sky” laws of such jurisdiction
or (ii) is not an officer, director or employee of the Company or Oncor (or any Affiliate of Oncor
(the material assets of which consist only of its direct or indirect interest in Oncor, or the
assets of Oncor) used for the purposes of effecting a Public Offering of the vehicle holding the
assets of Oncor (an “IPO Vehicle”)) (the “Management Stockholder Employer”).




          2. Management Stockholder’s Representations, Warranties and Agreements.




          (a) The Management Stockholder agrees and acknowledges that he or she will not, directly or
indirectly, offer, transfer, sell, assign, pledge, hypothecate or otherwise dispose of (any of the
foregoing acts being referred to herein as a “Transfer”) any (x) Purchased Units, or (y)
equity interests in Oncor (or any IPO Vehicle) issued in respect of Stock Appreciation Rights or
distributed to the Management Stockholder by the Company (“Oncor Units”, together with all
equity interests in the Company, equity interests in Oncor or equity interests in any IPO Vehicle
otherwise acquired and/or held by the Management Stockholder Entities, as of or after the date
hereof, and any successor security of any of the foregoing, “Units”), except as provided in
this Section 2(a) and Section 3 hereof. If the Management Stockholder is an Affiliate of any
Management Stockholder Employer, the Management Stockholder also agrees and acknowledges that he or
she will not Transfer any such Units unless:





     (i) the Transfer is pursuant to an effective registration statement under the
Securities Act of 1933, as amended, and the rules and regulations in effect thereunder (the
“Act”), and in compliance with applicable provisions of state securities or “blue
sky” laws; or




     (ii) (A) counsel for the Management Stockholder (which counsel shall be reasonably
acceptable to the Company, Oncor or the IPO Vehicle, as applicable) shall have furnished the
Company, Oncor or the IPO Vehicle, as applicable, with an opinion or other advice,
reasonably satisfactory in form and substance to the Company, Oncor or the IPO Vehicle, as
applicable, that no such registration is required because of the availability of an
exemption from registration under the Act and (B) if the Management Stockholder is a citizen
or resident of any country other than the United States, or the Management Stockholder
desires to effect any Transfer in any such country, counsel for the Management Stockholder
(which counsel shall be reasonably satisfactory to the Company, Oncor or the IPO Vehicle, as
applicable) shall have furnished the Company, Oncor or the IPO Vehicle, as applicable, with
an opinion or other advice reasonably satisfactory in form and substance to the Company,
Oncor or the IPO Vehicle, as applicable, to the effect that such Transfer will comply with
the securities laws of such jurisdiction.



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Notwithstanding the foregoing, the Company and Oncor acknowledge and agree that any of the
following Transfers of Units are deemed to be in compliance with the Act and this Agreement
(including without limitation any restrictions or prohibitions herein), and no opinion of counsel
is required in connection therewith: (1) a Transfer made pursuant to Sections 3, 4, 5, 6 or 9
hereof, (2) a Transfer (x) upon the death or Disability of the Management Stockholder to the
Management Stockholder’s Estate or (y) to the executors, administrators, testamentary trustees,
legatees, immediate family members or beneficiaries of a person who has become a holder of Units in
accordance with the terms of this Agreement; provided that it is expressly understood that
any such transferee shall be bound by the provisions of this Agreement and if requested such
transferee shall agree in writing to be bound by the terms and conditions hereof as a “Management
Stockholder” with respect to the representations and warranties and other obligations of this
Agreement, (3) a Transfer made in compliance with the federal securities laws to a Management
Stockholder’s Trust; provided that such Transfer is made expressly subject to this
Agreement and that the transferee agrees in writing to be bound by the terms and conditions hereof
as a “Management Stockholder” with respect to the representations and warranties and other
obligations of this Agreement; and provided further that it is expressly understood
and agreed that if such Management Stockholder’s Trust at any point includes any person or entity
other than the Management Stockholder, his spouse (or ex-spouse) or his lineal descendants
(including adopted children) such that it fails to meet the definition thereof as set forth in
Section 7(b) hereof, such Transfer shall no longer be deemed in compliance with this Agreement and
shall be subject to Section 3(c) below and (4) a Transfer made by the Management Stockholder, with
the Managing Member’s or the board of directors of Oncor’s, or the IPO Vehicle’s, as applicable,
approval, to the Company or Oncor, as applicable, or their designee.




          (b) The certificate (or certificates) representing the Units, if any, shall bear the following
legend:





“THE UNITS REPRESENTED BY THIS CERTIFICATE MAY NOT BE TRANSFERRED, SOLD, ASSIGNED,
PLEDGED, HYPOTHECATED OR OTHERWISE DISPOSED OF UNLESS SUCH TRANSFER, SALE,
ASSIGNMENT, PLEDGE, HYPOTHECATION OR OTHER DISPOSITION COMPLIES WITH THE PROVISIONS
OF THE MANAGEMENT STOCKHOLDER’S AGREEMENT AMONG ONCOR MANAGEMENT INVESTMENT LLC (THE
“COMPANY”), ONCOR ELECTRIC DELIVERY COMPANY LLC (“ONCOR”) AND THE MANAGEMENT
STOCKHOLDER NAMED ON THE FACE HEREOF OR THE SALE PARTICIPATION AGREEMENT AMONG SUCH
MANAGEMENT STOCKHOLDER, ONCOR ELECTRIC DELIVERY HOLDINGS COMPANY LLC, IN EACH CASE
EFFECTIVE AS OF NOVEMBER 5, 2008 (COPIES OF WHICH ARE ON FILE WITH THE SECRETARY OF ONCOR)
AND ALL APPLICABLE FEDERAL AND STATE SECURITIES LAWS.”



          (c) The Management Stockholder acknowledges that he or she has been advised that (i) the Units
are characterized as “restricted securities” under the Act inasmuch as they are being acquired from
the Company, Oncor or the IPO Vehicle in a transaction not involving a Public Offering and that
under the Act (including applicable regulations) the Units may be resold without registration under
the Act only in certain limited circumstances,




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(ii) a restrictive legend in the form heretofore set forth shall be placed on the certificates
(if any) representing the Units and (iii) a notation shall be made in the appropriate records of
the Company, Oncor or the IPO Vehicle, as applicable, indicating that the Units are subject to
restrictions on Transfer and appropriate stop transfer restrictions will be issued to the
Company’s, Oncor’s or the IPO Vehicle’s, as applicable, transfer agent with respect to the Units.




          (d) If any Units are to be disposed of in accordance with Rule 144 under the Act or otherwise,
the Management Stockholder shall promptly notify the Company, Oncor or the IPO Vehicle, as
applicable, of such intended disposition and shall deliver to the Company, Oncor or the IPO
Vehicle, as applicable, at or prior to the time of such disposition such documentation as the
Company, Oncor or the IPO Vehicle, as applicable, may reasonably request in connection with such
sale and, in the case of a disposition pursuant to Rule 144, shall deliver to the Company, Oncor or
the IPO Vehicle, as applicable, an executed copy of any notice on Form 144 required to be filed
with the SEC.




          (e) The Management Stockholder represents and warrants that (i) with respect to the Units and
Stock Appreciation Rights, the Management Stockholder has received and reviewed the available
information relating to such Units and Stock Appreciation Rights, including a Preliminary
Confidential Private Placement Memorandum and any supplements thereto, including having received
and reviewed the documents related thereto, certain of which documents set forth the rights,
preferences and restrictions relating to the Units and the Stock Appreciation Rights and (ii) the
Management Stockholder has been given the opportunity to obtain any additional information or
documents, and to ask questions and receive answers about such information and documents, regarding
the Company, Oncor and the business and prospects of the Company and Oncor which the Management
Stockholder deems necessary to evaluate the merits and risks related to the Management
Stockholder’s investment in the Units and any Stock Appreciation Rights and to verify the
information contained in the information received as indicated in this Section 2(e), and the
Management Stockholder has relied solely on such information.




          (f) The Management Stockholder further represents and warrants that (i) the Management
Stockholder’s financial condition is such that the Management Stockholder can afford to bear the
economic risk of holding his or her Units for an indefinite period of time and has adequate means
for providing for the Management Stockholder’s current needs and personal contingencies, (ii) the
Management Stockholder can afford to suffer a complete loss of his or her investment in the Units,
(iii) the Management Stockholder understands and has taken cognizance of all risk factors related
to the purchase of the Units, (iv) the Management Stockholder’s knowledge and experience in
financial and business matters are such that the Management Stockholder is capable of evaluating
the merits and risks of the Management Stockholder’s purchase of the Units as contemplated by this
Agreement, (v) with respect to the Purchased Units, such Purchased Units are being acquired by the
Management Stockholder for his or her own account, not as nominee or agent, and not with a view to
the resale or distribution of any part thereof in violation of the Act, and the Management
Stockholder has no present intention of selling or otherwise distributing the Purchased Units in
violation of the Act, and (vi) the Management Stockholder is (a) if the applicable box on the
signature page hereto has been checked, an “accredited investor”1






 




			
	1	 	“Accredited Investors” include persons who come within
the meaning of any of the following categories at the time of sale of the
Units:




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within the meaning of Rule 501(a) under the Securities Act that is willing and able to conduct
an independent investigation of the risks of investing in the Company, or, if not an accredited
investor, and (b) if such box has not been checked, an employee, director or officer of a
Management Stockholder Employer.




          3. Transferability of Units.




          (a) The Management Stockholder agrees that he or she will not Transfer any Units at any time
during the period commencing on the date hereof and ending on the later of (x) October 10, 2012 and
(y) for any Subject Stock (as defined below in the definition of “Qualified Public
Offering”), the consummation of a Qualified Public Offering with respect to such Subject Stock;
provided, however, that during such period, the Management Stockholder may Transfer
Units pursuant to one of the following exceptions: (i) Transfers permitted by Sections 4, 5 or 6;
(ii) Transfers permitted by clauses (2) and (3) of Section 2(a); (iii) a sale of Units pursuant to
Section 9; (iv) Transfers permitted pursuant to the Sale Participation Agreement; (v) Transfers
permitted by the Managing Member, board of directors of Oncor or the IPO Vehicle, as applicable, or
(vi) Transfers to the Company, Oncor or the IPO Vehicle, as applicable, or their designee (any such
exception, a “Permitted Transfer”).




          (b) No Transfer of any such Units in violation hereof or in violation of applicable law shall
be made or recorded on the books of the Company, Oncor or the IPO Vehicle and any such Transfer
shall be void ab initio and of no effect.




          (c) No Transfer of any Units shall be permitted or effected if such Transfer would cause the
Company, Oncor or the IPO Vehicle to be required to register the Management Units or the Oncor
Units pursuant to Section 12(g)(1) of the Exchange Act.




          (d) Notwithstanding anything to the contrary herein, the Company, Oncor or the IPO Vehicle, as
the case may be, may, at any time and from time to time, waive the restrictions on Transfers
contained in Section 3(a), whether such waiver is made prior to or after the transferee has
effected or committed to effect the Transfer, or has notified the Company, Oncor or the IPO
Vehicle, as the case may be, of such Transfer or commitment to Transfer. Any Transfers made
pursuant to such waiver or which are later made subject to such a waiver shall, as of the date of
the waiver and at all times thereafter, not be deemed to violate any applicable restrictions on
Transfers contained in this Agreement.




          4. Rights on Certain Liquidity Events.




          (a) In the event that at any time on or after the date hereof Parent or any member of the
Sponsor Group proposes to sell directly for cash or any other consideration any shares of EFH
Common Stock owned by Parent or 50% or more of the outstanding





	 	•	 	any director or executive officer of Oncor;
	 
	 	•	 	any natural person whose individual net worth, or joint net worth with that
person’s spouse, at the time of purchase exceeds $1 million; or
	 
	 	•	 	any natural person who for the two most recent years had an individual income
in excess of $200,000, or joint income with that person’s spouse in excess of
$300,000 and has a reasonable expectation of reaching that same level of income
in the current year.





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limited partnership units of Parent in any transaction (other than an offering pursuant to a
registration statement on Form S-4 or Form S-8 (or similar forms) or a sale, directly or
indirectly, to an Affiliate of Parent or any member of the Sponsor Group), in which management
members of EFH Corp. (“EFH Management”) are permitted to sell shares of EFH Common Stock
pursuant to any “tag rights” or “piggy-back rights” under a sale participation agreement,
registration rights agreement or similar agreement with EFH Corp. or Parent (“EFH Management
Sale”), then, unless Parent or a member of the Sponsor Group is entitled to and does exercise
the drag-along rights pursuant to an EFH Drag Transaction (as defined below), at the option of the
Management Stockholder, the Management Stockholder shall have the right, subject to any terms,
conditions, limitations or adjustments imposed on any EFH Management Sale and on completion of such
EFH Management Sale, to offer for redemption Management Units to the Company, Oncor Units to Oncor
or successor common equity of the IPO Vehicle (“IPO Stock”) to the IPO Vehicle, as
applicable, and the Company, Oncor or the IPO Vehicle, as applicable, shall be required to
repurchase (subject to any legal or contractual limitations on liquidity at the Company, Oncor or
the IPO Vehicle), on one occasion, a number of Management Units, Oncor Units or shares of IPO
Stock, as applicable, held by the Management Stockholder equal to (x) the total number of
Management Units, Oncor Units or IPO Stock, as applicable, held by the Management Stockholder
multiplied by (y) the EFH Sale Percentage, at a per unit price equal to the Fair Market Value as
determined as of the date that the price to be received by Parent or member of the Sponsor Group,
as applicable, is determined. The “EFH Sale Percentage” shall mean the fraction, expressed
as a percentage, determined by (i) with respect to sales of EFH Common Stock, dividing the number
of shares of EFH Common Stock to be purchased from Parent pursuant to the applicable transaction
that would cause the provisions contained in Sections 4(a) or 4(b) hereof to take effect, by the
total number of shares of EFH Common Stock owned by Parent, or (ii) with respect to sales of
limited partnership units of Parent, dividing the number of limited partnership units of Parent to
be purchased from members of the Sponsor Group pursuant to the applicable transaction that would
cause the provisions contained in Sections 4(a) or 4(b) hereof to take effect, by the total number
of limited partnership units of Parent owned by such selling members of the Sponsor Group.




          (b) If Parent or a member of the Sponsor Group proposes to sell, directly or indirectly
(without duplication) (whether by means of a merger, consolidation, reorganization or
recapitalization, sale, transfer or otherwise), a number of shares of EFH Common Stock or limited
partnership units of Parent equal to 50% or more of the outstanding EFH Common Stock or limited
partnership units of Parent, as applicable (such Person, the “EFH Drag-Along Purchaser”),
then, if requested by Parent or a member of the Sponsor Group, each Management Stockholder shall be
required to offer for redemption a number of Units to the Company or Oncor or IPO Stock to the IPO
Vehicle, as applicable, equal to the aggregate number of Units held by the Management Stockholder,
multiplied by the EFH Sale Percentage (such transaction, an “EFH Drag Transaction”),
subject to any terms, conditions, limitations or adjustments imposed on any EFH Management Sales,
at a per unit price equal to the Fair Market Value as determined as of the date that the price to
be received by Parent or member of the Sponsor Group, as applicable, is determined.




          (c) In the event of any EFH Management Sale or EFH Drag Transaction under this Section 4, the
Company, Oncor or the IPO Vehicle, as applicable, will provide the Management Stockholder with
notice substantially similar to any notice provided to EFH




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Management upon receiving notice of such transactions from EFH Corp or a member of the Sponsor
Group.




          (d) In the event that at any time prior to a Public Offering of Oncor Units or IPO Stock, a
Related Entity proposes to sell directly for cash or any other consideration any Oncor Units owned
by a Related Entity in any transaction (other than an offering pursuant to a registration statement
on Form S-4 or Form S-8 (or similar forms) or in connection with the initial Public Offering of
Oncor Units or IPO Stock pursuant to a registration statement under the Act which has been declared
effective by the SEC or a sale, directly or indirectly, to an Affiliate of such Related Entity),
then, unless such Related Entity is entitled to and does exercise the drag-along rights pursuant to
an Oncor Drag Transaction (as defined below), at the option of the Management Stockholder, the
Management Stockholder shall have the right, subject to any terms, conditions, limitations or
adjustments imposed on the sale by such Related Entity and on completion of such sale, to offer for
redemption Management Units to the Company, and the Company shall be required to repurchase
(subject to any legal or contractual limitations on liquidity at the Company), on one occasion, a
number of Management Units held by the Management Stockholder Entity equal to (x) the total number
of Management Units held by the Management Stockholder Entity multiplied by (y) the Oncor Sale
Percentage, at a per unit price equal to the Fair Market Value as determined as of the date that
the price to be received by such Related Entity is determined. The “Oncor Sale Percentage”
shall mean the fraction, expressed as a percentage, determined by dividing the number of Oncor
Units to be purchased from the relevant Related Entity pursuant to the applicable transaction that
would cause the provisions contained in Sections 4(d) or 4(e) hereof to take effect, by the total
number of Oncor Units owned by such Related Entity.




          (e) If a Related Entity proposes to sell, directly or indirectly (whether by means of a
merger, consolidation, reorganization or recapitalization, sale, transfer or otherwise), a number
of Oncor Units equal to 50% or more of the outstanding Oncor Units (such Person, the “Oncor
Drag-Along Purchaser”), then, if requested by such Related Entity, each Management Stockholder
shall be required to offer for redemption to the Company, and the Company will be required to
repurchase (subject to any legal or contractual limitations on liquidity at the Company), a number
of Management Units equal to the aggregate number of Management Units held by the Management
Stockholder, multiplied by the Oncor Sale Percentage (such transaction, an “Oncor Drag
Transaction”), subject to any terms, conditions, limitations or adjustments imposed on the sale
by Oncor Holdings, at a per unit price equal to the Fair Market Value as determined as of the date
that the price to be received by such Related Entity is determined.




          (f) In the event of any transaction that would cause the provisions contained in Sections 4(d)
and 4(e) hereof to take effect, the relevant Related Entity will provide the Management Stockholder
with notice of such proposed sale specifying the principal terms and conditions of such proposed
sale including (A) the number of Oncor Units proposed to be included in such proposed sale, (B) the
percentage of the outstanding Oncor Units at the time the notice is given that is represented by
the number of Oncor Units proposed to be included in such proposed sale, (C) the price per Oncor
Unit subject to such proposed sale, including a description of any pricing formulae and of any
non-cash consideration, (D) the Oncor Sale Percentage (as defined above) of the relevant Related




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Entity and (E) the name and address of the Person to whom the Oncor Units is proposed to be
sold.




          (g) If, within 10 Business Days after the delivery of any notice under Section 4(c) or (f),
the Company or Oncor, as applicable, receives from a Management Stockholder a written request (a
“Request”) to Transfer Units pursuant to the terms of Section 4(a) or (d), as applicable
(which Request shall be irrevocable except (a) as provided for by any terms, conditions,
limitations or adjustments imposed on any EFH Management Sales or on sale of Oncor Units by a
Related Entity or (b) if otherwise mutually agreed to in writing by the Management Stockholder
Entity and the transferee of the Units) then such Management Stockholder shall be considered to
have validly exercised his rights as provided for under Section 4(a) or (d), as applicable. If a
Request is not received by the Company or Oncor, as applicable, within the time period stated in
the preceding sentence, the Management Stockholder’s rights under Section 4(a) and (d) shall have
been waived.




          (h) Leveraged Recapitalization Transactions. In the event that at any time after the date
hereof EFH Corp. consummates a leveraged recapitalization transaction pursuant to which members of
EFH Management who are holders of shares of EFH Common Stock are entitled to receive an
extraordinary special dividend from the proceeds of such transaction, then the Management
Shareholders shall receive from Oncor or the IPO Vehicle, as applicable, a liquidity opportunity,
comparable adjustment or other payment in a manner and in an amount which is similar to that
received by members of EFH Management who are holders of shares of EFH Common Stock, as the board
of Oncor determines is equitable and appropriate.




          (i) Use of Note to Satisfy Payment. Notwithstanding anything in this Agreement to the
contrary, if an Event (as defined in Section 5(c)) exists, or may exist as a result of a purchase
by the Company, Oncor or the IPO Vehicle pursuant to this Section 4, and the Company, Oncor or the
IPO Vehicle elects or is required to purchase Units pursuant to this Section 4, the Company, Oncor
or the IPO Vehicle, as applicable, may elect to pay the consideration for any such purchase
pursuant to (i) a cash payment for any amounts payable pursuant to this Section 4 or (ii) a note
having the same terms as that provided in Section 5(c) below with a principal amount equal to the
amount payable. Notwithstanding the foregoing, if an Event exists and is continuing for ninety
(90) days from the date of delivery of the notice under Section 4(c) or (f), as applicable, the
Management Stockholder Entities shall be permitted by written notice to rescind any Request with
respect to that portion of the Units repurchased by the Company, Oncor or the IPO Vehicle, as
applicable, from the Management Stockholder Entities pursuant to this Section 4 with the note
described in the foregoing sentence, to the extent such note remains unpaid; provided that,
upon such rescission, such repurchase shall be immediately rescinded and such note shall be
immediately canceled without any action on the part of the Company, Oncor, the IPO Vehicle or the
Management Stockholder Entities and, notwithstanding anything herein or in such note to the
contrary, the Company, Oncor and the IPO Vehicle shall have no obligation to pay any amounts of
principal or interest thereunder.




          (j) Timing of Payment. Notwithstanding anything to the contrary contained in this Section 4,
payment of consideration for any Transfer of Units by the Company shall in no event be due earlier
than on or about the second business day after the date of payment of the next regular quarterly
dividend paid by Oncor following the date of Transfer.




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          (k) Termination. Notwithstanding anything in this Agreement to the contrary, this Section 4
shall terminate and be of no further force or effect upon the earlier of (i) a Change in Control,
or (ii) the later of (x) October 10, 2012 or (y) for any Subject Stock, the consummation of a
Qualified Public Offering with respect to that Subject Stock, except for any payment obligation of
the Company, Oncor or the IPO Vehicle or Transfer obligation of the Management Stockholder Entities
which has arisen prior to such termination date.





	 	5.	 	The Management Stockholder’s Right to Resell Units and
Stock Appreciation Rights to the Company or Oncor, as Applicable.





          (a) Except as otherwise provided herein, if the Management Stockholder’s employment with the
Management Stockholder Employer terminates as a result of the death or Disability of the Management
Stockholder, then the applicable Management Stockholder Entity shall, during the later of the
following: (x) the 365-day period following the date of such termination for death or Disability or
(y) if the Company, Oncor or the IPO Vehicle has declared that an Event (as defined below) has
occurred, the 30-day period following the date on which the Management Stockholder Entity receives
notice that the Event which was declared by the Company, Oncor or the IPO Vehicle, as applicable,
while the Management Stockholder Entity held the Units, no longer exists; provided,
however, the Management Stockholder Entity shall not be entitled to exercise the Management
Stockholder’s rights pursuant to this Section 5 unless the Management Stockholder Entity has held
the Units to be resold pursuant to this Section 5 for at least six (6) months (including as a
result of net settlement as specified in Section 5(a)(ii)) (the “Redemption Period”), have
the right to:





     (i) With respect to Units, offer for redemption to the Company, Oncor or the IPO
Vehicle, as applicable, and the Company, Oncor or the IPO Vehicle, as applicable, shall be
required to repurchase, on one occasion, all of the Units then held by the applicable
Management Stockholder Entities at a per unit price equal to the Fair Market Value on the
Repurchase Calculation Date;




     (ii) With respect to any outstanding vested Stock Appreciation Rights, upon the
occurrence of the applicable event identified in this Section 5 giving rise to the
Management Stockholder’s rights hereunder, Oncor or the IPO Vehicle, as applicable, shall
deem the Management Stockholder Entity to have exercised the outstanding vested Stock
Appreciation Rights, in accordance with the terms of the relevant Stock Appreciation Rights
Agreement, and be entitled to receive from Oncor or the IPO Vehicle, as applicable, on one
occasion, in exchange for all of the outstanding vested Stock Appreciation Rights then held
by the applicable Management Stockholder Entity, if any, cash equal to the product of (A)
the excess, if any, of the Fair Market Value on the Repurchase Calculation Date over the
Base Price and (B) the number of Stock Appreciation Rights then credited to such Management
Stockholders Account. In the event the foregoing amount is zero or a negative number, all
outstanding vested Stock Appreciation Rights shall be automatically terminated without any
payment in respect thereof; and



          (iii) With respect to any outstanding unvested Stock Appreciation Rights, all
outstanding unvested Stock Appreciation Rights shall be terminated and cancelled without any
payment in respect thereof.




          (b) Notice. In the event the applicable Management Stockholder Entities intend to exercise
their rights pursuant to Section 5(a), such Management Stockholder




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Entities shall send written notice to the Company, Oncor or the IPO Vehicle, as applicable, at
any time during the Redemption Period, of their intention to offer for redemption Units (including
redemption of Stock Appreciation Rights for cash) in exchange for the payments referred to in
Section 5(a)(i) and (a)(ii) and shall indicate the number of Stock Appreciation Rights and Units to
be sold (the “Redemption Notice”). The completion of the purchases shall take place at the
principal office of Oncor no later than, subject to Section 5(e) below which provides for the
payment shortly following payment of quarterly dividends by Oncor, the twentieth Business Day (such
date to be determined by the Company, Oncor or the IPO Vehicle, as applicable) after the giving of
the Redemption Notice. The applicable Redemption Price shall be paid by delivery to the applicable
Management Stockholder Entities, at the option of the Company, Oncor or the IPO Vehicle, as
applicable, of a certified bank check or checks in the appropriate amount payable to the order of
each of the applicable Management Stockholder Entities (or by wire transfer of immediately
available funds, if the Management Stockholder Entities provide to Oncor wire transfer
instructions) against delivery of certificates or other instruments representing the Units so
purchased.




          (c) Use of Note to Satisfy Call Payment. Notwithstanding anything in this Section 5 to the
contrary, if there exists and is continuing a default or an event of default on the part of the
Company, Oncor, the IPO Vehicle or any of their respective Subsidiaries under any loan, guarantee
or other agreement under which the Company, Oncor, the IPO Vehicle or any of their respective
Subsidiaries has borrowed money or if the repurchase or redemption referred to in Section 5(a) (or
Section 4 or Section 6 hereof, as the case may be) would result in a default or an event of default
on the part of the Company, Oncor, the IPO Vehicle or any of their respective Subsidiaries under
any such agreement or if a repurchase or redemption would reasonably be expected to be prohibited
by the Delaware Limited Liability Company Act (“DLLCA”), Public Utility Commission of Texas
or any federal or state securities laws or regulations (or if the Company, Oncor, the IPO Vehicle
or any of their respective Subsidiaries reorganizes in another state, the business corporation law,
limited liability company law or other law of such state) (each such occurrence being an
“Event”), the Company, Oncor and/or the IPO Vehicle, as applicable, shall not be obligated
to repurchase or redeem any of the Units or the Stock Appreciation Rights from the applicable
Management Stockholder Entities to the extent it would cause any such default, or would be so
prohibited by the Event, for cash but instead, with respect to such portion with respect to which
cash settlement is prohibited, may satisfy its obligations with respect to the Management
Stockholder Entities’ exercise of their rights under Section 5(a) by delivering to the applicable
Management Stockholder Entity a note with a principal amount equal to the amount payable under this
Section 5 that was not paid in cash, having terms acceptable to the Company, Oncor, the IPO Vehicle
or any of their respective Subsidiaries, as applicable, lenders and permitted under the Company,
Oncor, the IPO Vehicle or any of their respective Subsidiaries, as applicable, debt instruments but
which in any event (i) shall be mandatorily repayable promptly to the extent that an Event no
longer prohibits the payment of cash to the applicable Management Stockholder Entity pursuant to
this Agreement; and (ii) shall bear interest at a rate equal to the effective rate of interest in
respect of Oncor’s U.S. dollar-denominated subordinated public debt securities.




          (d) Rescission. Notwithstanding the foregoing and subject to Section 5(c), if an Event exists
and is continuing for ninety (90) days after the date of the Redemption Notice, the Management
Stockholder Entities, shall be permitted by written notice to rescind any Redemption Notice with
respect to that portion of the Units repurchased by the Company, Oncor or the IPO Vehicle, as
applicable, from the Management Stockholder




10









 




Entities pursuant to this Section 5 with the note described above, to the extent such note
remains unpaid, and such repurchase or redemption shall be rescinded; provided that, upon
such rescission, such note shall be immediately canceled without any action on the part of the
Company, Oncor, the IPO Vehicle or the Management Stockholder Entities, and notwithstanding
anything herein or in such note to the contrary, the Company, Oncor, the IPO Vehicle and their
Affiliates shall have no obligation to pay any amounts of principal or interest thereunder.




          (e) Timing of Payment. Notwithstanding anything to the contrary contained in this Section 5,
payment on any Transfer of Units by the Company shall in no event be due earlier than on or about
the second business day after the date of payment of the next regular quarterly dividend paid by
Oncor following the date of Transfer, as applicable.




          (f) Termination. Notwithstanding anything in this Agreement to the contrary, this Section 5
shall terminate and be of no further force or effect upon the earlier of (i) a Change in Control,
or (ii) the later of (x) October 10, 2012 or (y) for a Subject Stock, the consummation of a
Qualified Public Offering with respect to that Subject Stock, except for any payment obligation of
the Company, Oncor or the IPO Vehicle or Transfer obligation of the Management Stockholder Entities
which has arisen prior to such termination date.





	 	6.	 	The Company’s and Oncor’s Option to Purchase Units and
Redeem Stock Appreciation Rights of the Management Stockholder Upon Certain
Terminations of Employment.





          (a) Termination by the Management Stockholder without Good Reason. If the Management
Stockholder’s active employment with the Management Stockholder Employer is terminated by the
Management Stockholder without Good Reason, other than on account of death, Disability or
Retirement (such event, a “Section 6(a) Call Event”), then:





     (i) With respect to any Purchased Units, the Company, Oncor or the IPO Vehicle, as the
case may be, may purchase, on one occasion, all or any portion of such Management Units,
then held by the applicable Management Stockholder Entities at a per unit purchase price
equal to the Base Price, but only if such termination occurs prior to October 10, 2012;




     (ii) With respect to any Oncor Units or IPO Stock, as applicable, issued in respect of
vested Stock Appreciation Rights, Oncor or the IPO Vehicle may purchase, on one occasion,
all or any portion of the Oncor Units or shares of such IPO Stock, as applicable, then held
by the applicable Management Stockholder Entities at a per unit purchase price equal to (x)
if such termination occurs prior to October 10, 2012, the per unit Fair Market Value of
Oncor Units or IPO Stock, as applicable, less 20% of the amount, if any, by which such per
unit Fair Market Value exceeds the Base Price of the underlying Stock Appreciation Rights in
respect of which such units or shares were issued, or (y) if such termination occurs on or
after October 10, 2012, the per unit Fair Market Value of Oncor Units or IPO Stock, as
applicable, on the Repurchase Calculation Date;




     (iii) With respect to any vested Stock Appreciation Rights, Oncor may



11









 







redeem, on one occasion, all or any portion of such Stock Appreciation Rights then held
by the applicable Management Stockholder Entities at a per unit purchase price equal to (x)
if such termination occurs prior to October 10, 2012 the excess, if any, of the Fair Market
Value on the Repurchase Calculation Date over the Base Price less 20 percent of the excess,
if any, by which such Fair Market Value exceeds the Base Price, or (y) if such termination
occurs on or after October 10, 2012, the excess, if any, of the Fair Market Value on the
Repurchase Calculation Date over the Base Price of the underlying Stock Appreciation Rights.
In the event the foregoing amount is zero or a negative number, all outstanding vested
Stock Appreciation Rights shall be automatically terminated without any payment in respect
thereof;




     (iv) With respect to any cash payment received in respect of vested and exercised Stock
Appreciation Rights, the applicable Management Stockholder Entity shall be required to pay
to Oncor or the IPO Vehicle, as applicable, 20% of the excess, if any, by which such cash
payment exceeds the Base Price of the underlying Stock Appreciation Rights in respect of
which such cash payment was made, if such termination occurs prior to October 10, 2012 (for
the avoidance of doubt, this paragraph (iv) shall in no way diminish rights granted under
paragraph (iii) above); and




     (v) With respect to any outstanding unvested Stock Appreciation Rights, all outstanding
unvested Stock Appreciation Rights will be automatically terminated without any payment in
respect thereof upon the occurrence of the Section 6(a) Call Event.



          For the avoidance of any doubt, the termination of the Management Stockholder’s active employment
with the Management Stockholder Employer by the Management Stockholder without Good Reason
following October 10, 2012 shall not constitute a Section 6(a) Call Event with respect to the
Purchased Units.




          (b) Termination for Cause and other Call Events. If at any time (i) the Management
Stockholder’s active employment with the Management Stockholder Employer is terminated by the
Management Stockholder Employer for Cause or (ii) within twelve (12) months following any
termination of the Management Stockholder’s employment with the Management Stockholder Employer,
the Management Stockholder engages in a Competing Business (such event under item (ii) above, a
“Section 6(b)(ii) Call Event” and each event described above under items (i) and (ii), a
“Section 6(b) Call Event”), then:





     (i) With respect to Purchased Units held by the Management Stockholder, the Company,
Oncor or the IPO Vehicle, as the case may be, may purchase, on one occasion, all or any
portion of such Management Units then held by the applicable Management Stockholder Entities
at a per unit purchase price equal to the lesser of (x) Base Price (or other applicable
price paid by such Management Stockholder Entities for the Management Units) and (y) Fair
Market Value of the Management Units;




     (ii) With respect to any Oncor Units or IPO Stock or cash payment received in respect
of vested and exercised Stock Appreciation Rights, the applicable Management Stockholder
Entity shall be required to return the Oncor Units or IPO



12









 







Stock to, or pay any amounts actually paid to him or her or otherwise received in
respect of any exercise or disposition of any Stock Appreciation Rights, as applicable, to
Oncor or the IPO Vehicle;




     (iii) With respect to any outstanding Stock Appreciation Rights (whether vested or
unvested) all outstanding Stock Appreciation Rights shall be automatically terminated or
forfeited, as applicable, without any payment in respect thereof upon the occurrence of the
Section 6(b) Call Event; and




     (iv) Notwithstanding the foregoing, to the extent the Management Stockholder engages in
a Section 6(b)(ii) Call Event after the Management Stockholder has exercised his or her
outstanding Stock Appreciation Rights or received cash in respect of any repurchase or
disposition of any Management Units, Oncor Units or IPO Stock, Section 22(c) shall apply.



          (c) Call Notice. The Company, Oncor or the IPO Vehicle, as applicable, shall have a period
(the “Call Period”) of one hundred eighty (180) days following the later to occur of (A)
the date of any Call Event and (B) the date on which the Management Stockholder Entity has held the
Units or Stock Appreciation Rights most recently acquired to be sold or redeemed pursuant to this
Section 6 for at least six (6) months, in which to give notice in writing to the Management
Stockholder of its election to exercise its rights and obligations pursuant to this Section 6
(“Repurchase Notice”). The completion of the purchases pursuant to the foregoing shall
take place at the principal office of the Company, Oncor or the IPO Vehicle, as applicable, no
later than, subject to Section 6(e) below which provides for the payment of quarterly dividends by
Oncor or the IPO Vehicle, the fifteenth Business Day after the giving of the Repurchase Notice.
The applicable Repurchase Price shall be paid by delivery to the applicable Management Stockholder
Entities of a certified bank check or checks in the appropriate amount payable to the order of each
of the applicable Management Stockholder Entities (or by wire transfer of immediately available
funds, if the Management Stockholder Entities provide to the Company, Oncor or the IPO Vehicle, as
applicable wire transfer instructions) against delivery of certificates or other instruments
representing the Units so purchased. For purposes of this Section 6, any determination of Fair
Market Value shall be made as of the Repurchase Calculation Date.




          (d) Use of Note to Satisfy Call Payment. Notwithstanding any other provision of this
Section 6 to the contrary, if there exists and is continuing any Event, the Company, Oncor or the
IPO Vehicle will, to the extent it has exercised its rights to purchase Units or redeem any Stock
Appreciation Rights pursuant to this Section 6, in order to complete the purchase of any Units or
redeem any Stock Appreciation Rights pursuant to this Section 6, deliver to the applicable
Management Stockholder Entities (i) a cash payment for any amounts payable pursuant to this Section
6 that would not cause an Event and (ii) a note having the same terms as that provided in Section
5(c) above with a principal amount equal to the amount payable but not paid in cash pursuant to
this Section 6 due to the Event. Notwithstanding the foregoing, if an Event exists and is
continuing for ninety (90) days from the date of the Section 6(b) Call Event, the Management
Stockholder Entities shall be permitted by written notice to cause the Company, Oncor or the IPO
Vehicle, as applicable, to rescind any Repurchase Notice with respect to that portion of the Units
repurchased or Stock Appreciation Rights redeemed by the Company, Oncor or the IPO Vehicle from the
Management Stockholder Entities pursuant to this Section 6 with the note described in the




13









 




foregoing sentence, to the extent such note remains unpaid; provided that, upon such
rescission, such repurchase or redemption shall be immediately rescinded and such note shall be
immediately canceled without any action on the part of the Company, Oncor, the IPO Vehicle or the
Management Stockholder Entities and, notwithstanding anything herein or in such note to the
contrary, the Company, Oncor and the IPO Vehicle shall have no obligation to pay any amounts of
principal or interest thereunder.




          (e) Timing of Payment. Notwithstanding anything to the contrary contained in this Section 6,
payment on any Transfer of Units by the Company shall in no event be due earlier than on or about
the second business day after the date of payment of the next regular quarterly dividend paid by
Oncor following the date of Transfer.




          (f) Termination. Notwithstanding anything in this Agreement to the contrary, this Section 6
shall terminate and be of no further force or effect upon the earlier of (i) a Change in Control,
or (ii) the later of (x) October 10, 2012 or (y) for a Subject Stock, the consummation of a
Qualified Public Offering with respect to that Subject Stock, except for any payment obligation of
the Company, Oncor or the IPO Vehicle or Transfer obligation of the Management Stockholder Entities
which has arisen prior to such termination date.




          7. Adjustment of Repurchase Price; Definitions.




          (a) Adjustment of Repurchase Price. In determining the applicable repurchase price of the
Units and Stock Appreciation Rights, as provided for in Sections 4, 5 and 6, above, appropriate
adjustments shall be made for any stock or unit dividends, splits, combinations, recapitalizations
or any other adjustment in the number of outstanding Units in order to maintain, as nearly as
practicable, the intended operation of the provisions of Sections 4, 5 and 6.




          (b) Definitions. All capitalized terms used in this Agreement and not defined herein shall
have the meaning ascribed to such terms in the Stock Appreciation Rights Plan. Terms used herein
and as listed below shall be defined as follows:




     “Account” shall mean a book account of Oncor where Stock Appreciation Rights will be
credited.



     “Act” shall have the meaning set forth in Section 2(a)(i) hereof.



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



     “Agreement” shall have the meaning set forth in the introductory paragraph.



     “Base Price” shall have the meaning set forth in Section 1(a) hereof.



     “Business Day” means any day that is not a Saturday, a Sunday or other day on which
banks are required or authorized by law to be closed in the state of New York.



     “Call Events” shall mean, collectively, Section 6(a) Call Events and Section 6(b) Call
Events.




14












 





     “Call Period” shall have the meaning set forth in Section 6(c) hereof.



     “Cash Purchased Units” shall have the meaning set forth in the first recital.



     “Cause” shall mean “Cause” as such term may be defined in any employment agreement or
change-in-control agreement in effect at the time of termination of employment between the
Management Stockholder and the Management Stockholder Employer, or, if there is no such employment
or change-in-control agreement, “Cause” means, with respect to a Management Stockholder: (i) if, in
carrying out his or her duties to the Management Stockholder Employer, Management Stockholder
engages in conduct that constitutes (a) a breach of his or her fiduciary duty to the Management
Stockholder Employer, its Subsidiaries or their shareholders (including, without limitation a
breach or attempted breach of the restrictive covenants under this Agreement), (b) gross neglect or
(c) gross misconduct resulting in material economic harm to the Management Stockholder Employer or
its Subsidiaries, taken as a whole, or (ii) upon the indictment of the Management Stockholder, or
the plea of guilty or nolo contendere by Management Stockholder to, a felony or a misdemeanor
involving moral turpitude.



     “Change in Control” shall mean, in one or a series of related transactions, (i) the
sale of all or substantially all of the consolidated assets or capital stock of EFH Corp., Oncor
Holdings or Oncor to a person (or group of persons acting in concert) who is not an Affiliate of
any member of the Sponsor Group; (ii) a merger, recapitalization or other sale by EFH Corp., any
member of the Sponsor Group or their Affiliates, to a person (or group of persons acting in
concert) of EFH Common Stock that results in more than 50% of the EFH Common Stock (or any
resulting company after a merger) being held by a person (or group of persons acting in concert)
that does not include any member of the Sponsor Group or any of their respective Affiliates; or
(iii) a merger, recapitalization or other sale of EFH Common Stock by EFH Corp., any member of the
Sponsor Group or their Affiliates, after which the Sponsor Group owns less than 20% of the EFH
Common Stock, and has the ability to appoint less than a majority of the directors to the board of
directors of EFH Corp. (or of any resulting company after a merger); and with respect to any of the
events described in clauses (i) and (ii) above, such event results in any person (or group of
persons acting in concert) gaining control of more seats on the board of directors of EFH Corp.
than the Sponsor Group; provided however, that not withstanding the foregoing, (x)
clause (i) above shall be deemed not to include any reference to EFH Corp., and clauses (ii) and
(iii) shall not apply, in each case, for purposes of interpreting the termination or applicability
of any puts, calls or release from transfer restrictions upon Transfers of Oncor Units or equity
units of Oncor Holdings, (y) clause (i) above shall be deemed not to include any reference to Oncor
Holdings for purposes of interpreting the termination or applicability of any puts, calls or
release from transfer restrictions upon Transfers of Oncor Units and (z) clause (i) above shall be
deemed not to include any reference to Oncor for the purposes of interpreting the termination or
applicability of any puts, calls or release from transfer restrictions upon Transfer of equity
units of Oncor Holdings.



     “Company” shall have the meaning set forth in the introductory paragraph.



     “Competing Business” shall mean any business that directly or indirectly competes, at
the relevant determination date, with one or more of the businesses of EFH Corp., Oncor, an IPO
Vehicle or their respective Subsidiaries in any geographic area where EFH Corp., Oncor, an IPO
Vehicle or their respective Subsidiaries operates.



15









 





     “Confidential Information” shall mean all non-public information concerning trade
secret, know-how, software, developments, inventions, processes, technology, designs, the financial
data, strategic business plans or any proprietary or confidential information, documents or
materials in any form or media, including any of the foregoing relating to research, operations,
finances, current and proposed products and services, customers, advertising and marketing, and
other non-public, proprietary, and confidential information of the Restricted Group, excluding any
such non-public information that (i) is required by court or administrative order to be disclosed
or (ii) becomes generally available to the public other than as a result of a disclosure or failure
to safeguard in violation of Section 22.



     “Deferred Purchased Units” shall have the meaning set forth in the first recital.



     “Disability” shall mean “Disability” as such term is defined in any employment
agreement between the Management Stockholder and any Management Stockholder Employer, or, if there
is no such employment agreement, “Disability” as defined in the then current long-term disability
plan of EFH.



     “DLLCA” shall have the meaning set forth in Section 5(c) hereof.



     “Drag Transaction” shall have the meaning ascribed to such term in the Sale
Participation Agreement.



     “EFH Common Stock” means shares of the common stock of EFH Corp., no par value.



     “EFH Corp.” shall mean Energy Future Holding Corp., a Texas corporation.



     “EFH Drag-Along Purchaser” shall have the meaning set forth in Section 4(b) hereof.



     “EFH Drag Transaction” shall have the meaning set forth in Section 4(b) hereof.



     “EFH Management” shall have the meaning set forth in Section 4(a) hereof.



     “EFH Management Sale” shall have the meaning set forth in Section 4(a) hereof.



     “EFH Sale Percentage” shall have the meaning set forth in Section 4(a) hereof.



     “EFH Seller” shall have the meaning set forth in Section 9 hereof.



     “Event” shall have the meaning set forth in Section 5(c) hereof.



     “Exchange Act” shall mean the Securities Exchange Act of 1934, as amended (or any
successor section thereto).



     “Fair Market Value” means with respect to Management Units, the Fair Market Value of a
corresponding number of Oncor Units (or IPO Stock) on the date of determination as calculated
pursuant to the following provisions: (i) if there is a public market for Oncor Units (or IPO
Stock) on such date, the average of the high and low closing bid prices of the Oncor Units (or IPO
Stock), as applicable, on such stock exchange on which the units are principally trading on the
date in question, or, if there were no sales on such date, on the closest preceding date on which
there were sales of units or, (ii) if there is no public market for the Oncor Units (or IPO Stock),
on a per unit basis, the Fair Market Value of the Oncor



16









 







Units (or IPO Stock) on any given date, as determined reasonably and in good faith by the
board of directors of Oncor and which shall not take into account any minority interest discount
and shall not take into account a discount for illiquidity of equity units of Oncor Units (or IPO
Stock) or SARs, as applicable in excess of any illiquidity discount applicable to Oncor Units (or
IPO Stock) generally.



     “Good Reason” shall mean “Good Reason” as such term may be defined in any employment
agreement or change-in-control agreement in effect at the time of termination of employment between
the Management Stockholder and the Management Stockholder Employer or any of its Subsidiaries or
Affiliates, or, if there is no such employment or change-in-control agreement, “Good Reason” means,
with respect to a Management Stockholder: (i) a reduction in the Management Stockholder’s base
salary or the Management Stockholder’s annual incentive compensation opportunity (other than a
general reduction in base salary or annual incentive compensation opportunities that affects all
salaried employees of Oncor equally); (ii) a transfer of the Management Stockholder’s primary
workplace by more than thirty-five (35) miles from the current workplace; (iii) a substantial and
sustained adverse change in the Management Stockholder’s duties and responsibilities; or (iv) any
material breach by the Company or Oncor of this Agreement; provided, however, that
any isolated, insubstantial and inadvertent failure by the Company or Oncor that is not in bad
faith and is cured within ten (10) Business Days after the Management Stockholder gives the Company
or Oncor written notice of any such event set forth above, shall not constitute Good Reason.



     “IPO Stock” shall have the meaning set forth in Section 4(a) hereof.



     “IPO Vehicle” shall have the meaning set forth in Section 1(c) hereof.



     “Management Units” shall have the meaning set forth in the first recital.



     “Management Stockholder” shall have the meaning set forth in the introductory
paragraph.



     “Management Stockholder Employer” shall have the meaning set forth in Section 1(c).



     “Management Stockholder Entities” shall mean the Management Stockholder’s Trust, the
Management Stockholder and the Management Stockholder’s Estate, collectively.



     “Management Stockholder’s Estate” shall mean the conservators, guardians, executors,
administrators, testamentary trustees, legatees or beneficiaries of the Management Stockholder.



     “Management Stockholder’s Trust” shall mean a partnership, limited liability company,
corporation, trust, private foundation or custodianship, the beneficiaries of which may include
only the Management Stockholder, his or her spouse (or ex-spouse) or his or her lineal descendants
(including adopted) or, if at any time after any such Transfer there shall be no then living spouse
or lineal descendants, the ultimate beneficiaries of any such trust or to the estate of a deceased
beneficiary.



     “Managing Member” shall have the meaning set fourth in Section 1(a).



17









 





     “Minority Sale” shall have the meaning set fourth in Section 1(a).



     “Non-Compete Period” shall have the meaning set forth in Section 22(a)(ii) hereof.



     “Oncor” shall have the meaning set forth in the introductory paragraph.



     “Oncor Drag-Along Purchaser” shall have the meaning set forth in Section 4(e) hereof.



     “Oncor Drag Transaction” shall have the meaning set forth in Section 4(e) hereof.



     “Oncor Holdings” shall mean Oncor Electric Delivery Holdings Company LLC, a Delaware
limited liability company.



     “Oncor Management Investment LLC” shall have the meaning set forth in the introductory
paragraph.



     “Oncor Sale Percentage” shall have the meaning set forth in Section 4(d) hereof.



     “Oncor Units” shall have the meaning set forth in Section 2(a).



     “Parent” shall mean Texas Energy Future Holdings Limited Partnership, a Delaware
limited partnership.



     “Parties” shall have the meaning set forth in the introductory paragraph.



     “Permitted Transfer” shall have the meaning set forth in Section 3(a).



     “Person” shall mean “person,” as such term is used for purposes of Section 13(d) or
14(d) of the Exchange Act.



     “Program” shall have the meaning set forth in the first recital.



     “Public Offering” shall mean the sale of units or shares, as applicable, of Oncor, the
Company, an IPO Vehicle or EFH Corp. to the public subsequent to the date hereof pursuant to a
registration statement under the Act which has been declared effective by the SEC (other than a
registration statement on Form S-4, S-8 or any other similar form).



     “Purchased Units” shall have the meaning set forth in the first recital.



     “Qualified Public Offering” shall mean any firm underwritten public offering of shares
of stock or equity units of Oncor (or IPO Stock) or the Company (as applicable, the “Subject
Stock”) (or series of related offerings) pursuant to an effective registration statement under
the Act (other than a registration statement on Form S-4 or S-8 or any other similar form) pursuant
to which at least 25% of the outstanding shares or units of the Subject Stock are or have been sold
to the public.



     “Redemption Notice” shall have the meaning set forth in Section 5(b) hereof.



     “Redemption Period” shall have the meaning set forth in Section 5(a) hereof.



     “Registration Rights Agreement” shall have the meaning set forth in Section 9 hereof.



18









 





     “Related Entity” means Oncor Holdings or any current or future Affiliate of Oncor
Holdings which holds a direct equity interest in Oncor, other than Oncor Management Investment LLC.



     “Repurchase Calculation Date” shall mean (i) prior to the occurrence of a Public
Offering of the applicable security, the last day of the month preceding the month in which date of
repurchase occurs, and (ii) on and after the occurrence of a Public Offering of the applicable
security, last date of trading of the applicable Units immediately preceding the date of repurchase
on which there was a closing trading price for the applicable Units.



     “Repurchase Notice” shall have the meaning set forth in Section 6(c) hereof.



     “Repurchase Price” or “Redemption Price” shall mean the amount to be paid in
respect of the Units and Stock Appreciation Rights to be purchased by the Company, Oncor or an IPO
Vehicle pursuant to Section 5 and Section 6, as applicable.



     “Request” shall have the meaning set forth in Section 4(g) hereof.



     “Restricted Group” shall mean, collectively, EFH Corp. and any of its direct or
indirect Subsidiaries, the members of the Sponsor Group and their respective Affiliates.



     “Retirement” shall mean the Management Stockholder’s retirement at age 55 or over
after having been employed by EFH, Oncor, an IPO Vehicle, or any of their Subsidiaries for at least
ten (10) consecutive years (with at least five consecutive years of employment with Oncor following
October 10, 2007); provided that such ten (10) consecutive years may include years of service with
a service provider to any of the foregoing entities so long as substantially all of the Management
Stockholder’s work with such service provider related to such entity.



     “Sale Participation Agreement” shall mean that certain sale participation agreement
entered into by and between the Management Stockholder and Oncor Holdings, dated as of the date
hereof.



     “Section 6(a) Call Event” shall have the meaning set forth in Section 6(a) hereof.



     “Section 6(b) Call Event” shall have the meaning set forth in Section 6(b) hereof.



     “Section 6(b)(ii) Call Event” shall have the meaning set forth in Section 6(b) hereof.



     “SEC” shall mean the Securities and Exchange Commission.



     “Sponsor Group” shall investment funds affiliated with Kohlberg Kravis Roberts & Co.
L.P., TPG Capital, L.P. and Goldman, Sachs & Co.



     “Stock Appreciation Rights” shall have the meaning set forth in the first recital.



     “Stock Appreciation Rights Agreement” shall have the meaning set forth in the first
recital.



     “Stock Appreciation Rights Plan” shall have the meaning set forth in the first
recital.



19









 





     “Subject Stock” has the meaning set forth in the definition of Qualified Public
Offering.



     “Subsidiaries” shall mean, with respect to any Person, any corporation or other entity
in an unbroken chain of corporations or other entities beginning with such Person, if each of the
corporations or other entities, or group of commonly controlled corporations or other entities,
other than the last corporation or other entity in the unbroken chain then owns stock or other
stock interests possessing 50% or more of the total combined voting power of all classes of stock
or other stock interests in one of the other corporations or other entities in such chain.



     “Transfer” shall have the meaning set forth in Section 2(a) hereof.



     “Units” shall have the meaning set forth in Section 2(a) hereof.



          8. The Company’s and Oncor’s Representations and Warranties and Covenants.




          (a) Each of the Company and Oncor represent and warrant to the Management Stockholder that
this Agreement has been duly authorized, executed and delivered by each of the Company and Oncor,
respectively, and is enforceable against the Company and Oncor in accordance with its terms. Each
of the Company and Oncor, represents and warrants to the Management Stockholder that the applicable
Units issued by such entity, when issued and delivered in accordance with the terms hereof and the
other agreements contemplated hereby, will be duly and validly issued, fully paid and
nonassessable.




          (b) If the Company, Oncor or an IPO Vehicle becomes subject to the reporting requirements of
Section 12 of the Exchange Act, the Company, Oncor or such IPO Vehicle, as applicable, will file
the reports required to be filed by it under the Act and the Exchange Act and the rules and
regulations adopted by the SEC thereunder, to the extent required from time to time to enable the
Management Stockholder to sell the applicable Units, subject to compliance with the provisions
hereof (including requirements of the Company, Oncor or such IPO Vehicle) without registration
under the Exchange Act within the limitations of the exemptions provided by (A) Rule 144 under the
Act, as such Rule may be amended from time to time, or (B) any similar rule or regulation hereafter
adopted by the SEC. Notwithstanding anything contained in this Section 8(b), the Company, Oncor or
such IPO Vehicle may de-register under Section 12 of the Exchange Act if it is then permitted to do
so pursuant to the Exchange Act and the rules and regulations thereunder and, in such
circumstances, shall not be required hereby to file any reports which may be necessary in order for
Rule 144 or any similar rule or regulation under the Act to be available. Nothing in this Section
8(b) shall be deemed to limit in any manner the restrictions on Transfers of Units contained in
this Agreement.




          9. Registered Sales. After an initial Public Offering, in the event of a sale of
Units by EFH Corp. or any of its Subsidiaries (such Person(s), the “EFH Seller”) in a
Public Offering such that, if the applicable Units were EFH Common Stock and the Management
Stockholder were a party to the Registration Rights Agreement entered into by and among EFH Corp.
and the Sponsor Group members party thereto (the “Registration Rights Agreement”), the
Management Stockholder would be entitled to piggy-back




20









 




registration rights, then the Company and Oncor shall release, subject to applicable law, from
the transfer restrictions contained in Section 3(a) hereof a number of the applicable Units, held
by the Management Stockholder equal to the number of the applicable Units then held by the
Management Stockholder Entities, multiplied by a fraction, the numerator of which is the aggregate
number of the applicable Units being registered and sold in such Public Offering by the EFH Seller
and the denominator of which is the aggregate number of the applicable Units owned by EFH Corp. and
its Subsidiaries.




          10. Rights to Negotiate Repurchase Price. Nothing in this Agreement shall be deemed to
restrict or prohibit the Company, Oncor or an IPO Vehicle from purchasing, redeeming, repurchasing
or otherwise acquiring for value Units or Stock Appreciation Rights from the Management
Stockholder, at any time, upon such terms and conditions, and for such price, as may be mutually
agreed upon in writing between the Parties, whether or not at the time of such purchase,
redemption, repurchase or acquisition circumstances exist which specifically grant the Company,
Oncor or an IPO Vehicle the right to purchase, or the Management Stockholder the right to sell,
Units or any Stock Appreciation Rights under the terms of this Agreement.




          11. Notice of Change of Beneficiary. Immediately prior to any Transfer of Units to a
Management Stockholder’s Trust, the Management Stockholder shall provide the Company, Oncor and, if
applicable, any IPO Vehicle with a copy of the instruments creating the Management Stockholder’s
Trust and with the identity of the beneficiaries of the Management Stockholder’s Trust. The
Management Stockholder shall notify the Company, Oncor and, if applicable, any IPO Vehicle as soon
as practicable prior to any change in the identity of any beneficiary of the Management
Stockholder’s Trust.




          12. Recapitalizations, etc. The provisions of this Agreement shall apply, to the full
extent set forth herein with respect to the Units or the Stock Appreciation Rights, to any and all
units or shares of capital stock of the Company, Oncor and any IPO Vehicle or any capital stock,
partnership units or any other security evidencing ownership interests in any successor or assign
of the Company, Oncor or any IPO Vehicle (whether by merger, consolidation, sale of assets or
otherwise) which may be issued in respect of, in exchange for, or substitution of the Units or the
Stock Appreciation Rights by reason of any dividend, split, reverse split, combination,
recapitalization, liquidation, reclassification, merger, consolidation or otherwise.




          13. Management Stockholder’s Employment by Oncor. Nothing contained in this Agreement
(a) obligates the Company, Oncor, any other Management Stockholder Employer or any of their
respective Affiliates to employ the Management Stockholder in any capacity whatsoever or (b)
prohibits or restricts Oncor or any other Management Stockholder Employer or any of their
respective Affiliates from terminating the employment of the Management Stockholder at any time or
for any reason whatsoever, with or without Cause, and the Management Stockholder hereby
acknowledges and agrees that none of the Company, Oncor, any other Management Stockholder Employer
or any other person has made any representations or promises whatsoever to the Management
Stockholder concerning the Management Stockholder’s employment or continued employment by the
Company, Oncor, any other Management Stockholder Employer or any of their respective Affiliates.




          14. Binding Effect. The provisions of this Agreement shall be binding upon and accrue
to the benefit of the Parties hereto and their respective heirs, legal




21









 




representatives, successors and assigns. In the case of a transferee permitted under clauses
(2), (3) or (4) of Section 2(a) or clauses (ii) and (v) of Section 3(a) hereof, such transferee
shall be deemed the Management Stockholder hereunder; provided, however, that no
transferee (including without limitation, transferees referred to in Section 2(a) or Section 3(a)
hereof) shall derive any rights under this Agreement unless and until such transferee has delivered
to the Company, Oncor or any applicable IPO Vehicle a valid undertaking and becomes bound by the
terms of this Agreement. No provision of this Agreement is intended to or shall confer upon any
Person other than the Parties any rights or remedies hereunder or with respect hereto.




          15. Amendment. This Agreement may be amended by the Company, Oncor or any applicable
IPO Vehicle at any time; provided that any amendment (i) that materially disadvantages the
Management Stockholder shall not be effective unless and until the Management Stockholder has
consented thereto in writing and (ii) that disadvantages the Management Stockholders in more than a
de minimis way but less than a material way shall require the consent of Management Stockholders
holding a majority of the equity interests held by the Management Stockholders; and
provided further that no amendment shall be effective without the consent of Oncor
Holdings.




          16. Closing. Except as otherwise provided herein, the closing of each purchase and
sale of Units or redemption of Stock Appreciation Rights pursuant to this Agreement shall take
place at the principal office of the Company, Oncor or any applicable IPO Vehicle, as applicable on
the tenth Business Day following delivery of the notice by any Party to the another of its exercise
of the right to purchase or sell such Units or redeem such Stock Appreciation Rights hereunder;
provided that, notwithstanding anything to the contrary contained herein, payment with
respect to any Transfer of Units by the Company shall in no event be due earlier than on or about
the second business day after the date of payment of the next regular quarterly dividend paid by
Oncor following the date of Transfer.




          17. Applicable Law; Jurisdiction; Arbitration; Legal Fees.




          (a) The laws of the State of Texas applicable to contracts executed and to be performed
entirely in such state shall govern the interpretation, validity and performance of the terms of
this Agreement.




          (b) In the event of any controversy among the parties hereto arising out of, or relating to,
this Agreement which cannot be settled amicably by the parties, such controversy shall be finally,
exclusively and conclusively settled by mandatory arbitration conducted expeditiously in accordance
with the American Arbitration Association rules by a single independent arbitrator. Such
arbitration process shall take place in Dallas, Texas. The decision of the arbitrator shall be
final and binding upon all parties hereto and shall be rendered pursuant to a written decision,
which contains a detailed recital of the arbitrator’s reasoning. Judgment upon the award rendered
may be entered in any court having jurisdiction thereof.




          (c) Notwithstanding the foregoing, the Management Stockholder acknowledges and agrees that the
Company, Oncor, any IPO Vehicle any Management Stockholder Employer, their Subsidiaries, the
Sponsor Group and any of their respective Affiliates shall be entitled to injunctive or other
relief in order to enforce the covenant not to compete, covenant not to solicit and/or
confidentiality covenants as set forth in Section 22(a)




22









 




of this Agreement.




          (d) In the event of any arbitration or other disputes with regard to this Agreement or any
other document or agreement referred to herein, each Party shall pay its own legal fees and
expenses, unless otherwise determined by the arbitrator.




          18. Assignability of Certain Rights by the Company and Oncor. The Company, Oncor or
any IPO Vehicle shall have the right to assign any or all of its rights or obligations to purchase,
repurchase Units or redeem Stock Appreciation Rights pursuant to Sections 4, 5 and 6 hereof;
provided, however, that no such assignment shall relieve the Company, Oncor or such
IPO Vehicle from its obligations thereunder.




          19. Miscellaneous.




          (a) In this Agreement all references to “dollars” or “$” are to United States dollars and the
masculine pronoun shall include the feminine and neuter, and the singular the plural, where the
context so indicates.




          (b) If any provision of this Agreement shall be declared illegal, void or unenforceable by any
court of competent jurisdiction, the other provisions shall not be affected, but shall remain in
full force and effect.




          20. Withholding.




          (a) The Company, Oncor, any IPO Vehicle and their respective Subsidiaries shall each have the
right to deduct from any cash payment made under this Agreement to the applicable Management
Stockholder Entities any federal, state or local income or other taxes required by law to be
withheld with respect to such payment, if applicable.




          (b) To the extent permitted under applicable tax laws, each of the Company, Oncor and any IPO
Vehicle will dividend or distribute to the Management Stockholder a cash dividend equivalent
payment sufficient to satisfy any minimum withholding taxes associated with Management
Stockholder’s Units. For Stock Appreciation Rights for which the actual equity value has exceeded
the Base Price after taking into account dividends, the payment of these dividends will occur on
the earlier of a distribution event as set forth in Section 409A of the Code or the exercise of the
Stock Appreciation Right.




          21. Notices. All notices and other communications provided for herein shall be in
writing. Any notice or other communication hereunder shall be deemed duly given (i) upon
electronic confirmation of facsimile, (ii) one Business Day following the date sent when sent by
overnight delivery and (iii) five (5) Business Days following the date mailed when mailed by
registered or certified mail return receipt requested and postage prepaid, in each case as follows:




          (a) If to the Company or Oncor, to it at the following address:



Oncor Electric Delivery Company LLC

Oncor Management Investment LLC




23









 







c/o Oncor Electric Delivery Company LLC

Energy Plaza

1601 Bryan Street

Dallas, Texas 75201-3411

Facsimile:     (214) 486-2067

Attention:     Legal Department, 22nd Floor



with a copy to:



Baker & McKenzie LLP

One Prudential Plaza

130 East Randolph Drive

Chicago, Illinois 60601

Facsimile:     (312) 861-7588

Attention:     James P. O’Brien



and



Simpson Thacher & Bartlett LLP

425 Lexington Avenue

New York, New York 10017

Attention: Alvin H. Brown, Esq.

                 Andrew W. Smith, Esq.



Facsimile: (212) 455-2502




          (b) If to the Management Stockholder, to the Management Stockholder at the address set forth
below under the Management Stockholder’s signature; or at such other address as either party shall
have specified by notice in writing to the other.




          22. Confidential Information; Covenant Not to Compete; Covenant Not to Solicit.




          (a) In consideration of the Company and Oncor entering into this Agreement with the Management
Stockholder and hereby promising and committing themselves to provide the Management Stockholder
with Confidential Information and/or specialized training after the Management Stockholder executes
this Agreement, unless there exists any covenant that pertains to the same subject matter as set
forth in this Section 22 in any employment agreement or change in control agreement in effect at
the time of termination of employment between the Management Stockholder and the Management
Stockholder Employer or its Affiliates in which case such covenants shall supersede the covenants
contained in this Section 22; then the Management Stockholder shall be subject to the covenants
contained in this Section 22. Subject to the preceding sentence, the Management Stockholder shall
not, directly or indirectly:





     (i) at any time during or after the Management Stockholder’s employment with the
Management Stockholder Employer, disclose any Confidential Information pertaining to the
business of the Company, Oncor, any IPO Vehicle, any other Management Stockholder Employer
or any of their Subsidiaries or the Sponsor Group



24









 






or any of their respective Affiliates, except when required to perform his or her
duties to the Management Stockholder Employer, by law or judicial process;




     (ii) at any time during the Management Stockholder’s employment with the Management
Stockholder Employer and for a period of twelve (12) months thereafter (the
“Non-Compete Period”), directly or indirectly, act as a proprietor, investor,
director, officer, employee, substantial stockholder, consultant, or partner in any
Competing Business in Texas or any other geographic area in which EFH Corp., Oncor
Holdings, Oncor, any IPO Vehicle or any of their Subsidiaries operates or conducts
business; or




     (iii) at any time during the Management Stockholder’s employment with the Management
Stockholder Employer and for a period of twelve (12) months thereafter, directly or
indirectly (A) solicit customers or clients of EFH Corp., Oncor, any IPO Vehicle or any of
their Subsidiaries to terminate their relationship with EFH Corp., Oncor, any IPO Vehicle
or any of their Subsidiaries or otherwise solicit such customers or clients to compete with
any businesses of EFH Corp., Oncor, any IPO Vehicle or any of their Subsidiaries, or (B)
solicit or offer employment to any person who is, or has been at any time during the twelve
(12) months immediately preceding the termination of the Management Stockholder’s
employment employed by EFH Corp., Oncor, any IPO Vehicle or any of their Subsidiaries;


provided that in each of (ii) and (iii) above, such restrictions shall not apply with
respect to any member of the Sponsor Group or any of its Affiliates that is not engaged in any
business that competes, directly or indirectly, with EFH Corp., Oncor, any IPO Vehicle or any of
their Subsidiaries. If the Management Stockholder is bound by any other agreement with EFH Corp.,
Oncor, any IPO Vehicle, the Company or any of their respective Subsidiaries regarding the use or
disclosure of Confidential Information, the provisions of this Agreement shall be read in such a
way as to further restrict and not to permit any more extensive use or disclosure of Confidential
Information. Notwithstanding the foregoing, for the purposes of Section 22(a)(ii), (A) the
Management Stockholder may, directly or indirectly own, solely as an investment, securities of any
Person engaged in the business of EFH Corp., Oncor, any IPO Vehicle, the Company or any of their
respective Subsidiaries or their respective Affiliates which are publicly traded on a national or
regional stock exchange or quotation system or on the over-the-counter market if the Management
Stockholder (I) is not a controlling person of, or a member of a group which controls, such person
and (II) does not, directly or indirectly, own 5% or more of any class of securities of such Person
(B) the Non-Compete Period shall not be triggered by any exercise of tag-along rights under the
Sale Participation Agreement, Drag Transaction, EFH Drag Transaction, Oncor Drag Transaction, or
transaction pursuant to Section 4(b) or 4(e) that may occur after the date hereof.




          (b) Notwithstanding clause (a) above, if at any time a court holds that the restrictions
stated in such clause (a) are unreasonable or otherwise unenforceable under circumstances then
existing, the parties hereto agree that the maximum period, scope or geographic area determined to
be reasonable under such circumstances by such court will be substituted for the stated period,
scope or area. Because the Management Stockholder’s services are unique and because the Management
Stockholder has had access to Confidential




25









 




Information, the parties hereto agree that money damages will be an inadequate remedy for any
breach of this Agreement (except with respect to any violation of provisions of Section 22(a)(ii)).
In the event of a breach or threatened breach of this Agreement, the Company or its successors or
assigns may, in addition to other rights and remedies existing in their favor, apply to any court
of competent jurisdiction for specific performance and/or injunctive relief in order to enforce, or
prevent any violations of, the provisions hereof (without the posting of a bond or other security).




          (c) In the event that the Management Stockholder engages in activity giving rise to a Section
6(b)(ii) Call Event or breaches any of the provisions of Sections 22(a)(ii) or 22(a)(iii), the
Management Stockholder shall be required to pay to the Company, Oncor or the IPO Vehicle any
amounts actually paid (including any dividends) to him or her or otherwise received in respect of
any repurchase or disposition of any Stock Appreciation Rights, Management Units, Oncor Units or
IPO Stock held by such Management Stockholder; provided that, in the event the Management
Stockholder engages in activity giving rise to a Section 6(b)(ii) Call Event (to the extent the
provisions of Section 6(b)(iv) are applicable) or breaches any of the provisions of Section
22(a)(ii), the provisions of this Section 22(c) shall be the Company’s, Oncor’s and/or the IPO
Vehicle’s sole remedy.




          23. Voting. The Management Stockholder acknowledges that the Managing Member, on
behalf of the Company, shall have the exclusive right to vote (or cause to vote) or execute (or
cause to execute) consents with respect to Management Units and the Oncor Units held by the
Company, directly or indirectly, on any matter to be voted upon at any meeting of the holders of
Oncor Units, or in connection with any proposed action by written consent of the holders of Oncor
Units; provided that, with respect to votes or executions of consents attributed to Oncor
Units held by the Company, each Management Stockholder shall have the right to direct the Managing
Member to vote (or cause to vote) or execute (or cause to execute) consents attributable to Oncor
Units equal to the total Oncor Units held by the Company multiplied by a percentage calculated by
dividing (x) the aggregate number of Management Units held by such Management Stockholder by (y)
the aggregate number of Management Units issued and outstanding on such date if such Management
Stockholder provides the Managing Member a written indication of such direction no less than 10
Business Days prior to such vote or execution, unless some lesser time period is consented to by
the Managing Member; provided further that, the forgoing proviso shall not apply to
any vote at a regular or special meeting of the members of Oncor for the express purpose of
approving any Change in Control transaction or agreement and subject to, and to the extent
permitted, by the laws of the State of Texas, each Management Stockholder hereby irrevocably
appoints Oncor Holdings and any authorized representatives and designees thereof as its lawful
proxy and attorney-in-fact to exercise with full power in such Management Stockholder’s name and on
its behalf any right that Management Stockholder has to vote on such matter in respect of its
indirect interest in Oncor through its Management Units and in respect of any other Oncor Units
that it directly holds. If voting under any such proxy, Oncor Holdings, and any authorized
representatives and designees thereof, shall vote under such proxy on behalf of each such
Management Stockholder in the same manner as Oncor Holdings votes any outstanding membership
interests in Oncor owned by it at any such regular or special meeting of the stockholders of Oncor
for the express purpose of approving any Change in Control transaction or agreement. This proxy
is irrevocable and is coupled with an interest and shall not be terminable as long as this
Agreement remains effective among the parties hereto, their successors, transferees and assigns




26









 




and, if such Management Stockholder is a natural person, shall not terminate on the disability
or incompetence of such Management Stockholder. Oncor is hereby requested and directed to honor
this proxy upon its presentation by Oncor Holdings and any authorized representatives and designees
thereof, without any duty of investigation whatsoever on the part of Oncor. Each such Management
Stockholder agrees that Oncor, and Oncor’s secretary shall not be liable to such Management
Stockholder for so honoring this proxy. This Section 23 shall terminate and be of no further force
or effect upon the later of (x) October 10, 2012 or (y) the consummation of a Qualified Public
Offering of Oncor.




          24. IPO Exchange. At any time after the date hereof, in connection with a Public
Offering of an IPO Vehicle, Oncor may determine that it is in the best interests of Oncor to
exchange any Oncor Units held by the Company and the Management Stockholder for IPO Stock. In such
event, the Management Stockholder agrees to exchange any Oncor Units held by it for IPO Stock;
provided that, the rights attaching to such IPO Stock shall be substantially equivalent to the
rights that attached to the Oncor Units previously held by such Management Stockholder.




          25. Liability. Notwithstanding anything contained herein or otherwise, EFH Corp.,
Oncor Holdings and Parent are not parties to this agreement and shall bear no liability, nor make
any representations and warranties herein.




          26. Final Agreement. This agreement constitutes the final agreement between the
parties with respect to the matters contained herein and amends, restates and supercedes any and
all prior written or oral management stockholder agreements.




[Signatures on next page.]





27











 






     IN WITNESS WHEREOF, the
Parties have executed this Agreement as of           
          , 2009, to be
effective as of November 5, 2008.



	 	 	 	 	 	 	 
	 	 	ONCOR ELECTRIC DELIVERY COMPANY LLC	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	 	 	 

	 	 
	 

	 	Name:	 	 	 	 
	 

	 	 	 	 

	 	 
	 

	 	Title:	 	 	 	 
	 

	 	 	 	 

	 	 
	 
	 	 	 	 	 	 
	 	 	ONCOR MANAGEMENT INVESTMENT LLC	 	 
	 
	 	 	 	 	 	 
	 	 	By: Oncor Electric Delivery Company LLC, its managing member	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	 	 	 

	 	 
	 

	 	Name:	 	 	 	 
	 

	 	 	 	 

	 	 
	 

	 	Title:	 	 	 	 
	 

	 	 	 	 

	 	 






 









 






	 	 	 	 	 	 	 
	 	 	MANAGEMENT STOCKHOLDER:	 	 
	 
	 	 	 	 	 	 
	 	 	 	 	 
	 
	 	 	 	 	 	 
	 

	 	Name:	 	 	 	 
	 

	 	 	 	 

	 	 
	 
	 	 	 	 	 	 
	 	 	ADDRESS:	 	 
	 
	 	 	 	 	 	 
	 	 	 	 	 
	 
	 	 	 	 	 	 
	 	 	 	 	 
	 
	 	 	 	 	 	 
	 	 	o The above-signed represents that he/she is
an “accredited investor” as defined in Rule 501(a) of
Regulation D, as amended, under the Act (the number
of Purchased Units available to be acquired by
Management Stockholders who are not accredited
Investors may be limited and accordingly Purchased
Units offered to those Management Stockholders may be
subject to mandatory cutbacks and reduction).	 	 






29









 





Schedule I





Purchased Units



Number of Purchased Units (up to ___) (to be purchased at the Base Price):                     




Base Price: $10.00





30