Document:

EXHIBIT 10.22

                              TERMINATION AGREEMENT

     This Termination Agreement (this "Agreement") is entered into as of this
_____ day of April, 2006, by and between Moore, Clayton & Co., Inc., a Delaware
corporation, MCC Healthcare Group, Inc., a Delaware corporation (collectively
"MCC") and Bridgetech Holdings International, Inc., Delaware corporation
("Bridgetech"), collectively referred to hereinafter as the "Parties" or
individually as a "Party."

                                 R E C I T A L S

     WHEREAS, the Parties hereto desire to fully and finally terminate any and
all claims which may exist between them in connection with that certain
Subscription Agreement entered into by the Parties and accepted by Bridgetech on
or about October 19, 2005 in which MCC agreed to subscribe for 1.5 million
shares of Bridgetech common stock at a price of $1.00 per share (the
"Subscription Agreement", attached hereto as Exhibit A).

     NOW, THEREFORE, in consideration of the mutual covenants and agreements set
forth herein, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the Parties hereto agree as
follows:

     1.     Acknowledgement and Acceptance of Substitute. Bridgetech hereby
            --------------------------------------------
acknowledges that MCC has sufficiently provided for substitute investors who
have subscribed in an amount equal to or greater than that required pursuant to
the Subscription Agreement, and accepts such subscriptions in aggregate as a
full and complete substitute for the MCC obligation under the Subscription
Agreement.

     2.     Acknowledgement of Receipt of Investment. Bridgetech hereby
            ----------------------------------------
acknowledges that it has received funds from the substitute investors in an
amount equal to or greater than that required pursuant to the Subscription
Agreement.

     3.     Termination of Subscription Agreement. The Parties agree to
            -------------------------------------
terminate the Subscription Agreement and any obligations, rights, or any other
similar interest each may have with respect to the other arising from the
Subscription Agreement.

     4.     Release of Claims. In consideration of the mutual releases made
            -----------------
pursuant to this Agreement, the Parties, on behalf of themselves and their
agents, personal representatives, and assigns, past, present, and future, hereby
releases and forever discharges the other Party, any parent organization of the
other Party, any organization that controls, is controlled by, or is under
common control with the other Party, and each of their respective partners,
affiliates, associates, officers, directors, shareholders, managers, members,
employees, attorneys, accountants, insurers, agents, representatives,
predecessors, successors, and assigns, past, present, and future (collectively,
"Affiliates"), from any and all legal claims, demands, liens, agreements,
contracts, covenants, actions, suits, causes of action, obligations,
controversies, debts, costs, expenses, damages, judgments, orders, and
liabilities of whatever kind or nature in law, equity, or otherwise, whether now
known or unknown, suspected or unsuspected, concealed or hidden, of any kind or
nature whatsoever, which have ever existed or may have existed, or which do
exist or which hereafter can, shall, or may exist arising out of the
Subscription Agreement, occurring or existing at any time. Nothing in this
section shall release parties from obligations arising from other agreements
between the parties, including without limitation any strategic alliance
agreements, joint venture agreements, or engagement agreements.

                                        1
<PAGE>
     5.     Further Assurances. The Parties intend this Agreement to be a
            ------------------
complete and final settlement of the matters between them related to the
Subscription Agreement. Accordingly , each Party agrees to execute such further
documents and to take such further actions as may be necessary or desirable to
finally and fully settle all such matters which have arisen or which may
subsequently arise between them.

     6.     Successors and Assigns. This Agreement shall be binding on and shall
            ----------------------
inure to the benefit of the parties and their respective heirs, personal
representatives, successors, and assigns.

     7.     Amendments and Waivers. No amendment or waiver of any provision of
            ----------------------
this Agreement shall be effective unless it is in writing and is signed by every
one of the parties hereto.

     8.     Notices. Any notice required hereunder to be given by either Party
            -------
shall be in writing and shall be delivered personally or sent by certified or
registered mail, postage prepaid, or by private courier, with written
verification of delivery, or by facsimile transmission to the other Party to the
address or telephone number set forth below or to such other address or
telephone number as either Party may designate from time to time according to
this provision. A notice delivered personally shall be effective upon receipt. A
notice sent by facsimile transmission shall be effective twenty-four hours after
the dispatch thereof. A notice delivered by mail or by private courier shall be
effective on the third day after the day of mailing.

     To Bridgetech at:                  To MCC at:

777 S. Highway 101, Ste. 215            10757 South River Front Parkway
Ste. 215                                Ste. 125
Solana Beach, California 92075          South Jordan, Utah 84095
Attention: Thomas C. Kuhn III           Attention: Kenneth I. Denos
Telefax: +1 (619) 342-7497              Telefax: +1(801) 816-2599

     9.     Equitable Remedies. Each Party acknowledges and agrees that the
            ------------------
breach or threatened breach of certain provisions of this Agreement would cause
irreparable harm for which damages at law would be an inadequate remedy.
Accordingly, each Party hereby agrees that, in any such instance, the threatened
or injured Party shall be entitled to seek injunctive or other equitable relief
in addition to any other remedy to which he or it may be entitled, including
money damages.

     10.     Severability. If any provision of this Agreement is found to be
             ------------
unenforceable by a court of competent jurisdiction, the remaining provisions
shall nevertheless remain in full force and effect.

     11.     Entire Agreement. This Agreement constitutes the full and complete
             ----------------
understanding of the Parties hereto with respect to the subject matter covered
herein and supersedes all prior oral or written understandings and agreements
with respect thereto. No modification or amendment to this Agreement shall be
effective unless it is contained in a written document that is signed by both
Parties.

     12.     Governing Law. This Agreement shall be governed and construed in
             -------------
accordance with the laws of the State of Delaware. The Parties further agree
that proper venue and

                                        2
<PAGE>
jurisdiction for any dispute under this Agreement shall lie with the courts in
Los Angeles County, California.

     IN WITNESS WHEREOF, the Parties hereto have signed this Agreement by their
duly authorized representative as of the date first given above. This Agreement
may be executed in counterparts, all of which together shall constitute one and
the same instrument.

MOORE, CLAYTON & CO., INC.               BRIDGETECH HOLDINGS INTERNATIONAL, INC.

-----------------------------------          -----------------------------------
Kenneth Denos, Executive VP                  Thomas C. Kuhn III, SVP & CFO

MCC HEALTHCARE GROUP, INC.

-----------------------------------
Kenneth Denos, Director

                                        3
<PAGE>
                                    EXHIBIT A

                                        4
<PAGE>
                             SUBSCRIPTION AGREEMENT

                                       FOR

                             SHARES OF COMMON STOCK

                                       OF

                     BRIDGETECH HOLDINGS INTERNATIONAL, INC.

To:   Bridgetech Holdings International, Inc.

From: MOORE, CLAYTON & CO INC.
      -------------------------
      (Full name of Subscriber)

<TABLE>
<CAPTION>
<S>                                                          <C>
Number of shares of Common Stock subscribed:                 $1,500,000
                                                             ----------
Price per share of Common Stock:                             $     1.00
                                                             ----------

Total purchase price for shares of Common Stock subscribed:  $1,500,000
                                                             ----------
</TABLE>

<PAGE>
                             SUBSCRIPTION AGREEMENT

     The undersigned subscriber ("Subscriber") hereby irrevocably subscribes for
                                  ----------
the  number  of shares of Common Stock, par value $.001 per share (the "Stock"),
                                                                        -----
of  Bridgetech  Holdings  International, Inc., a corporation organized under the
laws  of  the  State of Delaware (the "Company"), set forth in Section 1 below.
                                       -------

Section I.   Commitment.
             ----------

     Subscriber  hereby  irrevocably  subscribes  for  and  agrees  to  purchase
1,500,000  shares  of  Stock  (the "Subscribed Shares") at the purchase price of
---------                           -----------------
$1.00  per  share  for an aggregate purchase price of $1,500,000  (the "Purchase
                                                       ---------        --------
Price").  Subscriber  understands  that  the  Company  is under no obligation to
-----
consummate  the  sale  of the Stock and may reject this subscription in its sole
discretion.

Section 2.   Payment of the Purchase Price and Delivery of the Subscribed
             ------------------------------------------------------------
             Shares.
             ------

     On  or  before  October 15, 2005 (the "Closing Date"), Subscriber shall pay
                                            ------------
the  Purchase  Price  to  the  Company  by check payable to "Bridgetech Holdings
International,  Inc."  or by wire transfer of immediately available funds to the
account  identified  on  Schedule  A hereto. If the Company accepts Subscriber's
                         -----------
subscription,  then,  on  the  Closing  Date or promptly thereafter, the Company
shall  deliver  to  Subscriber  a  certificate  for  the  Subscribed  Shares.

     Section 3.    Representations, Warranties and Covenants of Subscriber.
                   -------------------------------------------------------

     In  order  to  induce the Company to accept this subscription and issue the
Subscribed  Shares  to  Subscriber,  Subscriber  hereby  warrants,  represents,
covenants  and  agrees  as  follows:

          (a)     Subscriber  acknowledges  that  the  Company  has  provided
     Subscriber  with  copies  of  certain  documents,  books and records of the
     Company.  Subscriber  and its advisors have had a reasonable opportunity to
     ask questions of and receive answers from the officers of the Company, or a
     person  or  persons  acting on their behalf, concerning the Company and the
     terms and conditions of the offering of the Stock, and to obtain additional
     information  necessary  to  verify the accuracy of the information provided
     by,  or on behalf of, the Company. All such questions have been answered to
     the  full  satisfaction  of  Subscriber. Subscriber represents and warrants
     that,  in  making the decision to purchase the Stock, Subscriber has relied
     and  is  relying solely on its review of the materials provided and its own
     independent  investigation  of  the  Company.

          (b)     Subscriber  has such knowledge and experience in financial and
     business  matters  as  to  enable  it  (i)  to utilize the information made
     available  to  it  in  connection  with  the offering of the Stock, (ii) to
     evaluate  the merits and risks associated with a purchase of the Stock, and
     (iii)  to  make  an  informed  decision  with  respect  thereto.

<PAGE>
          (c)     Subscriber is a qualified purchaser of shares of Stock because
     Subscriber  is  an  "accredited  investor"  under  Regulation D promulgated
     under  the  Securities  Act  of  1933,  as  amended  (the  "Act").
                                                                 ---

          (d)     Subscriber (i) has adequate means of providing for its current
     liabilities  and  possible  contingencies,  (ii)  has no need for liquidity
     in  connection  with  a  purchase  of  the Stock, (iii) is able to bear the
     economic  risks associated with the purchase of the Stock for an indefinite
     period and has the capacity to protect its own interests in connection with
     a  purchase  of  the  Stock,  and  (iv) can afford the complete loss of its
     entire  investment  in  the  Stock.

          (e)     Subscriber  recognizes  that  a purchase of fee Stock involves
     significant  risks,  including,  without  limitation,  those  described  or
     Schedule  B  hereto.  Subscriber  acknowledges  that  an  investment in the
     -----------
     Company  is  speculative  and may result in the loss of Subscriber's entire
     investment.

          (f)     Subscriber  understands  that (i) neither the offering nor the
     sale  of  the  Stock  has  been  registered  under the Act in reliance upon
     exemptions from the registration provisions of the Act, (ii) the Subscribed
     Shares  must be held by Subscriber indefinitely unless the sale or transfer
     thereof  (A)  is subsequently registered under the Act, or (B) an exemption
     from  such  registration  is available, (iii) the certificates representing
     all shares of Stock will be legended to reflect such restrictions, (iv) the
     Company  is  under  no  obligation  to  register  any  shares  of  Stock on
     Subscriber's behalf or to assist Subscriber in complying with any exemption
     from  registration,  and (v) the officers of the Company will rely upon the
     representations  and  warranties  made  by  Subscriber in this Subscription
     Agreement  in  order  to  establish  such  exemption  from the registration
     provisions  of  the  Act.

               (g)     Subscriber  understands  that  neither  the offer nor the
     sale  of  the  Stock  has  been registered under the securities laws of any
     state due to exemptions from registration based upon the private or limited
     nature  of  the  offering  and/or  exemptions  available  for  transactions
     involving  purchasers  such  as  Subscriber,  and  that the officers of the
     Company  will  rely  upon  the  representations  and  warranties  made  by
     Subscriber in this Subscription Agreement and in the Investor Questionnaire
     in  order  to  establish  such  exemptions  from  registration  under state
     securities  laws.

          (h)     Subscriber  acknowledges  and  agrees  that  it  will not sell
     assign,  pledge,  hypothecate,  transfer,  or  otherwise  dispose  of  the
     Stock  unless  (i)  such  disposition  is subsequently registered under the
     Securities  Act,  which  is  not  contemplated,  and  registered  under all
     applicable  state  laws  and regulations, which is not contemplated or (ii)
     Subscriber provides the Company with a legal opinion acceptable in form and
     substance  (as to both such opinion and the counsel providing such opinion)
     to  the  Company  and  the  Company's  legal  counsel  stating  that  such
     disposition  may  be made without registration under the Securities Act and
     without  registration  under  any  applicable  state  laws and regulations.
     Subscriber  understands  that  transfer  instructions  have been or will be
     placed  on  certificate(s)  with  respect to the Subscribed Shares so as to

                                        2
<PAGE>
     restrict  any  such  disposition  thereof. Further, Subscriber acknowledges
     that the Company is under no obligation to register the Stock on its behalf
     or  to  assist  it  in  complying  with  any  exemption  from registration.

          (i)     The  Subscribed  Shares  are being purchased with Subscriber's
     own  funds  and  not  with  the  funds  of  any  other person and are being
     purchased  solely  for  Subscriber's own account and not for the account of
     any  other person. The Subscribed Shares are being purchased for investment
     purposes  only,  and  not for distribution, assignment or resale to others.

          (j)     Subscriber realizes that it may not be able to sell or dispose
     of  its  shares  of  Stock,  even  in the case of an emergency, as there is
     no public market for such shares. Subscriber acknowledges that it will bear
     the  economic  risk  associated  with the Stock for an indefinite period of
     time.

          (k)     Subscriber  understands  that  no  federal  or state agency or
     securities  exchange  has  recommended  or  endorsed the purchase of shares
     of  Stock.

          (1)     Subscriber  acknowledges  that  neither  the  Company, nor any
     person  acting  on  the  Company's  behalf,  has  offered to sell shares of
     Stock  by  means  of  any  form  of  advertising. At no time was Subscriber
     presented with or solicited by any leaflet, promotional meeting, newspaper,
     magazine,  radio  or  television  program, article or advertisement, or any
     other  form  of  general  advertising  or  general  solicitation.

          (m)     The  Subscriber  has  consulted  with  Subscriber's own legal,
     accounting,  tax,  investment  and  other  advisors with respect to the tax
     treatment  of  an  investment by Subscriber in the Stock and in the Company
     and  the merits and risks of an investment in the Stock and in the Company.

          (n)     The  Subscribed  Shares  and  any  certificates  issued  in
     replacement  therefore  shall  bear  the  following  legend, in addition to
     any  other  legend  required  by  law  or otherwise deemed advisable by the
     Company;

          The  sale  of  shares  represented  by  this  certificate has not been
          registered  under  the  Securities  Act  of  1933  (the  "Act") or any
                                                                    ---
          applicable  state  securities  laws (the "State Acts") and such shares
                                                    ----------
          may  not  be  sold,  transferred  or  otherwise  disposed  of unless a
          registration  statement  under the Act and the State Acts with respect
          to  such shares is effective at such time or unless the Corporation is
          in  receipt  of an opinion of counsel satisfactory to it to the effect
          that  such  shares  may be sold without registration under the Act and
          the  State  Acts.

          (o)     Subscriber  has kept and will continue to keep all information
     disclosed  in  connection  with  the  offering  of  the  Stock  in  strict
     confidence,  and Subscriber agrees only to disclose such information to its
     accountants,  attorneys  or  other  professional  advisors  to  the  extent
     necessary  to  evaluate  the  investment in the Stock. The same standard of
     confidentiality  is expected from all such accountants, attorneys and other
     professional  advisors  who  have  received  such  information.

                                        3
<PAGE>
          (p)     Subscriber is either: (i) an individual over the age of 21 (or
     the  age  of  majority  in  the  Subscriber's  jurisdiction) and a resident
     at  the  address set forth on the signature page to this Agreement, and has
     no  present intent of changing such residency, or (ii) an entity not formed
     for  the  specific  purpose  of  acquiring  or  holding the Stock, with its
     principal  place of business at the address set forth on the signature page
     to  this  Agreement. In  the event that Subscriber's residence or principal
     place of business changes before Subscriber purchases said Stock and before
     the  Stock  are delivered to Subscriber, Subscriber covenants and agrees to
     promptly  notify  the  Company.

          (q)     When  executed  by  Subscriber,  this  Subscription  Agreement
     (including  these  representations  and warranties) will constitute a valid
     and  binding  obligation  of Subscriber, enforceable in accordance with its
     terms.  Subscriber,  if not an individual, is empowered and duly authorized
     to  enter  into  this Subscription Agreement under any governing documents,
     partnership  agreements,  operating  agreements, trust instruments, pension
     plans, charter, certificate of incorporation, bylaw provisions or the like.
     The  person,  if  any,  signing  this  Subscription  Agreement on behalf of
     Subscriber  is  empowered  and  duly  authorized  to  do so by Subscriber's
     governing  document  or  trust  instrument,  charter,  certificate  of
     incorporation,  bylaw  provision,  board  of  directors  or  shareholder
     resolution,  or  the  like.

          (r)     Subscriber  understands  and  agrees that the subscription set
     forth  herein  will  not  be  binding upon the Company until it is accepted
     by  the  Company in writing, that acceptance of any or all subscriptions is
     within the sole discretion, of the Company, and that the Company may choose
     to  accept  or  reject  any  or  all  subscriptions,  in  whole or in part,
     including  this  subscription,  for  any  reason  or no reason, in its sole
     discretion.

          (s)     The  foregoing  representations  and  warranties and all other
     information  which  Subscriber  has  provided  concerning  Subscriber  and
     Subscriber's  financial  condition,  are  true  and accurate as of the date
     hereof.  If  in  any respect such information, representations, warranties,
     and  covenants are not true and accurate as of the Closing Date. Subscriber
     will  give  written,  notice  of  such  fact  to  the  officers  of Company
     specifying which information, representations, warranties, or covenants are
     not  true  and  accurate  and  the  reasons  therefor.

Section 4.   Representation and Warranty of Company.
             --------------------------------------

     Company  represents  and  warrants  to  Subscriber  that (i) it is duly and
validly organized and in existence under the laws of the State of Delaware, (ii)
it  is  or  will  become  qualified under the laws of all other jurisdictions in
which  such qualification is necessary to enable it to engage in business, (iii)
it  has  full power and authority to own and manage the assets to be owned by it
and  (iv) upon issuance, the Subscribed Shares shall be duly authorized, validly
issued,  fully  paid  and  nonassessable.

Section 5.    Indemnification.
              ---------------

     Subscriber  shall  indemnify  and  hold  harmless  Company  and any person,
partnership,  corporation or entity affiliated in any manner with or employed by
Company  (including  the  officers,  directors  and employees of Company and all
professional  advisors  thereto),  from  and

                                        4
<PAGE>
against  any  and  all  loss,  damage, liability or expense, including costs and
reasonable  attorneys'  fees, to which they may become subject or which they may
incur  by  reason  of  or  in  connection  with  any  misrepresentation  made by
Subscriber  herein,  any  breach  of  any  of  Subscriber's  representations  or
warranties,  or  Subscriber's  failure  to  fulfill  any  of  its  covenants  or
agreements  contained  in  this  Subscription  Agreement.

Section 6.   Miscellaneous.
             -------------

          (a)     Subscriber  agrees not to transfer or assign this Subscription
     Agreement,  or  any  of  Subscriber's  interest herein, to any other person
     without  the  prior written consent of Company, and further agrees chat the
     transfer  or  assignment  of  the  shares of Stock acquired pursuant hereto
     shall be made only in accordance with the provisions of this Agreement, the
     Company's  Certificate  of  Incorporation, the Act and all applicable stats
     securities  laws.

          (b)     Subscriber agrees that Subscriber may not cancel, terminate or
     revoke  this  Subscription  Agreement  (except  as  otherwise  specifically
     permitted  under  applicable  state  securities  laws),  and  that  this
     Subscription  Agreement  shall  be  binding  upon  Subscriber's  permitted
     successors  and  assigns.

          (c)     This  Subscription  Agreement  and  the Investor Questionnaire
     constitute  the entire agreement between the parties hereto with respect to
     the  subject matter hereof. This Subscription Agreement may be amended only
     by  a  writing  executed  by  both  of  the  parties  hereto.

          (d)     This  Subscription  Agreement  shall be enforced, governed and
     construed  in  all  respects  in  accordance  with the laws of the State of
     Delaware.

          (e)     The  representations  and  warranties  of Subscriber set forth
     herein  shall  survive  the  sale  of  the  Subscribed Shares to Subscriber
     pursuant  to  this  Subscription  Agreement.

          (f)     Within  five  days after the receipt of a written request from
     an  officer  of  the Company, Subscriber agrees to provide such information
     and to execute and deliver such documents as reasonably may be necessary to
     comply  with  any  and  all  laws  and  regulations to which the Company is
     subject.

          (g)     Words  importing  the  singular number hereunder shall include
     the  plural  number  and  vice  versa, and any pronoun used herein shall be
     deemed  to  cover  all  genders.

Section 7.   Notice of Acceptance.
             --------------------

     The  officers  of  Company, upon acceptance of this Subscription Agreement,
will  forward  to  Subscriber  a  notice  of  acceptance, which may consist of a
counter-signed  copy  of  this  Subscription  Agreement.

                                        5
<PAGE>
     IN  WITNESS  WHEREOF,  the  undersigned  Subscriber  has  executed  and
acknowledged  this  Subscription  Agreement  as  of  the  date set forth "below.

ENTITY INVESTOR:                             INDIVIDUAL INVESTOR:

MOORE, CLAYTON & CO INC
-----------------------------------          -----------------------------------
(Print Name of Entity)                       (Print Name)

By: /s/ A R Moore
-----------------------------------          -----------------------------------
(Signature)                                  (Signature)

-----------------------------------          -----------------------------------
(Print Name and Title)                       (Date)

-----------------------------------
(Date)

NB.     MOORE,  CLAYTON & CO INC WILL WIRE FUNDS WITHIN 45 DAYS OF THE SIGNING
OF  THIS  AGREEMENT  BY  BOTH  PARTIES.

                                                    ARM

                                        6
<PAGE>
                           ACCEPTANCE OF SUBSCRIPTION

The foregoing subscription of 1,500,000 w/ MOORE, CLAYTON & CO., INC. is hereby
                              --------------------------------------
accepted.

                                   BRIDGETECH HOLDINGS INTERNATIONAL, INC.

Date: 10/19/05                     By: /s/  Thomas C. Kuhn III
     ------------                      -----------------------------------------
                                       Name: THOMAS C. KUHN III
                                             -----------------------------------
                                       Title: EVP & CFO
                                             -----------------------------------

                                        7Employment Agreement - J. Siegler

    Exhibit
      10(g)

    
 

    

    EMPLOYMENT
      AGREEMENT

     

    THIS
      EMPLOYMENT AGREEMENT
      (“Agreement”) is made by and between TXU
      CORP.
(“Company”),
      and Jonathan Siegler (“Executive”), and is dated as of August 2, 2004
      (“Effective Date”). The Agreement is designed to strengthen the link between
      Executive’s compensation and long-term shareholder value.

     

    WITNESSETH:

     

    WHEREAS,
      Company desires to employ Executive;

     

    WHEREAS,
      Executive desires to accept employment by Company pursuant to all of the terms
      and conditions hereinafter set forth;

     

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

     

    ARTICLE
      1: EMPLOYMENT
      AND DUTIES

     

    1.1 Employment;
      Effective Date.
      Company agrees to employ Executive and Executive agrees to be employed by
      Company, beginning on the Effective Date and continuing for the period of time
      set forth in Article 2 of this Agreement, subject to the terms and conditions
      of
      this Agreement. Executive understands and agrees that this Agreement is subject
      to final ratification and approval by the Organization and Compensation
      Committee of the Board of Directors of Company and by the Board of Directors
      of
      Company.

     

    1.2 Positions.
      From and after the Effective Date, Company shall employ Executive
      in
      the position of Vice President of Strategy. 

     

    1.3 Duties
      and Services.
      Executive agrees to serve in the position referred to in Paragraph 1.2.
      Executive agrees to perform diligently and to the best of his abilities the
      duties and services appropriate to such offices which the parties mutually
      may
      agree upon from time to time.

     

     

    

    
      
        
          EXHIBIT
            1

        

        
          
          

          
            

          

        

        
          
          

        

      

    

    
      ARTICLE
        2: TERM
        AND TERMINATION OF EMPLOYMENT

       

      2.1 Term.
        Unless sooner terminated pursuant to other provisions hereof, Company agrees
        to
        employ Executive for a three (3) year period beginning on the Effective Date
        (“Term”), provided that the Term shall be automatically renewed for successive
        one (1) year periods following the expiration of the three (3) year period
        described above, unless either party provides the other party with notice
        (at
        least six (6) months before the expiration of the applicable Term) of its
        (or
        his) intention
        not to renew the Term, in which case the Term shall expire at the end of
        the
        current Term. Notwithstanding anything to the contrary herein, (i) in the
        event
        of a Change in Control (as defined below) when there is less than one (1)
        year
        left to the Term, or (ii) if, at the time this Agreement would otherwise
        expire,
        Company is in the process of negotiating, with
        the
        approval of the Board of Directors or a committee thereof, with a third party
        pursuant to a letter of intent, memorandum of understanding, confidentiality
        agreement or other similar evidence of active negotiation concerning a potential
        transaction or event which, if consummated, would constitute a Change in
        Control
        (“Contemplated Change in Control”), in either case (i) or (ii) above this
        Agreement shall not expire and the Term shall automatically be extended to
        the
        earlier of (a) sixty (60) days after a formal decision by Company or the
        third
        party to cease negotiations concerning such Contemplated Change in Control,
        such
        formal decision to be evidenced by correspondence between Company and the
        third
        party, or a resolution of the Board of Directors or a committee thereof;
        or (b)
        one (1) year following the consummation of the Change in Control described
        in
        clause (i) above or resulting from such negotiation as described in clause
        (ii)
        above.

    

     

    2.2 Company’s
      Right to Terminate. 
      Notwithstanding
      the provisions of paragraph 2.1, Company shall have the right to terminate
      Executive’s employment under this Agreement at any time for any of the following
      reasons:

     

    (a) upon
      Executive’s death;

     

    (b) upon
      Executive’s becoming disabled within the meaning of Company’s Long-Term
      Disability Plan, provided such plan requires Executive to be unable to perform
      his duties hereunder due to sickness or injury for a period of at least 180
      consecutive days (a “Disability”);

     

    (c) if,
      in
      carrying out his duties hereunder, Executive engages in conduct that constitutes
      (i) a breach of his fiduciary duty to Company or its shareholders, (ii) gross
      neglect or (iii) gross misconduct resulting, in any case, in material economic
      harm to Company, or upon the conviction of Executive for a felony or other
      crime
      involving moral turpitude; or

     

    (d) for
      any
      other reason whatsoever, in the sole discretion of Company.

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    For
      purposes of this Agreement, a termination by Company under clause (c) above
      shall constitute a termination by Company for “Cause.” Notwithstanding the
      foregoing, Company may not terminate Executive’s employment for Cause unless
      Company has provided Executive with written notice specifying the reason(s)
      for
      such termination, and if the circumstances surrounding such termination may
      be
      cured by Executive, Company has given Executive a period of not less than thirty
      (30) days from the date of such notice during which Executive has failed to
      cure
      the matter to the reasonable satisfaction of Company.

     

    2.3 Executive’s
      Right to Terminate.
      Notwithstanding
      the provisions of paragraph 2.1, Executive shall have the right to terminate
      his
      employment under this Agreement at any time for any of the following
      reasons:

     

    (a) the
      assignment to Executive of duties materially inconsistent with the duties
      associated with the position described in paragraph 1.2 as such duties are
      constituted as of the Effective Date, or the removal of him from any such
      positions;

     

    (b) a
      material diminution in the nature or scope of Executive’s authority,
      responsibilities, or titles from those applicable to him as of the Effective
      Date;

     

    (c) the
      occurrence of acts or conduct on the part of Company or any of its affiliates,
      or their board of directors, officers, representatives or stockholders, which
      prevent Executive from, or substantively hinder Executive in, performing his
      duties or responsibilities pursuant to this Agreement;

     

    (d) Company
      requiring Executive’s permanent office to be located more than fifty (50) miles
      from its current location;

     

    (e) the
      taking of any action by Company that would materially adversely affect the
      corporate amenities enjoyed by Executive on the Effective Date;

     

    (f) a
      material breach by Company of any provision of this Agreement which, if
      correctable, remains uncorrected for 30 days following written notice by
      Executive of such breach to Company, it being agreed that any reduction in
      Executive’s then current annual base salary, any reduction in Executive’s Target
      Bonus (as defined below) or any failure to make the annual awards provided
      for
      in Section 3.5, shall constitute a material breach by Company of this Agreement;
      and

     

    (g) for
      any
      other reason whatsoever, in the sole discretion of Executive.

     

    For
      purposes of this Agreement: (i) a termination of employment by Executive under
      any of clauses (a) through (f), shall constitute a termination of employment
      by
      Executive for “Good Reason;” and (ii) a termination of employment by Executive
      under clause (g) above shall constitute a termination of employment by Executive
      “without Good Reason.”

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    2.4 Notice
      of Termination.
      Notwithstanding the provisions in Section 2.1 relating to the Term of this
      Agreement, if Company or Executive desires to terminate Executive’s employment
      hereunder at any time prior to expiration of the term of employment as provided
      in paragraph 2.1, it or he shall do so by giving written notice to the other
      party that it or he has elected to terminate Executive’s employment hereunder
      and stating the effective date and reason for such termination, provided that
      no
      such action shall alter or amend any other provisions hereof or rights arising
      hereunder.

     

    2.5 Liability
      for Damages.
      Notwithstanding anything herein to the contrary, Company agrees not to pursue
      any claim against Executive resulting from Executive’s termination of this
      Agreement prior to the expiration of the Term.

     

    ARTICLE
      3: COMPENSATION
      AND BENEFITS

     

    3.1 Base
      Salary.
      During the Term, Executive shall receive an annual base salary equal to
      $190,000.00, or such higher amounts as determined in the sole discretion of
      Company. Executive’s annual base salary shall be paid in equal installments in
      accordance with Company’s standard policy regarding payment of compensation to
      executives.

     

    3.2 Special
      Signing Bonus.
      On, or before Executive’s second pay period of employment, Company shall make a
      lump-sum cash payment to Executive in the amount of $75,000.00.

     

    3.3 Relocation
      Expenses.  The
      Company will reimburse Executive for reasonable expenses associated with
      relocating to Dallas, Texas, pursuant to the policy attached hereto as
      Exhibit 1 (“Policy”), except that Section IV (2) of the Policy is hereby
      amended and incorporated by reference to provide that “the total number of
      lodging nights under Plan Section II and Plan Section IV combined shall not
      exceed sixty (60) days.”

     

    3.4 Annual
      Bonus.
      In addition to the base salary, during each calendar year during the Term
      commencing with calendar year 2004, Executive shall have the opportunity to
      earn
      an annual cash bonus (“Bonus”) under and subject to the terms and conditions of
      the TXU Annual Incentive Plan (“AIP”). For purposes of this Agreement,
      Executive’s “Target Bonus” for calendar year 2004 shall be 40% of Executive’s
      annualized base salary. For each succeeding calendar year in the Term,
      Executive’s Target Bonus shall be 40% of Executive’s base salary. To the extent
      the limitation on awards provided for under the AIP would limit the amount
      of
      the Bonus contemplated herein, any amount over and above such AIP limit will
      be
      paid by Company contemporaneously with the payment under the AIP. 

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    3.5 Annual
      Long-Term Incentive Compensation Grants. 
      Executive
      will be entitled to receive annual performance-based awards under and subject
      to
      the terms of the TXU Long-Term Incentive Compensation Plan (“LTICP”) each year
      during the Term of this Agreement commencing in 2004. The annual LTICP award
      for
      2004 shall have a target value of 5,000 shares of TXU Corp. common stock, and
      the annual LTICP award for each succeeding year during the Term of this
      Agreement shall have a target value of not less than 5,000 shares of TXU Corp.
      common stock. The initial LTICP award for 2004 shall be made as soon as
      reasonably practical following the Effective Date and shall be on terms and
      conditions consistent with other 2004 annual LTICP awards made to executive
      officers. The annual award for each succeeding year will be made following,
      and
      in connection with, the executive officer annual review by the Organization
      & Compensation Committee of the Board of Directors of TXU Corp. (“O&C
      Committee”). Except as expressly described herein, all such LTICP awards shall
      be subject to terms, conditions and restrictions comparable to those contained
      in awards granted for the corresponding year to executive officers under the
      LTICP, or such other terms, conditions and restrictions as may be approved
      by
      the O&C Committee with the concurrence of Executive.

     

    As
      the
      following chart illustrates, and notwithstanding any provisions of the LTICP
      to
      the contrary, performance for all Performance-Based Restricted Stock Awards
      granted under this Section 3.5 shall be measured by TXU Corp.’s total
      shareholder return (“TSR”) relative to the other companies that comprise the
      Standard and Poors 500 Electric Utilities Index (“SPELEC”) over the performance
      period. Minimum, target and maximum performance levels are set in terms of
      TXU
      Corp.’s TSR performance against the SPELEC quartiles.

     

    

      
        	
                Performance
                  Levels

              	
                Zero

              	
                Minimum

              	
                Target

              	
                125%
                  of

                Target

              	
                150%
                  of

                Target

              	
                Maximum

              
	
                TSR
                  Ranges

              	
                40.99th
                  Percentile
                  and below

              	
                41st
                  to
                  50.99th
                  percentiles

              	
                51st
                  to
                  60.99th
                  percentiles

              	
                61st
                  to
                  70.99th
                  percentiles

              	
                71st
                  to
                  80.99th
                  percentiles

              	
                81st
                  percentile
                  and above

              
	
                Payouts

              	
                No
                  payout

              	
                Interpolate
                  between Minimum and Target (50% to 100% of Target)

              	
                Interpolate
                  between 100% of Target and 125% of Target

              	
                Interpolate
                  between 125% of Target and 150% of Target

              	
                Interpolate
                  between 150% of Target and Maximum (150% and 200% of
                  Target)

              	
                Maximum
                  payout (200% of Target)

              

      

    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    Except
      as
      provided in Section 4.3, once such awards have been granted, they shall be
      paid
      in full at the end of the relevant performance period based on actual
      performance regardless of whether Executive’s employment has previously
      terminated. In the event Executive’s employment with Company terminates prior to
      any of the above-described awards being granted to Executive, such awards shall
      be subject to the provisions of Article 4 herein. 

     

    Company
      shall, if Executive so requests, satisfy any income tax withholding obligations
      in respect of the payment of any amounts under the LTICP by withholding amounts
      otherwise issuable to Executive under such award.

     

    3.6 Vacation
      and Sick Leave.
      During each year of his employment, Executive shall be entitled to vacation
      and
      sick leave benefits equal to the maximum available to any Company executive,
      determined without regard to the period of service that might otherwise be
      necessary to entitle Executive to such vacation or sick leave under standard
      Company policy.

     

    3.7 Other
      Employee Benefits.
      Executive shall be entitled to participate in all of Company’s employee benefit
      plans, programs, arrangements and fringe benefit policies made available to
      similarly situated senior executives of the Company to the extent he is
      qualified to do so by virtue of his employment with Company, subject to the
      terms, conditions and limitations of such plans, arrangements and policies,
      as
      they may be amended from time to time.

     

    3.8 Other
      Perquisites.
      During his employment hereunder, Executive shall be afforded the following
      benefits as incidences of his employment:

     

    (a) Business
      and Entertainment Expenses - Subject to Company’s standard policies and
      procedures with respect to expense reimbursement as applied to its executive
      employees generally, Company shall reimburse Executive for, or pay on behalf
      of
Executive,
      reasonable and appropriate expenses incurred by Executive for business related
      purposes, including dues and fees to industry and professional organizations,
      bar related expenses, costs of entertainment and business development, and
      costs
      reasonably incurred as a result of Executive’s spouse accompanying Executive on
      business travel. 

     

    (b) Parking
      -
      Company shall provide at no expense to Executive a reserved parking place
      convenient to Executive’s headquarters office.

     

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    ARTICLE
      4: EFFECT
      OF TERMINATION ON COMPENSATION

     

    4.1 By
      Expiration of Term.
      If Executive’s employment hereunder shall terminate upon expiration of the Term,
      then all compensation and all benefits to Executive hereunder shall terminate
      contemporaneously with termination of his employment, except that:

     

    (a) Company
      shall pay to Executive all Accrued Obligations (as defined below in Section
      4.8)
      in a lump sum in cash within thirty (30) days after the date of termination
      of
      Executive’s employment (the “Date of Termination”). For the avoidance of doubt,
      salary, annual bonus, vacation and sick leave, other employee benefits (except
      for COBRA Coverage (as defined below)) and other perquisites shall cease to
      accrue as of the Date of Termination.

     

    (b) Company
      shall pay Executive a pro rata annual Bonus for the year of termination based
      on
      actual performance at the time when bonuses are paid to senior executives
      generally.

     

    (c) All
      outstanding awards which had been made to Executive pursuant to Section 3.5
      (for
      purposes of this Article 4, “LTICP Awards”) shall not be forfeited and shall be
      paid at the times and in the amounts provided for in, and subject to the terms
      and conditions of, such awards.

     

    (d) Company
      shall provide Executive and his eligible dependents with continuous health
      care
      coverage under and subject to the provisions of the Consolidated Omnibus Budget
      Reconciliation Act of 1985 (“COBRA Coverage”) at the prevailing active employee
      rate for up to eighteen (18) months from such termination.

     

    (e) Company’s
      obligations under Sections 4.6 and 5.1 shall continue.

     

    (f) Company
      shall pay any amounts owed but unpaid to Executive under any plan, policy or
      program of Company as of the Date of Termination at the time provided by, and
      in
      accordance with the terms of, such plan, policy or program, including any annual
      Bonus earned in the prior calendar year or a portion thereof as described in
      Section 3.4.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    4.2 By
      Company Without Cause or By Executive for Good Reason Prior to Expiration of
      Term.
      If Executive’s employment hereunder shall be terminated by Company without
      Cause, or by Executive for Good Reason, prior to the expiration of the Term
      then, upon such termination, the payments and benefits described below will
      be
      provided to Executive, or in the event of Executive’s death, to his spouse (or
      his estate if he is not married or his spouse does not survive
      him):

     

    (a) Company
      shall pay to the Executive all Accrued Obligations in a lump sum in cash within
      thirty (30) days after the Date of Termination. For the avoidance of doubt,
      salary, annual bonus, vacation and sick leave, other employee benefits (except
      for COBRA
      Coverage and retiree medical) and other perquisites shall cease to accrue as
      of
      the Date of Termination.

     

    (b) Company
      shall immediately pay Executive a lump sum payment equal to the then current
      annualized base salary provided for under Section 3.1 and the Target Bonuses
      due
      as described in Section 3.4, through the remainder of the Term, provided that
      the lump sum shall not be less than the sum of Executive’s annualized base
      salary and Target Bonus.

     

    (c) All
      outstanding LTICP Awards shall be paid at the times and in the amounts provided
      for in, and subject to the terms and conditions of, such awards. Additionally,
      all ungranted LTICP Awards that would have been made to Executive pursuant
      to
      Section 3.5 on or prior to the expiration date of the Term shall be immediately
      granted. The performance period for each such previously ungranted LTICP Award
      shall be the performance period that would have applied had the award been
      made
      at the time provided for in Section 3.5. Each such previously ungranted LTICP
      Award shall be delivered or paid following the applicable performance period
      in
      accordance with the terms of the award.

     

    (d) Company
      shall pay Executive an amount equal to: (i) the forfeited portion of Executive’s
      accounts under the TXU Deferred and Incentive Compensation Plan (“DICP”) and the
      TXU Salary Deferral Program (“SDP”) (valued as of the date of such termination
      in accordance with the valuation methodology used under such plans); and (ii)
      the matching contributions which would have been made on behalf of Executive
      under the DICP had Executive continued to defer salary under the DICP at the
      rate in effect as of the date of such termination for an additional twelve
      (12)
      months.

     

    (e) Company
      shall provide Executive and his eligible dependents with COBRA Coverage at
      the
      prevailing active employee rate for up to eighteen (18) months from such
      termination.  

     

    (f) Company’s
      obligations under Sections 4.6 and 5.1 shall continue.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    (g) Company
      shall pay any amounts owed but unpaid to Executive under any plan, policy or
      program of Company as of the date of termination at the time provided by, and
      in
      accordance with the terms of, such plan, policy or program, including any unpaid
      annual Bonus earned in the prior calendar year or portion thereof as described
      in Section 3.4.

     

        4.3 By
      Executive Without Good Reason or By Company for Cause.
      If Executive’s employment hereunder shall be terminated by Company for Cause or
      by Executive without Good Reason, then all
      compensation
      and benefits to Executive hereunder shall terminate contemporaneously with
      the
      termination of such employment, except that:

     

    (a) Company
      shall pay to Executive all Accrued Obligations in a lump sum in cash within
      thirty (30) days after the Date of Termination. For the avoidance of doubt,
      salary, annual bonus, vacation and sick leave, other employee benefits (except
      for COBRA
      Coverage) and other perquisites shall cease to accrue as of the Date of
      Termination.

     

    (b) Company
      shall provide Executive and his eligible dependents with COBRA Coverage at
      the
      prevailing COBRA rate for up to eighteen (18) months from such
      termination.

     

    (c) Company’s
      obligations under Sections 4.6 and 5.1 shall continue.

     

    (d) Company
      shall pay any amounts owed but unpaid to Executive under any plan, policy or
      program of Company as of the date of termination at the time provided by, and
      in
      accordance with the terms of, such plan, policy or program, including any annual
      Bonus earned in the prior calendar year or portion thereof as described in
      Section 3.4.

     

    (e) Any
      unvested or ungranted LTICP awards described in Section 3.5 shall be
      forfeited.

     

    4.4 Upon
      Executive’s Death or Disability.In
      the
      event of Executive’s death or Disability during the Term, this Agreement shall
      terminate, and Executive, or Executive’s spouse in the event of his death (or
      his estate in the event he is not married or his spouse does not survive him)
      will be entitled to receive the following:

     

    (a) Company
      shall pay to the Executive all Accrued Obligations in a lump sum in cash within
      thirty (30) days after the Date of Termination. For the avoidance of doubt,
      salary, annual bonus, vacation and sick leave, other employee benefits (except
      for COBRA Coverage) and other perquisites shall cease to accrue as of the Date
      of Termination.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    (b) Company
      shall immediately pay Executive (or Executive’s surviving spouse or estate, as
      the case may be) a lump sum payment equal to the sum of Executive’s then current
      annualized base salary provided for under Section 3.1 plus the Target Bonus
      defined in Section 3.4.

     

    (c) Company
      shall pay Executive a pro rata annual Bonus for the year of termination based
      on
      actual performance at the time when bonuses are paid to senior executives
      generally.

     

    (d) All
      outstanding LTICP Awards shall be paid at the times and in the amounts provided
      for in, and subject to the terms and conditions of, such awards. Additionally,
      all ungranted LTICP Awards that would have been made to Executive pursuant
      to
      Section 3.5 during the one (1) year period following the date of Executive’s
      death or Disability shall be immediately granted. The performance period for
      each such previously ungranted LTICP Award shall be the performance period
      that
      would have applied had the award been made at the time provided for in Section
      3.5. Each such previously ungranted LTICP Award shall be delivered or paid
      following the applicable performance period in accordance with the terms of
      the
      award. Any LTICP
      Awards
      provided for in Section 3.5 which remain ungranted after application of this
      subsection 4.4(d) shall be forfeited.

     

    (e) Company
      shall provide Executive and his eligible dependents with COBRA Coverage at
      the
      prevailing active employee rate for up to thirty-six (36) months from such
      termination.

     

    (f) Company’s
      obligations under Sections 4.6 and 5.1 shall continue.

     

    (g) Company
      shall pay any amounts owed but unpaid to Executive under any plan, policy or
      program of Company as of the date of termination at the time provided by, and
      in
      accordance with the terms of, such plan, policy or program, including any annual
      Bonus earned in the prior calendar year or portion thereof as described in
      Section 3.4.

     

    4.5 Termination
      Following Change in Control.
      If
      Executive’s employment is terminated by Company (or its successor) without Cause
      or Executive terminates his employment with Company (or its successor) with
      Good
      Reason in either case within twenty-four (24) months after a Change in Control
      (as defined in Section 4.8 below), Executive will be entitled to the following
      benefits:

     

    (a) Company
      (or its successor) shall pay to the Executive all Accrued Obligations in a
      lump
      sum in cash within thirty (30) days after the Date of Termination. For the
      avoidance of doubt, salary, annual bonus, vacation and sick leave, other
      employee benefits (except for COBRA Coverage and retiree medical) and other
      perquisites shall cease to accrue as of the Date of Termination.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    (b) Company
      (or its successor) shall immediately pay Executive a lump sum payment equal
      to
      the then current annualized base salary provided for under Section 3.1 and
      the
      Target Bonuses due as described in Section 3.4, through the remainder of the
      Term, provided that the lump sum shall not be less than two times the sum of
      Executive’s annualized base salary and Target Bonus.

     

    (c) All
      outstanding LTICP Awards shall not forfeit and shall be paid at the times and
      in
      the amounts, provided for in, and subject to the terms and conditions of, such
      awards. Additionally, all ungranted LTICP Awards that would have been made
      to
      Executive pursuant to Section 3.5 on or prior to the expiration date of the
      initial three (3) year Term shall be immediately granted. The performance period
      for each such previously ungranted LTICP Award shall be the performance period
      that would have applied
      had the award been made at the time provided for in Section 3.5. Each such
      previously ungranted LTICP Award shall be delivered or paid following the
      applicable performance period in accordance with the terms of the award.

     

    (d) 
      Company
      shall pay Executive an amount equal to: (i) the forfeited portion of Executive’s
      accounts under the TXU Deferred and Incentive Compensation Plan (“DICP”) and the
      TXU Salary Deferral Program (“SDP”) (valued as of the date of such termination
      in accordance with the valuation methodology used under such plans); and (ii)
      the matching contributions which would have been made on behalf of Executive
      under the DICP had Executive continued to defer salary under the DICP at the
      rate in effect as of the date of such termination for an additional 36
      months.

     

    (e) Company
      (or its successor) shall provide Executive and his eligible dependents with
      COBRA Coverage at the prevailing active employee rate for up to eighteen (18)
      months from such termination. 

     

    (f) Company’s
      (or its successor’s) obligations under Sections 4.6 and 5.1 shall
      continue.

     

    (g) Company
      (or its successor) shall pay any amounts owed but unpaid to Executive under
      any
      plan, policy or program of Company as of the date of termination at the time
      provided by, and in accordance with the terms of, such plan, policy or program,
      including any Annual Bonus earned in the prior calendar year or portion thereof
      as described in Section 3.4.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    4.6 Certain
      Additional Payments by Company.
      Notwithstanding
      anything to the contrary in this Agreement, if any payment, distribution or
      provision of a benefit by Company to or for the benefit of Executive, whether
      paid or payable, distributed or distributable or provided or to be provided
      pursuant to the terms of this Agreement or otherwise (a “Payment”), would be
      subject to an excise or other special additional tax that would not have been
      imposed absent such Payment (including, without limitation, any excise tax
      imposed by Section 4999 of the Internal Revenue Code of 1986, as amended),
      or
      any interest or penalties with respect to such excise or other additional tax
      (such excise or other additional tax, together with any such interest or
      penalties, are hereinafter collectively referred to as the “Excise Tax”),
      Company shall pay to Executive an additional payment (a “Gross-up Payment”) in
      an amount such that after payment by Executive of all taxes (including any
      interest or penalties imposed with respect to such taxes), including any income
      taxes and Excise Taxes imposed on any Gross-up Payment, Executive retains an
      amount of the Gross-up Payment (taking into account any similar gross-up
      payments to Executive under any stock incentive or other benefit plan or program
      of Company) equal to the Excise Tax imposed upon the Payments. Company and
      Executive shall make an initial determination as to whether a Gross-up Payment
      is required and the amount of any such Gross-up Payment. Executive shall notify
      Company in writing of any claim by the Internal Revenue Service which, if
      successful, would require Company to make a Gross-up Payment (or a Gross-up
      Payment in excess of that, if any, initially determined by Company and
      Executive) within ten (10) business days after the receipt of such claim.
      Company shall notify Executive in writing at least ten (10) business days prior
      to the due date of any response required with respect to such claim if it plans
      to contest the claim. If Company decides to contest such claim, Executive shall
      cooperate
      fully with Company in such action; provided, however, Company shall bear and
      pay
      directly or indirectly all costs and expenses (including additional interest
      and
      penalties) incurred in connection with such action and shall indemnify and
      hold
      Executive harmless, on an after-tax basis, for any Excise Tax or income tax,
      including interest and penalties with respect thereto, imposed as a result
      of
      Company’s action. If, as a result of Company’s action with respect to a claim,
      Executive receives a refund of any amount paid by Company with respect to such
      claim, Executive shall promptly pay such refund to Company. If Company fails
      to
      timely notify Executive
      whether it will contest such claim or Company determines not to contest such
      claim, then Company shall immediately pay to Executive the portion of such
      claim, if any, which it has not previously paid to Executive. Company’s
      obligation under this Section 4.6 shall continue after the termination or
      expiration of the Term.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    4.7 Payment
      Obligations Absolute / Release of Claims.
      Except
      as
      set forth in the following paragraph, Company’s obligation to pay Executive the
      amounts and to make the arrangements provided in this Article 4 shall be
      absolute and unconditional and shall not be affected by any circumstances,
      including, without limitation, any set-off, counterclaim, recoupment, defense
      or
      other right which Company (including its subsidiaries and affiliates) may have
      against him or anyone else. All amounts payable by Company shall be paid without
      notice or demand. Executive shall not be obligated to seek other employment
      in
      mitigation of the amounts payable or arrangements made under any provision
      of
      this Article 4, and the obtaining of any such other employment (or the
      engagement in any endeavor as an independent contractor, sole proprietor,
      partner, or joint venturer) shall in no event effect any reduction of Company’s
      obligations to make (or cause to be made) the payments and arrangements required
      to be made under this Article 4.

     

    Executive
      acknowledges and agrees that the payments and benefits provided for in this
      Article 4 constitute the exclusive remedy of Executive upon termination of
      employment for any reason. Executive further agrees that as a condition to
      receiving such payments and benefits, Executive shall execute a release of
      claims arising out of Executive’s employment with, and termination of employment
      from, Company in a form reasonably requested by Company.

     

    4.8 Certain
      Defined Terms. 
      For
      purposes of this Agreement, the following terms shall have the following
      meanings:

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    (a) “Change
      in Control” means a change in control of the Company of a nature that would be
      required to be reported in response to Item 1(a) of the Securities and Exchange
      Commission Form 8-K, as in effect on the date hereof, pursuant to Section 13
      or
      15(d) of the Securities Exchange Act of 1934, as amended (“Exchange Act”), or
      would have been required to be so reported but for the fact that such event
      had
      been “previously reported” as that term is defined in Rule 12b-2 of Regulation
      12B under the Exchange Act; provided that, without in any way limiting the
      foregoing, a Change in Control shall be deemed to have occurred if any one
      or
      more of the following events occurs: (i) any Person is or becomes the beneficial
      owner (as defined in Rule 13d-3 under the Exchange Act), directly or indirectly,
      of securities of the Company representing 20% or more of the combined voting
      power of the Company then outstanding securities having the right to vote at
      elections of directors of the Company (“Voting Securities”); (ii) individuals
      who constitute
      the board of directors of the Company on the Effective Date of this Agreement
      (the “Incumbent Board”) cease for any reason to constitute at least a majority
      thereof, provided that any person becoming a director subsequent to the
      Effective Date of this Agreement
      whose election, or nomination for election by the Company shareholders, was
      approved by at least three-quarters of the Company’s directors comprising the
      Incumbent Board (either by a specific vote or by approval of the proxy statement
      of the Company in which such person is named as a nominee for director, without
      objection to such nomination) shall, for purposes of this clause (ii), be
      considered as though such person were a member of the Incumbent Board; (iii)
      a
      recapitalization or reclassification of the Voting Securities of the Company,
      which results in either (a) a decrease by 33% or more in the aggregate
      percentage ownership of Voting Securities held by Independent Shareholders
      (on a
      primary basis or on a fully diluted basis after giving effect to the exercise
      of
      stock options and warrants), or (b) an increase in the aggregate percentage
      ownership of Voting Securities held by non-Independent Shareholders (on a
      primary basis or on a fully diluted basis after giving effect to the exercise
      of
      stock options and warrants) to greater than 50%; (iv) all or substantially
      all
      of the assets of the Company are liquidated or transferred to an unrelated
      party; or (v) the Company is a party to a merger, consolidation, reorganization
      or similar transaction pursuant to which the Company is not the surviving
      ultimate parent entity. For purposes of this definition, the terms “Person”
shall mean and include any individual, corporation, partnership, group
      association or other “person,” as such term is used in Section 14(d) of the
      Exchange Act, other than the Company, a subsidiary of the Company or any
      employee benefit plan(s) sponsored or maintained by the Company or any
      subsidiary thereof, and the term “Independent Shareholder” shall mean any
      shareholder of the Company except any employee(s) or director(s) of the Company
      or any employee benefit plan(s) sponsored or maintained by the Company or any
      subsidiary thereof.

     

    (b) The
      term
“immediately” wherever used herein to refer to the timing of a payment or other
      performance requirement of this Agreement, shall mean within ten (10) business
      days after the date such payment or performance becomes due.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    (c) “Accrued
      Obligations” shall mean, as of the Date of Termination, the sum of (i)
      Executive’s base salary through the Date of Termination to the extent not
      previously paid, (ii) the signing bonus provided for in Section 3.2 to the
      extent not previously paid, (iii) except as otherwise previously requested
      by
      Executive, the amount of any bonus, incentive compensation, deferred
      compensation and other cash compensation accrued by Executive as of the Date
      of
      Termination to the extent not previously paid and (iv) any vacation pay, expense
      reimbursements and other cash entitlements accrued by Executive as of the Date
      of Termination to the extent not previously paid.

     

    4.9 Confidentiality
      and Nondisclosure.
      Executive understands and agrees that he will be given Confidential Information
      (as defined below), and specialized training relating to such Confidential
      Information, during his employment with Company relating to the business of
      Company and/or its affiliates. Except as authorized within the course and scope
      of his employment, Executive hereby expressly agrees to maintain in strictest
      confidence
      and not to use in
      any
      way (including without limitation in any future business relationship of
      Executive), publish, disclose or authorize anyone else to use, publish or
      disclose in any way, any Confidential Information relating in any manner to
      the
      business or affairs of Company and/or its affiliates. Executive agrees further
      not to remove or retain any figures, calculations, letters, documents, lists,
      papers, or copies thereof, which embody Confidential Information of Company
      and/or its affiliates, and to return, prior to Executive’s termination of
      employment, any such information in Executive’s possession. If Executive
      discovers or comes into possession of any such information after his
      termination, he shall promptly return it to Company. For purposes of this
      Agreement, “Confidential Information” includes, but is not limited to,
      information in the possession of, prepared by, obtained by, compiled by, or
      that
      is used by Company or any of its affiliates or customers and (a) is proprietary
      to, about, or created by Company or its affiliates or customers; (b) gives
      Company or its affiliates or customers some competitive business advantage,
      the
      opportunity of obtaining such advantage, or disclosure of which might be
      detrimental to the interest of Company or its affiliates or customers; and
      (c)
      is not typically disclosed by Company or its affiliates or customers, or known
      by persons who are not employed by Company or its affiliates or customers.
      Without in any way limiting the foregoing and by way of example, Confidential
      Information shall include information not generally available to the public
      pertaining to Company’s business operations such as financial and operational
      information and data, operational plans and strategies, business and marketing
      strategies and plans for various products and services, global operational
      planning, and acquisition and divestiture planning.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    4.10 Noncompetition
      and Non-Solicitation.
      Executive acknowledges and agrees that: (1) in order to perform his obligations
      and job duties for Company, Executive will gain training and access to
      Confidential Information regarding Company and/or its affiliates or customers;
      (2) use of such Confidential Information in competition with Company and/or
      its
      affiliates or customers would be detrimental to the business interests of
      Company and/or its affiliates or customers; and (3) Executive would not have
      been allowed to gain access to Confidential Information, or to provide the
      obligations and job duties contemplated under this Agreement without his
      promises and agreements contained in the following paragraph. Executive also
      acknowledges and agrees that the services he will be performing for Company,
      and
      the Confidential Information and training he will be provided, relate to all
      operations of Company and will not be limited to any specific geographic
      location within which Company, or any of its affiliates, conducts business.
      

     

    In
      the
      event this Agreement is terminated pursuant to the provisions of Sections 4.1,
      4.2, 4.3 or 4.5 above, Executive agrees that for a period of one (1) year after
      such termination, Executive shall not, directly or knowingly indirectly, either
      as an employee, employer, independent contractor, consultant, agent, principal,
      partner, stockholder, officer, director, or in any other individual or
      representative capacity, either for his own benefit or the benefit of any other
      person or entity: (a) engage or participate in a business which competes in
      a
      material manner with Company or any of its affiliates in the geographic
      locations in which Company (or such affiliates) conduct business; (b) solicit,
      induce, encourage or in any way cause any of Company’s (or affiliate’s)
      customers, or prospective customers, or any person, firm, corporation, company,
      partnership, association or entity which was contacted or whose business was
      solicited, serviced or maintained by Company (or its affiliates) during the
      term
      of Executive’s employment with
      Company to reduce or terminate its business relationship with Company (or such
      affiliate); or (c) solicit, recruit, induce, encourage or in any way cause
      any
      employee of Company (or an affiliate) to terminate his employment with Company
      (or such affiliate). 

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    ARTICLE
      5: MISCELLANEOUS

     

    5.1 Interest
      and Indemnification; D&O Insurance.

     

    (a) If
      any
      payment to Executive provided for in this Agreement is not made by Company
      when
      due, Company shall pay to Executive interest on the amount payable from the
      date
      that such payment should have been made until such payment is made, which
      interest shall be calculated at 3% plus the prime or base rate of interest
      announced by JP Morgan Chase Bank, N.A. at its principal office in Dallas,
      Texas
      (but not in excess of the highest lawful rate), and such interest rate shall
      change when and as any such change in such prime or base rate shall be announced
      by such bank. If Executive shall obtain any money judgment or otherwise prevail
      with respect to any litigation brought by Executive
      or Company to enforce or interpret any provision contained herein, Company,
      to
      the fullest extent permitted by applicable law, hereby indemnifies Executive
      for
      his reasonable attorneys’ fees and disbursements incurred by Executive in such
      litigation and hereby agrees (i) to pay in full all such fees and disbursements
      and (ii) to pay prejudgment interest on any money judgment obtained by Executive
      from the earliest date that payment to him should have been made under this
      Agreement until such judgment shall have been paid in full, which interest
      shall
      be calculated at the rate set forth in the preceding sentence.

     

    (b) Company
      agrees that if Executive is made a party or threatened to be made a party to
      any
      action, suit or proceeding, whether civil, criminal, administrative or
      investigative by reason of the fact that Executive is or was an employee of
      Company, or any subsidiary of Company or is or was serving at the request of
      Company, as a director, officer, member, employee or agent of another
      corporation or a partnership, joint venture, trust or other enterprise
      (“Proceeding”), Executive shall be indemnified and held harmless by Company to
      the fullest extent permitted by applicable law.

     

    (c) Company
      shall provide Executive with directors’ and officers’ liability insurance at
      least as favorable as the insurance coverage provided to other senior executive
      officers and directors of Company respecting liabilities, costs, charges and
      expenses of any type whatsoever incurred or sustained by Executive (or
      Executive’s legal representative or other successors) in connection with a
      Proceeding.

     

    Company’s
      obligations under this Section 5.1(a), (b) and (c) shall continue after the
      termination of this Agreement.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    5.2 Notices.
      For purposes of this Agreement, notices and all other communications provided
      for herein shall be in writing and shall be deemed to have been duly given
      when
      personally delivered or three days after the date mailed by United States
      registered or certified mail, return receipt requested, or by a nationally
      known
      overnight courier, in either case postage prepaid and addressed as
      follows:

    

    
      
        	
                If
                  to Company to:

              	
                Eric
                  H. Peterson

              
	 	
                Executive
                  Vice President and General Counsel

              
	 	
                TXU
                  Corp.

              
	 	
                1601
                  Bryan Street

                Dallas,

                Texas
                  75201-3411

              
	
                If
                  to Executive to:

              	
                The
                  most recent address on file with
                  Company

              

      

    

     

    or
      to
      such other address as either party may furnish to the other in writing in
      accordance herewith, except that notices of changes of address shall be
      effective only upon receipt.

     

    5.3 Applicable
      Law.
      This contract is entered into under, and shall be governed for all purposes
      by,
      the laws of the State of Texas.

     

    5.4 No
      Waiver.
      No
      failure by either party hereto at any time to give notice of any breach by
      the
      other party of, or to require compliance with, any condition or provision of
      this Agreement shall be deemed a waiver of similar or dissimilar provisions
      or
      conditions at the same or at any prior or subsequent time.

     

    5.5 Severability.
      If a
      court of competent jurisdiction determines that any provision of this Agreement
      is invalid or unenforceable, then the invalidity or unenforceability of that
      provision shall not affect the validity or enforceability of any other provision
      of this Agreement, and all other provisions shall remain in full force and
      effect.

     

    5.6 Counterparts.
      This
      Agreement may be executed in one or more counterparts, each of which shall
      be
      deemed to be original, but all of which together will constitute one and the
      same Agreement.

     

    5.7 Withholding
      of Taxes and Other Employee Deductions.
      Company may withhold from any benefits and payments made pursuant to this
      Agreement all federal, state, city and other taxes as may be required pursuant
      to any law or governmental regulation or ruling and all other normal employee
      deductions made with respect to Company’s employees generally.

     

    5.8 Headings.
      The paragraph headings have been inserted for purposes of convenience and shall
      not be used for interpretive purposes.

     

    5.9 Gender
      and Plurals.
      Wherever the context so requires, the masculine gender includes the feminine
      or
      neuter, and the singular number includes the plural and conversely.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    5.10 Successors.
      This Agreement shall be binding upon and inure to the benefit of Company and
      any
      successor of Company, including without limitation any person, association,
      or
      entity which may hereafter acquire or succeed to all or substantially
      all of
      the
      business or assets of Company by any means whether direct or indirect, by
      purchase, merger, consolidation, or otherwise. Except as provided in the
      preceding sentence, this Agreement, and the rights and obligations
      of the parties hereunder, are personal and neither this Agreement, nor any
      right, benefit or obligation of either party hereto, shall be subject to
      voluntary or involuntary assignment, alienation or transfer, whether by
      operation of law or otherwise, without the prior written consent of the other
      party.

     

    5.11 Term.
      The term of this Agreement is co-extensive with the Term of employment as set
      forth in paragraph 2.1. Termination shall not affect any right or obligation
      of
      any party which is accrued or vested prior to or upon such termination or by
      its
      terms continues following the termination of the Term, including without
      limitation sections 4.6, 4.7, 4.9, 4.10 and 5.1 of this Agreement.

     

    5.12 Entire
      Agreement; Conflict.
      This
      Agreement sets forth the entire agreement of the parties with respect to the
      subject matter hereto. Any modification of this Agreement shall be effective
      only if it is in writing and signed by the party to be charged. In the event
      of
      any conflict between the terms of this Agreement and the terms of any policy,
      plan or program of Company, the terms of this Agreement shall govern.

     

    5.13 Deemed
      Resignations.
      Any
      termination of Executive’s employment shall constitute an automatic resignation
      of Executive as an officer of Company and each affiliate of Company, and an
      automatic resignation of Executive from the Board of Directors and from the
      board of directors of any affiliate of Company, and from the board of directors
      or similar governing body of any corporation, limited liability company or
      other
      entity in which Company or any affiliate holds an equity interest and with
      respect to which board or similar governing body Executive serves as Company’s
      or such affiliate’s designee or other representative.

     

    IN
      WITNESS WHEREOF, the parties hereto have executed this Agreement as of the
      date
      set forth above.

    

      

       

      
        	 	
                TXU
                  CORP.

              	 
	 	 	 
	
                By:

              	
                /s/
                  David A. Campbell

              	 
	
                Name:

              	
                David
                  A. Campbell

              	 
	
                Dated:

              	
                7/16/04

              	 

      

      

       

      
        	 	
                EXECUTIVE

              	 
	 	 	 
	
                Signature:

              	
                /s/
                  Jonathan A. Siegler

              	 
	
                Printed
                  Name:

              	
                Jonathan
                  A. Siegler

              	 
	
                Dated:

              	
                16
                  July 2004

              	 

      

       

    

    

    
      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

    

    

     

    CATEGORY
      III - REIMBURSABLE ITEMS

    

    

    PROPER
      DOCUMENTATION IS REQUIRED FOR ALL EXPENDITURES $25 OR MORE

    

    I. PRE-MOVE
      HOUSE HUNTING

    

    The
      Company will reimburse the following reasonable expenses incurred while
      searching for a new residence:

    

    
      	 	
              1.

            	
              Mileage
                (at the applicable rate) for use of the employee’s personal vehicle,
                or

            

    

    
      	 	
              2.

            	
              Coach
                air fare and rent car for new employee and spouse,
                and

            

    

    
      	 	
              3.

            	
              Reasonable
                cost of meals and lodging for new employee and spouse not to exceed
                three
                (3) nights lodging and four (4) days
                meals.

            

    

    

    II. TRAVEL
      FROM OLD TO NEW LOCATION

    

    The
      Company will reimburse the following reasonable expenses incurred in moving
      from
      the old principal place of residence to the new principal place of
      residence:

    

    
      	 	
              1.

            	
              Mileage
                (at the applicable) rate for two (2) personal vehicles, and
                

            

    

    
      	 	
              2.

            	
              Reasonable
                cost of meals and lodging for new employee, spouse and legal dependents
                while in transit.

            

    

    
III. TRANSPORTATION
      OF HOUSEHOLD GOODS AND PERSONAL EFFECTS

    

    The
      expenses the Company will pay regarding the new employee’s move from the old
      location to the new location include the following:

    

    
      	 	
              1.

            	
              Packing
                and unpacking,

            

    

    
      	 	
              2.

            	
              Shipping,

            

    

    
      	 	
              3.

            	
              Insurance
                to cover reasonable replacement value of goods and personal
                effects,

            

    

    
      	 	
              4.

            	
              Appliance
                service,

            

    

    
      	 	
              5.

            	
              Rental
                trailers and vehicles (with prior
                approval),

            

    

    
      	 	
              6.

            	
              Mileage
                (at applicable rate) for personal vehicle when used to pull
                trailer,

            

    

    
      	 	
              7.

            	
              With
                the prior approval of the Company, the new employee will be reimbursed
                for
                up to one (1) month’s storage cost on ordinary household
                goods.

            

    

    

    

    

    Selection
      of the mover is at the discretion of the Company. The Company will not
      pay for
      the removal or installation of antennas, transportation of livestock, boats,
      campers, vacation-type mobile homes, cord wood or out-buildings. At the
      Company’s discretion, other unusual items may be disallowed as reimbursable.
ANY
      EXPENSES PAYABLE BY THE MILITARY ARE EXCLUDED.

    

    
      	 	
              1.

            	
              If
                a mobile home is the primary residence, the Company will pay certain
                expenses incurred in moving the mobile home to the new
                location.

            

    

    

    
      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

    

    

    

    IV. TEMPORARY
      LIVING

    

    
      	 	
              1.

            	
              If
                the new employee is required to begin work prior to the availability
                of
                permanent residence, the Company will reimburse the employee for
                the
                reasonable cost of lodging only for the new employee, spouse, and
                legal
                dependents.

            

    

    

    
      	 	
              2.

            	
              The
                total number of lodging nights under Plan Section II and Plan Section
                IV
                combined will not exceed thirty (30)
                days.

            

    

    

    V.
       PURCHASE
      EXPENSE OF NEW RESIDENCE

    

    The
      Company will reimburse the following expenses if paid by the new employee and
      if
      the new employee relocates to the new location within one (1) year of their
      employment date:

    

    
      	 	
              1.

            	
              Attorney
                fee

            

    

    
      	 	
              2.

            	
              Escrow
                fee

            

    

    
      	 	
              3.

            	
              Title
                policy cost

            

    

    
      	 	
              4.

            	
              Survey
                cost

            

    

    
      	 	
              5.

            	
              Credit
                report fee

            

    

    
      	 	
              6.

            	
              Appraisal
                fee

            

    

    
      	 	
              7.

            	
              Recording
                or transfer fee

            

    

    
      	 	
              8.

            	
              Filing
                fee

            

    

    
      	 	
              9.

            	
              Termite
                Inspection

            

    

    
      	 	
              10.

            	
              Underwriters
                fee

            

    

    
      	 	
              11.

            	
              Funding
                fee (VA only)

            

    

    
      	 	
              12.

            	
              Structural
                inspection

            

    

    
      	 	
              13.

            	
              Normal
                market based discount points

            

    

    
      	 	
              14.

            	
              Loan
                origination or loan commitment fee

            

    

    
      	 	
              15.

            	
              Assumption
                fee

            

    

    

    Discount
      points, loan origination fee, loan commitment fee and assumption fee will be
      reimbursed on the basis of actual fee not to exceed two and half (2.5) points.
      No buy down points will be reimbursed. A closing statement must be provided
      before expenses are reimbursed.

    

    VI. SALE
      OF OLD RESIDENCE

    

    A
      new
      employee who sells their residence at the old location within one (1) year
      of
      their employment date may, subject to entering into an employment agreement
      (a
      copy of which is attached) receive reimbursements for expenses reasonably
      incurred in the sale of their residence as follows:

    

    

    
      	 	
              1.

            	
              Real
                estate commission (if real estate agent
                used)

            

    

    
      	 	
              2.

            	
              Escrow
                fee

            

    

    
      	 	
              3.

            	
              Title
                insurance policy

            

    

    
      	 	
              4.

            	
              Appraisal
                fee

            

    

    
      	 	
              5.

            	
              Advertising
                cost (newspaper)

            

    

    
      	 	
              6.

            	
              Attorney
                fee

            

    

    
      	 	
              7.

            	
              Recording
                and transfer fee

            

    

    
      	 	
              8.

            	
              Prepayment
                penalty ($500 limit)

            

    

    
      	 	
              9.

            	
              Termite
                inspection

            

    

    
      	 	
              10.

            	
              Normal
                market based seller discount points

            

    

    
      	 	
              11.

            	
              Tax
                and abstract certificates

            

    

    

    Employee
      must provide closing statement before expenses will be reimbursed.

    

    
      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

    

    

    

    VII. RESIDENCE
      WITH SURROUNDING ACREAGE

    

    The
      Company will reimburse expenses incurred in connection with the sale and/or
      purchase of properties as provided in Section V and Section VI hereof. In the
      event that the transaction involves a principal residence with an adjoining
      tract of land in excess of five (5) acres, the Company will only reimburse
      the
      portion of the expenses which bear the same relationship to the total expenses
      as the appraised value of the residence and surrounding five acres bears to
      total appraised value of the property. For purposes of determining the appraised
      value, an appraiser will be selected who is acceptable to both the new employee
      and the Company.

    

    VIII. MORTGAGE
      INTEREST DIFFERENTIAL (MID)

    

    Mortgage
      Interest Differential (MID) will be available at such time when the current
      30
      year interest rate (nationally) exceeds twelve percent (12%).

    

    In
      the
      event the employee has a mortgage loan on the old residence and purchases a
      replacement home at the new location with the mortgage loan which bears a higher
      rate of interest, the Company will pay a MID to the employee. This MID will
      be
      derived by multiplying the mortgage balance on the former house or new house
      (whichever is less) by the difference in interest rates, less 1% between the
      old
      and new mortgages. These payments will be reimbursed over a three (3) year
      period in equal annual payments.

    

    In
      order
      to qualify for MID, the new employee must complete property documentation and
      attach supporting papers to verify balances and interest rates at both the
      old
      and new location.

    

    

    Example
      of computation:

    

      
        	
                MORTGAGE
                  BALANCE ON

                FORMER
                  OR NEW HOME

                WHICHEVER
                  IS LESS

              	
                INTEREST
                  RATE DIFFERENTIAL 

                OLD
                  8% -NEW 12%

              	
                ANNUAL

                REIMBURSEMENT

                FOR
                  THREE (3) YEARS

              
	
                $40,000

              	
                x
                  4% - 1% - 3% =

              	
                $1,200

              

      

    

    

    Amount
      paid to employee, as “other earnings” annually for three (3) years will be
      $1,200.

    

    No
      payment will be made after the earlier of the following:

    - Expiration
      of the three (3) year period

    - The
      employee terminates employment, or 

    - The
      new
      loan is paid off,

    
      -
The
        employee sells the home (unless the sale is the result of a Company requested
        transfer of the affected employee).

       

    

    The
      employee shall promptly report any event to the H.R. Department, which would
      result in termination or change of payments. A change in the new mortgage
      interest rate (i.e., refinance or variable interest rate) during the MID
      reimbursement period will result in a change in the MID payments. Annual
      verification will be made prior to payments.

    

    
      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

    

    

    

    

    IX. LEASE
      CANCELLATION

    

    If
      you
      are unable to break your rental or lease agreement in the old location, the
      Company will provide you with lease cancellation assistance of up to the amount
      of three (3) month’s rent. You must provide proper documentation (lease
      agreement outlining lease breaking features and related receipts) of these
      expenses. You will not be reimbursed for informal agreements, security/damage
      or pet deposits.

    

    

    X. EMPLOYEE
      TAX WITHHOLDING ALLOWANCE

    

    The
      taxable portion of the expenses reimbursed to or paid on behalf of the employee
      by the Plan will be increased by 36% and added to the employee’s payroll check.
      Please be aware that this increase (commonly referred to as a tax gross up)
      is
      designed to assist you with the income tax implications of the relocation
      benefits paid to you on your behalf.

    

    However,
      this provision will not make you whole.
      In
      other words, when the grossed up amount is processed by payroll, taxes are
      withheld at a flat rate on the total amount. This calculation will result in
      an
      approximate reimbursement of 88.8% of the original dollar amount requested.
      If
      you have questions, please contact Payroll or your HR Relocation
      Representative.

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