Document:

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                                                                   EXHIBIT 10.33

                                                                  CONFORMED COPY
                                                                   INCLUDING ALL
                                                                AMENDMENTS AS OF
                                                                   FEBRUARY 2003

                            BURLINGTON RESOURCES INC.

                       1997 EMPLOYEE STOCK INCENTIVE PLAN

                               SECTION 1. PURPOSE

         The purpose of the Burlington Resources Inc. 1997 Employee Stock
Incentive Plan (the "Plan") is to promote the interests of Burlington Resources
Inc. (the "Company") and its stockholders by strengthening the Company's ability
to attract and retain employees in the employ of the Company and its
Subsidiaries by furnishing suitable recognition of their ability and industry
which contributed materially to the success of the Company and to align the
interests and efforts of such employees to the long term interests of the
Company's stockholders. The Plan provides for the grant of nonqualified stock
options and restricted stock in accordance with the terms and conditions set
forth below.

                             SECTION 2. DEFINITIONS

         Unless otherwise required by the context, the following terms when used
in the Plan shall have the meanings set forth in this Section 2:

         2.1      BENEFICIARY

         The Participant's legal representative, estate or the person or persons
to whom the Participant's rights under the Plan shall have passed by will or the
laws of descent and distribution.

         2.2      BOARD OF DIRECTORS

         The Board of Directors of the Company.

         2.3      CAUSE

         A termination for Cause is a termination in accordance with the
Company's or Subsidiary's personnel policies concerning "cause" as in effect
from time to time.

         2.4      CHANGE IN CONTROL

         A "Change in Control" shall mean the occurrence of any of the
following:

                  (a)      An acquisition (other than directly from the Company)
of any voting securities of the Company (the "Voting Securities") by any
"Person" (as the term person is used
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for purposes of Section 13(d) or 14(d) of the Securities Exchange Act of 1934,
as amended (the "Exchange Act")), immediately after which such Person has
"Beneficial Ownership" (within the meaning of Rule 13d-3 promulgated under the
Exchange Act) of twenty percent (20%) or more of the then outstanding shares of
its common stock ("Shares") or the combined voting power of the Company's then
outstanding Voting Securities; provided, however, in determining whether a
Change in Control has occurred pursuant to this Section 2.7(a), Shares or Voting
Securities which are acquired in a "Non-Control Acquisition" (as hereinafter
defined) shall not constitute an acquisition which would cause a Change in
Control. A "Non-Control Acquisition" shall mean an acquisition by (i) an
employee benefit plan (or a trust forming a part thereof) maintained by (A) the
Company or (B) any corporation or other Person of which a majority of its voting
power or its voting equity securities or equity interest is owned, directly or
indirectly, by the Company (for purposes of this definition, a "Related
Entity"), (ii) the Company or any Related Entity, or (iii) any Person in
connection with a "Non-Control Transaction" (as hereinafter defined).

                  (b)      The consummation of:

                           (i)      A merger, consolidation or reorganization
with or into the Company or in which securities of the Company are issued ( a
"Merger"), unless such Merger is a "Non-Control Transaction." A "Non-Control
Transaction" shall mean a Merger where:

                                    (A)     the stockholders of the Company,
         immediately before such Merger own directly or indirectly immediately
         following such Merger at least fifty percent (50%) of the combined
         voting power of the outstanding voting securities of (x) the
         corporation resulting from such Merger (the "Surviving Corporation") if
         fifty percent (50%) or more of the combined voting power of the then
         outstanding voting securities of the Surviving Corporation is not
         Beneficially Owned, directly or indirectly by another Person (a "Parent
         Corporation"), or (y) if there is one or more Parent Corporations, the
         ultimate Parent Corporation;

                                    (B)     the individuals who were members of
         the Incumbent Board (as hereinafter defined) immediately prior to the
         execution of the agreement providing for such Merger constitute at
         least a majority of the members of the board of directors of (x) the
         Surviving Corporation, if there is no Parent Corporation, or (y) if
         there is one or more Parent Corporations, the ultimate Parent
         Corporation; and

                                    (C)     no Person other than (1) the
         Company, (2) any Related Entity, (3) any employee benefit plan (or any
         trust forming a part thereof) that, immediately prior to such Merger,
         was maintained by the Company or any Related Entity, or (4) any Person
         who, immediately prior to such Merger, had Beneficial Ownership of
         twenty percent (20%) or more of the then outstanding Voting Securities
         or Shares has Beneficial Ownership of twenty percent (20%) or more of
         the combined voting power of the outstanding voting securities or
         common stock of (x) the Surviving Corporation if there is no Parent
         Corporation, or (y) if there is one or more Parent Corporations, the
         ultimate Parent Corporation;

                           (ii)     A complete liquidation or dissolution of the
Company; or

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                           (iii)    The sale or other disposition of all or
substantially all of the assets of the Company to any Person (other than a
transfer to a Related Entity or under conditions that would constitute a
Non-Control Transaction with the disposition of assets being regarded as a
Merger for this purpose or the distribution to the Company's stockholders of the
stock of a Related Entity or any other assets).

                  (c)      The individuals who, as of the Effective Date, are
members of the Board (the "Incumbent Board") cease for any reason to constitute
at least a majority of the members of the Board or, following a Merger which
results in a Parent Corporation, the board of directors of the ultimate Parent
Corporation; provided, however, that if the election, or nomination for election
by the Company's common stockholders, of any new director was approved by a vote
of at least two-thirds of the Incumbent Board, such new director shall, for
purposes of this Plan, be considered as a member of the Incumbent Board;
provided further, however, that no individual shall be considered a member of
the Incumbent Board if such individual initially assumed office as a result of
either an actual or threatened "Election Contest" (as described in Rule 14a-11
promulgated under the Exchange Act) or other actual or threatened solicitation
of proxies or consents by or on behalf of a Person other than the Board (a
"Proxy Contest") including by reason of any agreement intended to avoid or
settle any Election Contest or Proxy Contest.

Notwithstanding the foregoing, a Change in Control shall not be deemed to occur
solely because any Person (the "Subject Person") acquired Beneficial Ownership
of more than the permitted amount of the then outstanding Shares or Voting
Securities as a result of the acquisition of Shares or Voting Securities by the
Company which, by reducing the number of Shares or Voting Securities then
outstanding, increases the proportional number of shares Beneficially Owned by
the Subject Persons, provided that if a Change in Control would occur (but for
the operation of this sentence) as a result of the acquisition of Shares or
Voting Securities by the Company, and after such share acquisition by the
Company, the Subject Person becomes the Beneficial Owner of any additional
Shares or Voting Securities which increase the percentage of the then
outstanding Shares or Voting Securities Beneficially Owned by the Subject
Person, then a Change in Control shall occur.

         2.5      CHIEF EXECUTIVE OFFICER

         The Chief Executive Officer of the Company.

         2.6      CODE

         The Internal Revenue Code of 1986, as amended and in effect from time
to time, and the temporary or final regulations of the Secretary of the U.S.
Treasury adopted pursuant thereto.

         2.7      COMMITTEE

         The Compensation and Nominating Committee of the Board of Directors.

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         2.8      COMMON STOCK

         The Common Stock of the Company, par value $.01 per share, or such
other class of shares or other securities as may be applicable pursuant to the
provisions of Section 5.

         2.9      FAIR MARKET VALUE

         As applied to a specific date, the mean between the highest and lowest
quoted selling prices at which Common Stock was sold on such date as reported in
the NYSE-Composite Transactions by The Wall Street Journal on such date or, if
no Common Stock was traded on such date, on the next preceding day on which
Common Stock was so traded.

         2.10     OPTION

         An option granted under the Plan which shall not be an incentive stock
option within the meaning of Section 422 of the Code.

         2.11     OPTION PRICE

         The price per share of Common Stock at which each Option is
exercisable.

         2.12     PARTICIPANT

         An eligible employee of the Company or a Subsidiary to whom an Option
or Restricted Stock is granted under the Plan as set forth in Section 4.

         2.13     PERMANENT DISABILITY

         A Participant shall be deemed to have a Permanent Disability for
purposes of the Plan if the Plan Administrator shall find upon the basis of
medical evidence satisfactory to it that the Participant is totally disabled,
whether due to a physical or mental condition, so as to be prevented from
engaging in further employment by the Company or any Subsidiary, and that such
disability will be permanent and continuous during the remainder of the
Participant's life.

         2.14     PLAN ADMINISTRATOR

         The Chief Executive Officer or the committee appointed pursuant to
Section 3 to administer the Plan.

         2.15     RESTRICTED STOCK

         Common Stock granted under the Plan that is subject to the requirements
of Section 7 and such other restrictions as the Plan Administrator deems
appropriate.

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         2.16     SUBSIDIARY

         An entity, including, without limitation, a corporation, limited
liability company or a joint venture, in which the Company owns (directly or
indirectly) a significant equity interest and which entity is designated by the
Plan Administrator as a subsidiary for purposes of the Plan.

                            SECTION 3. ADMINISTRATION

         3.1      The Plan shall be administered by the Chief Executive Officer
or, in the event and to the extent the Chief Executive Officer shall appoint
and/or authorize a committee or committees to administer the Plan, by such
committee or committees. The administrator of the Plan shall hereinafter be
referred to as the "Plan Administrator."

         In the event a member of the committee may be eligible, subject to the
restrictions set forth in Section 4, to participate in or receive or hold
Options or Restricted Stock under the Plan, no member of the committee shall
vote with respect to the granting of Options or Restricted Stock hereunder to
himself or herself, as the case may be.

         The members of any committee serving as Plan Administrator shall be
appointed by the Chief Executive Officer for such term as the Chief Executive
Officer may determine. The Chief Executive Officer may from time to time remove
members from, or add members to, the committee. Vacancies on the committee,
however caused, may be filled by the Chief Executive Officer.

         3.2      Except for the terms and conditions explicitly set forth in
the Plan, the Plan Administrator shall have full authority to construe and
interpret the Plan, to establish, amend and rescind rules and regulations
relating to the Plan, to administer the Plan and to take all such steps and make
all such determinations in connection with the Plan and the Options and
Restricted Stock granted hereunder as it may deem necessary or advisable, which
determination shall be final and binding upon all Participants. The Plan
Administrator shall cause the Company at its expense to take any action related
to the Plan which may be required or necessary to comply with the provisions of
any federal or state law or any regulations issued thereunder.

         3.3      The Committee, the Chief Executive Officer and members of any
committee acting under the Plan shall be fully protected in relying in good
faith upon the advice of counsel and shall incur no liability except for gross
negligence or willful misconduct in the performance of their duties.

                             SECTION 4. ELIGIBILITY

         To be eligible for selection to receive a grant of an Option or
Restricted Stock under the Plan, an individual must be, as of the date on which
such Option or Restricted Stock is granted,

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(i) an employee of the Company or a Subsidiary and (ii) ineligible to receive a
grant or award under the 1993 Burlington Resources Inc. Stock Incentive Plan or
any successor plan.

                    SECTION 5. SHARES AVAILABLE FOR THE PLAN

         5.1      Subject to Section 5.3 and in addition to any substitute
Options granted pursuant to Section 6.2(k), (i) the maximum number of shares for
which Options and Restricted Stock may be granted under the Plan on and after
April 17, 2002 is 5,000,000 shares of Common Stock and (ii) the maximum number
of shares for which Options and Restricted Stock may be granted under the Plan
in any calendar year is 1,500,000 shares of Common Stock. Shares of Common Stock
issued under the Plan may be treasury shares or authorized but unissued shares
of the Company, or both, as determined by the Board of Directors.

         5.2      Notwithstanding the foregoing, and subject to Section 5.3, the
number of shares for which Restricted Stock may be granted under the Plan in any
calendar year may not exceed 150,000 shares of Common Stock.

         5.3      In the event of a recapitalization, stock split, stock
dividend, exchange of shares, merger, reorganization, change in corporate
structure or shares of the Company or similar event, the Board of Directors,
upon the recommendation of the Plan Administrator, may make appropriate
adjustments in the number of shares authorized for the Plan, and, with respect
to outstanding Options and Restricted Stock, the Plan Administrator may make
appropriate adjustments in the number of shares and the Option Price.

                            SECTION 6. STOCK OPTIONS

         6.1      Options may be granted to eligible employees in such number
and at such times during the term of the Plan as the Committee shall determine,
taking into account the duties of the respective employees, their present and
potential contributions to the success of the Company, and such other factors as
the Committee shall deem relevant in accomplishing the purposes of the Plan. The
granting of an Option shall take place when the Committee by resolution, written
consent or other appropriate written action determines to grant such an option
to a particular Participant at a particular price. Each Option shall be
evidenced by a written instrument delivered by or on behalf of the Company
containing provisions not inconsistent with the Plan.

         6.2      All Options under the Plan shall be granted subject to the
following terms and conditions:

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                  (a)      OPTION PRICE

                  The Option Price shall be determined by the Committee at the
         time of grant, but shall not be less than 100% of the Fair Market Value
         of the Common Stock on the date the Option is granted.

                  (b)      DURATION OF OPTIONS

                  Options shall be exercisable at such time and under such
         conditions as set forth in the option grant, but in no event shall any
         Option be exercisable later than the tenth anniversary of the date of
         its grant.

                  (c)      EXERCISE OF OPTIONS

                  Subject to Section 6.2(j), an optionee may not exercise an
         Option until he or she has completed one year of continuous employment
         with the Company or one of its Subsidiaries from and including the date
         on which the Option is granted, or such longer period as the Committee
         may determine in a particular case. This requirement is waived in the
         event of death or Permanent Disability of an optionee before such
         period of continuous employment is completed. Thereafter, shares of
         Common Stock covered by an Option, to the extent then vested, may be
         purchased at one time (but not in installments) during the option
         period as may be provided in the option grant. To the extent that the
         right to purchase shares has vested thereunder, such vested Options may
         be exercised by written notice to the Company.

                  (d)      PAYMENT

                  The Option Price of shares purchased under Options shall be
         paid in full to the Company upon the exercise of the Option by delivery
         of consideration equal to the product of the Option Price and the
         number of shares purchased. Such consideration may be either (i) in
         cash or check acceptable to the Company or (ii) at the discretion of
         the Plan Administrator, in Common Stock already owned by the
         Participant for at least six months, or any combination of cash and
         such Common Stock. The Fair Market Value of such Common Stock as
         delivered shall be valued as of the day prior to delivery. The Plan
         Administrator can determine at the time the Option is granted that
         additional forms of payment will be permitted. To the extent permitted
         by the Plan Administrator and applicable laws and regulations
         (including, but not limited to, federal tax and securities laws and
         regulations and state corporate law), an Option may also be exercised
         by delivery of a properly executed exercise notice together with
         irrevocable instructions to a broker to promptly deliver to the Company
         the amount of sale or loan proceeds to pay the Option Price of shares
         purchased under the Option and any applicable withholding taxes.

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                  (e)      RESTRICTIONS

                  The Plan Administrator shall determine and reflect in the
         Option grant, with respect to each Option, the nature and extent of the
         restrictions, if any, to be imposed on the shares of Common Stock which
         may be purchased thereunder, including, but not limited to,
         restrictions on the transferability of such shares acquired through the
         exercise of such Options for such periods as the Plan Administrator may
         determine.

                  (f)      NONTRANSFERABILITY OF OPTIONS

                  Except as provided below, during a Participant's lifetime, an
         Option may be exercisable only by the Participant and Options granted
         under the Plan and the rights and privileges conferred thereby shall
         not be subject to execution, attachment or similar process and may not
         be transferred, assigned, pledged or hypothecated in any manner
         (whether by operation of law or otherwise) other than by will or by the
         applicable laws of descent and distribution. The Plan Administrator or
         the Committee, in its sole discretion, may, from time to time, permit
         the transfer of Options by Participants on such terms and conditions as
         the Plan Administrator or the Committee may establish. Any attempt to
         transfer, assign, pledge, hypothecate or otherwise dispose of any
         Option under the Plan or of any right or privilege conferred thereby,
         contrary to the provisions of the Plan, or the sale or levy or any
         attachment or similar process upon the rights and privileges conferred
         hereby, shall be null and void.

                  (g)      PURCHASE FOR INVESTMENT

                  The Plan Administrator shall have the right to require that
         each Participant or other person who shall exercise an Option under the
         Plan, and each person into whose name shares of Common Stock shall be
         issued pursuant to the exercise of an Option, represent and agree that
         any and all shares of Common Stock purchased pursuant to such Option
         are being purchased for investment only and not with a view to the
         distribution or resale thereof and that such shares will not be sold
         except in accordance with such restrictions or limitations as may be
         set forth in the option. This Section 6.2(g) shall be inoperative
         during any period of time when the Company has obtained all necessary
         or advisable approvals from governmental agencies and has completed all
         necessary or advisable registrations or other qualifications of shares
         of Common Stock as to which Options may from time to time be granted as
         contemplated in Section 8.

                  (h)      TERMINATION OF EMPLOYMENT

                  Upon the termination of a Participant's employment with the
         Company and all Subsidiaries for any reason other than death or
         Permanent Disability, the Participant's Option shall be exercisable
         only to the extent that it was then exercisable and, unless the term of
         the Option expires sooner, such Option shall expire according to the
         following schedule; provided, however, that the Plan Administrator or
         the Committee may at any

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         time determine in a particular case that specific limitations and
         restrictions under the Plan shall not apply:

                           (i)      DISABILITY OR RETIREMENT

                           The Option shall expire, unless exercised, 12 months
                  after the Participant's Permanent Disability or retirement
                  from the Company or any Subsidiary.

                           (ii)     INVOLUNTARY TERMINATION BY THE COMPANY

                           The Option shall expire, unless exercised, three
                  months after a Participant is terminated as an employee by the
                  Company or any Subsidiary for any reason other than Cause.

                           (iii)    TERMINATION FOLLOWING A CHANGE IN CONTROL

                           The Option shall expire, unless exercised, within 12
                  months of a Participant's termination of employment (other
                  than a termination by the Company or a Subsidiary for Cause)
                  following a Change in Control, provided that said termination
                  of employment occurs on or within two years following a Change
                  in Control.

                           (iv)     ALL OTHER TERMINATIONS (EXCEPT DEATH)

                           Except as provided in subparagraphs (i), (ii) and
                  (iii) above or in Section 6.2(i) below, the Option shall
                  expire upon a Participant's termination of employment with the
                  Company and its Subsidiaries, regardless of the reason for
                  such termination.

                  Leaves of absence for such period and purposes conforming to
         the personnel policy of the Company or of its Subsidiaries, as
         applicable, shall not be deemed terminations or interruptions of
         employment.

                  (i)      DEATH OF PARTICIPANT

                  Upon the death of a Participant during the Participant's
         period of employment, the Option shall expire, unless the term of the
         Option expires sooner, 12 months after the date of the Participant's
         death, unless the Option is exercised within such 12 month period by
         the Participant's Beneficiary; provided, however, that the Plan
         Administrator may determine in a particular case that specific
         limitations and restrictions under the Plan shall not apply.

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                  (j)      CHANGE IN CONTROL

                  Notwithstanding other Plan provisions pertaining to the times
         at which Options may be exercised, all outstanding Options, to the
         extent not then currently exercisable, shall become exercisable in full
         upon the occurrence of a Change in Control; provided, that the Plan
         Administrator or the Committee may determine that such acceleration
         will not occur if it would render unavailable "pooling of interest"
         accounting treatment for any reorganization, merger or consolidation of
         the Company.

                  (k)      MERGERS AND ACQUISITIONS

                  Notwithstanding the foregoing, Options may be granted by the
         Chief Executive Officer from time to time in substitution for stock
         options held by employees of other corporations who become employees of
         the Company or a Subsidiary as the result of a merger or consolidation,
         or the acquisition by the Company or Subsidiary of the assets or stock
         of the employing corporation. The terms and conditions of substitute
         Options granted may vary from the terms and conditions set forth above,
         to the extent the Committee deems it appropriate.

                  (l)      RIGHTS AS STOCKHOLDER

                  A Participant shall have none of the rights of a stockholder
         until the shares of Common Stock are issued to the Participant.

                  (m)      TERM LIMIT

                  Notwithstanding other Plan provisions pertaining to the times
         at which Options may be exercised, no Option shall continue to be
         exercisable pursuant to Section 6.2(h) or Section 6.2(i) at a time that
         would violate the maximum duration of Section 6.2(b).

                           SECTION 7. RESTRICTED STOCK

         7.1      Restricted Stock may be granted to eligible employees in such
number and at such times during the term of the Plan as the Committee (or the
Chief Executive Officer acting pursuant to Section 7.8) shall determine, taking
into account the duties of the respective Participants, their present and
potential contributions to the success of the Company, and such other factors as
the Committee or the Chief Executive Officer, as the case may be, shall deem
relevant in accomplishing the purposes of the Plan. The granting of Restricted
Stock shall take place when the Committee (or the Chief Executive Officer acting
pursuant to Section 7.8) by resolution, written consent or other appropriate
written action determines to grant such Restricted Stock to a particular
Participant. Each grant shall be evidenced by a written instrument delivered

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by or on behalf of the Company containing provisions not inconsistent with the
Plan. The Participant receiving a grant of Restricted Stock shall be recorded as
a stockholder of the Company and, subject to the provisions hereof, shall have
all the rights of a stockholder with respect to such shares, including the right
to vote the shares and receive all dividends or other distributions made or paid
with respect to such shares; provided, however, that the shares themselves, and
any new, additional or different shares or securities which the Participant may
be entitled to receive with respect to such shares by virtue of a stock split or
stock dividend or any other change in the corporate or capital structure of the
Company, shall be subject to the restrictions hereinafter described.

         7.2      A grant of Restricted Stock shall entitle a Participant to
receive, on the date or dates designated by the Committee or the Chief Executive
Officer, as the case may be, upon payment to the Company of consideration
determined by the Committee or the Chief Executive Officer, as the case may be,
which consideration shall be at least equal to the par value of the Common
Stock, in a manner determined by the Committee or the Chief Executive Officer,
as the case may be, the number of shares of Common Stock selected by the
Committee or the Chief Executive Officer, as the case may be. The certificates
for Restricted Stock granted under the Plan shall be held in custody by a bank
or other institution, or by the Company until the Restriction Period (as defined
in Section 7.3) expires or until restrictions thereon otherwise lapse.

         7.3      During a period of years following the date of grant, as
determined by the Committee or the Chief Executive Officer, as the case may be,
which shall in no event be less than one year (the "Restriction Period"), the
Restricted Stock may not be sold, assigned, transferred, pledged, hypothecated
or otherwise encumbered or disposed of by the recipient, except in the event of
death or Permanent Disability, the waiver or modification of such restrictions
by the Committee or the Chief Executive Officer, as the case may be, in the
agreement evidencing the grant of Restricted Stock or by written resolution of
the Committee or the Chief Executive Officer, as the case may be, adopted at any
time.

         7.4      Except as provided in Section 7.5 or 7.6, if a Participant
terminates employment with the Company and its Subsidiaries for any reason
before the expiration of the Restriction Period, all shares of Restricted Stock
still subject to restriction shall be forfeited by the Participant to the
Company. In addition, in the event of any attempt by the Participant to sell,
exchange, transfer, pledge or otherwise dispose of shares of Restricted Stock in
violation of the terms of the Plan, such shares shall be forfeited to the
Company.

         7.5      The Restriction Period for any Participant shall be deemed to
end and all restrictions on shares of Restricted Stock shall lapse upon the
Participant's death or Permanent Disability or any termination of employment
determined by the Committee or the Chief Executive Officer, as the case may be,
to end the Restriction Period.

         7.6      The Restriction Period for any Participant shall be deemed to
end and all restrictions on shares of Restricted Stock shall terminate
immediately upon a Change in Control.

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         7.7      When the restrictions imposed by Section 7.3 expire or
otherwise lapse with respect to one or more shares of Restricted Stock, the
Company shall deliver to the Participant (or the Participant's Beneficiary) one
share of Common Stock for each share of Restricted Stock. At that time, the
written instrument referred to in Section 7.1, as it relates to such shares,
shall be terminated.

         7.8      Of the shares of Restricted Stock authorized under Section 5.2
of the Plan, up to an aggregate of 25,000 shares of Common Stock may be granted
by the Chief Executive Officer in any calendar year as fully paid and
non-assessable on the terms and conditions set forth in this Section 7;
provided, however, that the maximum grant to any individual will be limited to
1,000 shares of Restricted Stock.

                   SECTION 8. REGULATORY APPROVALS AND LISTING

         8.1      The Company shall not be required to issue any certificate for
shares of Common Stock upon the exercise of an Option granted under the Plan
prior to:

                  (a)      the obtaining of any approval or ruling from the
         Securities and Exchange Commission, the Internal Revenue Service or any
         other governmental agency which the Company, in its sole discretion,
         shall determine to be necessary or advisable;

                  (b)      the listing of such shares on any stock exchange on
         which the Common Stock may then be listed; or

                  (c)      the completion of any registration or other
         qualification of such shares under any federal or state laws, rulings
         or regulations of any governmental body which the Company, in its sole
         discretion, shall determine to be necessary or advisable.

         8.2      All certificates for shares issued in respect of Restricted
Stock awards shall be subject to such stop-transfer orders and other
restrictions as the Plan Administrator may deem advisable under the rules,
regulations and other requirements of the Securities and Exchange Commission,
any stock exchange upon which Common Stock is then listed and any applicable
federal or state securities laws, and the Plan Administrator may cause a legend
or legends to be placed on any such certificates to make appropriate reference
to such restrictions. The foregoing provisions of this Section 8.2 shall not be
effective if and to the extent that the shares of Common Stock delivered under
the Plan are covered by an effective and current registration statement under
the Securities Act of 1933, as amended, or if and so long as the Plan
Administrator determines that application of such provisions is no longer
required or desirable. In making such determination, the Plan Administrator may
rely upon an opinion of counsel for the Company.

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                 SECTION 9. EFFECTIVE DATE AND TERM OF THE PLAN

         The Plan shall become effective upon its adoption by the Board of
Directors and shall continue until terminated by the Board of Directors or the
Committee.

                         SECTION 10. GENERAL PROVISIONS

         10.1     Nothing contained in the Plan, or in any Option or Restricted
Stock granted pursuant to the Plan, shall confer upon any employee any right
with respect to continuance of employment by the Company or a Subsidiary, or
interfere in any way with the right of the Company or a Subsidiary to terminate
the employment of such employee at any time with or without assigning any reason
therefor.

         10.2     Grants, vesting or payment of Options or Restricted Stock
shall not be considered as part of a Participant's salary or used for the
calculation of any other pay, allowance, pension or other benefit unless
otherwise permitted by other benefit plans provided by the Company or a
Subsidiary, or required by law or by contractual obligations of the Company or a
Subsidiary.

         10.3     The right of a Participant or Beneficiary to the payment of
any compensation under the Plan may not be assigned, transferred, pledged or
encumbered, nor shall such right or other interests be subject to attachment,
garnishment, execution or other legal process.

         10.4     Leaves of absence for such periods and purposes conforming to
the personnel policy of the Company or a Subsidiary, as applicable, shall not be
deemed terminations or interruptions of employment.

         10.5     Subject to Section 6.2(h) in the event a Participant is
transferred from the Company to a Subsidiary, or vice versa, or is promoted or
given different responsibilities, the Options and/or Restricted Stock granted to
the Participant prior to such date shall not be affected.

         10.6     The Plan shall be construed and governed in accordance with
the laws of the State of Delaware, except that it shall be construed and
governed in accordance with applicable federal law in the event that such
federal law preempts state law.

         10.7     Appropriate provision shall be made for all taxes required to
be withheld in connection with the exercise, grant or other taxable event with
respect to Options and Restricted Stock under the applicable laws or regulations
of any governmental authority, whether federal, state or local and whether
domestic or foreign. Unless otherwise provided in the option grant, a
Participant is permitted to deliver shares of Common Stock (including shares
acquired pursuant to the exercise of an Option other than the Option currently
being exercised, to the extent permitted by applicable regulations) for payment
of withholding taxes on the exercise of an Option or upon the vesting of the
Restricted Stock. The Fair Market Value of such Common Stock as delivered shall
be valued as of the day prior to delivery. At the election of the Plan
Administrator or, subject to approval of the Plan Administrator at its sole
discretion, at the

                                      -13-
<PAGE>
election of a Participant, shares of Common Stock may be withheld from the
shares issuable to the optionee upon exercise of an Option or upon the vesting
of the Restricted Stock to satisfy tax withholding obligations. The Fair Market
Value of such Common Stock as is withheld shall be valued as of the day prior to
exercise of the option, or the vesting of the Restricted Stock.

                      SECTION 11. AMENDMENT, TERMINATION OR
                           DISCONTINUANCE OF THE PLAN

         11.1     The Board of Directors and the Committee may from time to time
make such amendments to the Plan as it may deem proper and in the best interest
of the Company, including, but not limited to, any amendment necessary to ensure
that the Company may obtain any regulatory approval referred to in Section 8;
provided, however, that an amendment which increases the number of shares of
Common Stock that may be granted under the Plan, changes the class of employees
eligible to receive awards or grants, or changes the type of awards or grants
that may be made under the Plan may only be made by the Board of Directors;
provided further, however, that no change in any Option or Restricted Stock
theretofore granted may be made without the consent of the Participant which
would impair the right of the Participant to acquire or retain Common Stock that
the Participant may have acquired as a result of the Plan.

         11.2     The Board of Directors may at any time suspend the operation
of or terminate the Plan with respect to any shares of Common Stock or rights
not at the time subject to any Option or grant of Restricted Stock.

                                      -14-<PAGE>

                                                                    EXHIBIT 10.3

                          TRANSITION SERVICES AGREEMENT

                                     between

                            CENTERPOINT ENERGY, INC.

                                       and

                           TEXAS GENCO HOLDINGS, INC.

<PAGE>

                          TRANSITION SERVICES AGREEMENT

                                TABLE OF CONTENTS

<TABLE>
<CAPTION>
                                                                                                      Page
                                                                                                      ----
<S>                                                                                                   <C>
ARTICLE I DEFINITIONS...............................................................................    1
         1.1          Additional Services...........................................................    1
         1.2          Ancillary Agreements..........................................................    1
         1.3          CenterPoint Group.............................................................    1
         1.4          Corporate Center Services.....................................................    1
         1.5          Genco Distribution............................................................    1
         1.6          Genco Distribution Date.......................................................    1
         1.7          Genco Separation Agreement....................................................    2
         1.8          Genco Group...................................................................    2
         1.9          Group.........................................................................    2
         1.10         Impracticable.................................................................    2
         1.11         Information Technology Services...............................................    2
         1.12         Initial Services..............................................................    2
         1.13         Liability.....................................................................    2
         1.14         Providing Company.............................................................    2
         1.15         Receiving Company.............................................................    2
         1.16         Representative................................................................    2
         1.17         Services......................................................................    2
         1.18         Shared Services...............................................................    2
         1.19         Subsidiary....................................................................    2
         1.20         System........................................................................    2

ARTICLE II SERVICES.................................................................................    3
         2.1          Services......................................................................    3
         2.2          Subsidiaries; Services Performed by Others....................................    4
         2.3          Charges and Payment...........................................................    5
         2.4          General Obligations; Standard of Care.........................................    8
         2.5          Certain Limitations...........................................................   10
         2.6          Confidentiality...............................................................   10
         2.7          Term; Early Termination.......................................................   11
         2.8          Disclaimer of Warranties, Limitation of Liability and Indemnification.........   12
         2.9          Representatives...............................................................   13
         2.10         Employee Matters..............................................................   13

ARTICLE III MISCELLANEOUS...........................................................................   13
         3.1          Taxes.........................................................................   13
         3.2          Laws and Governmental Regulations.............................................   14
         3.3          Relationship of Parties.......................................................   14
         3.4          References....................................................................   14
         3.5          Modification and Amendment....................................................   14
</TABLE>

                                       -i-

<PAGE>

<TABLE>
<S>                                                                                                   <C>
         3.6          Inconsistency.................................................................   14
         3.7          Resolution of Disputes........................................................   15
         3.8          Successors and Assignment.....................................................   15
         3.9          Notices.......................................................................   15
         3.10         Governing Law.................................................................   15
         3.11         Severability..................................................................   15
         3.12         Counterparts..................................................................   15
         3.13         Rights of the Parties.........................................................   15
         3.14         Reservation of Rights.........................................................   15
         3.15         Entire Agreement..............................................................   16
</TABLE>

                                      -ii-

<PAGE>

                          TRANSITION SERVICES AGREEMENT

                  THIS TRANSITION SERVICES AGREEMENT, entered into effective as
of August 31, 2002 (the "Effective Date"), is between CenterPoint Energy, Inc.,
a Texas corporation ("CenterPoint"), and Texas Genco Holdings, Inc., a Texas
corporation ("Genco"). Capitalized terms used herein and not otherwise defined
shall have the respective meanings assigned to them in Article I hereof or
assigned to them in the Genco Separation Agreement (as defined below).

                  WHEREAS, Genco is an indirect, wholly owned Subsidiary of
CenterPoint; and

                  WHEREAS, the parties have entered into a Separation Agreement
of even date herewith (the "Genco Separation Agreement") pursuant to which,
among other things, approximately 19% of the shares of Genco common stock owned
by CenterPoint will be distributed to the shareholders of CenterPoint (the
"Genco Distribution"); and

                  WHEREAS, the parties agree that it will be necessary and
desirable for CenterPoint to provide to Genco the "Services" described herein
for a transitional period following the Genco Distribution.

                  NOW, THEREFORE, in consideration of the premises and the
mutual covenants and agreements herein contained, the parties, intending to be
legally bound, agree as follows:

                                   ARTICLE I
                                  DEFINITIONS

                  For the purpose of this Agreement the following terms shall
have the following meanings:

                  1.1      ADDITIONAL SERVICES. "Additional Services" shall have
the meaning set forth in subsection 2.1(c).

                  1.2      ANCILLARY AGREEMENTS. "Ancillary Agreements" has the
meaning assigned to that term in the Genco Separation Agreement.

                  1.3      CENTERPOINT GROUP. "CenterPoint Group" shall mean
CenterPoint and its Subsidiaries excluding Genco and other members of the Genco
Group.

                  1.4      CORPORATE CENTER SERVICES. "Corporate Center
Services" shall mean the Services described in Exhibit 2.1(a)(i).

                  1.5      GENCO DISTRIBUTION. "Genco Distribution" has the
meaning set forth in the recitals hereto.

                  1.6      GENCO DISTRIBUTION DATE. "Genco Distribution Date"
has the meaning assigned to that term in the Genco Separation Agreement.

                                        1

<PAGE>

                  1.7      GENCO SEPARATION AGREEMENT. "Genco Separation
Agreement" has the meaning set forth in the recitals hereto.

                  1.8      GENCO GROUP. "Genco Group" shall mean Genco and its
Subsidiaries.

                  1.9      GROUP. "Group" shall mean either of the CenterPoint
Group or the Genco Group, as the context requires.

                  1.10     IMPRACTICABLE. "Impracticable" (and words of similar
import) shall have the meaning set forth in Section 2.5(b).

                  1.11     INFORMATION TECHNOLOGY SERVICES. "Information
Technology Services" shall mean the Services described in Exhibit 2.1(a)(ii).

                  1.12     INITIAL SERVICES. "Initial Services" shall have the
meaning set forth in Section 2.1(a).

                  1.13     LIABILITY. "Liability" has the meaning assigned to
that term in the Genco Separation Agreement.

                  1.14     PROVIDING COMPANY. "Providing Company" shall mean,
with respect to any particular Service, CenterPoint, or if a CenterPoint
Subsidiary is identified on the applicable Exhibit as the party to provide such
Service, such CenterPoint Subsidiary.

                  1.15     RECEIVING COMPANY. "Receiving Company" shall mean,
with respect to any particular Service, Genco or such Genco Subsidiary or Genco
Subsidiaries as may be identified on the applicable Exhibit as the party to
receive such Service or as Genco may hereafter designate to receive such
Service.

                  1.16     REPRESENTATIVE. "Representative" of any party shall
mean a managerial level employee appointed by such party to have the
responsibilities and authority set forth in Section 2.9.

                  1.17     SERVICES. "Services" shall have the meaning set forth
in Section 2.1(c).

                  1.18     SHARED SERVICES. "Shared Services" shall mean the
Services described in Exhibit 2.1(a)(iii).

                  1.19     SUBSIDIARY. "Subsidiary" shall mean, with respect to
CenterPoint or Genco, a corporation, partnership, limited partnership, limited
liability company or other entity more than 50% of the voting common stock or
other interests entitled to vote generally for the election of directors (or
comparable governing body) is owned, directly or indirectly, by CenterPoint or
Genco, respectively.

                  1.20     SYSTEM. "System" shall mean the software, hardware,
data store or maintenance and support components or portions of such components
of a set of information technology assets identified in Exhibit 2.1(a)(ii)
hereto.

                                        2

<PAGE>

                                   ARTICLE II
                                    SERVICES

                  2.1      SERVICES.

                  (a)      INITIAL SERVICES. Except as otherwise provided
herein, during the applicable term determined pursuant to Section 2.7 hereof,
the following "Initial Services" shall be provided by CenterPoint or other
Providing Company with respect to a Service to Genco or other Receiving Company
with respect to a Service:

                  (i)      Corporate Center Services;

                  (ii)     Information Technology Services; and

                  (iii)    Shared Services.

                  (b)      FINAL EXHIBITS. The parties have made good faith
efforts as of the date hereof to identify each Initial Service and complete the
content of each Exhibit pertaining to the Initial Services. To the extent an
Exhibit has not been prepared for an Initial Service or an Exhibit is otherwise
incomplete as of the date hereof, the parties shall use good faith efforts to
prepare or complete Exhibits by the Genco Distribution Date. Any Services
reflected on any such additional or amended Exhibit shall be deemed an "Initial
Service" as if set forth on such Exhibit as of the date hereof.

                  (c)      ADDITIONAL SERVICES.

                  (i)      From time to time after the Genco Distribution Date,
         the parties may identify additional services that one party will
         provide to the other party in accordance with the terms of this
         Agreement (the "Additional Services" and, together with the Initial
         Services, the "Services"). The parties shall create an Exhibit for each
         Additional Service setting forth a description of the Service, the time
         period during which the Service will be provided, the charge for the
         Service and any other terms applicable thereto and obtain the approval
         of each party's Representative. Except as set forth in Section
         2.1(c)(ii), the parties may, but shall not be required to, agree on
         Additional Services during the term of this Agreement.

                  (ii)     Except as set forth in the next sentence, the
         Providing Company shall be obligated to perform, at charges established
         pursuant to Section 2.3, any Additional Service that: (A) was provided
         by the Providing Company immediately prior to the Genco Distribution
         Date and that the Receiving Company reasonably believes was
         inadvertently or unintentionally omitted from the list of Initial
         Services or (B) is essential to effectuate an orderly transition of
         Genco to an independently managed, public company following the Genco
         Distribution, unless in either case such performance would
         significantly disrupt the Providing Company's operations or materially
         increase the scope of its responsibility under this Agreement. If the
         Providing Company reasonably believes the performance of Additional
         Services required under the foregoing clauses (A) or (B) would
         significantly disrupt its operations or materially increase the scope
         of its responsibility under this Agreement, the Providing Company and
         the Receiving

                                        3

<PAGE>

         Company shall negotiate in good faith to establish terms under which
         the Providing Company can provide such Additional Services, but the
         Providing Company shall not be obligated to provide such Additional
         Services if, following good faith negotiation, the Providing Company
         and the Receiving Company are unable to reach agreement on such terms.

                  (d)      SCALED UP OR MODIFIED SERVICES. If Genco requests the
level at which any Service is to be provided to be scaled up to a level in
excess of the level in effect on the Genco Distribution Date (or, in the case of
Corporate Center Services, such levels as may reasonably be expected to result
taking into account the status of Genco as a separate public company), or a
modification to any Service, Genco shall give CenterPoint such advance notice as
it may reasonably require sufficient to enable CenterPoint to make any necessary
preparations to perform such Services on the scaled-up or modified basis, and to
develop changes in the cost-based rates for those services as described in
Section 2.3(d). For purposes of this Section, the level of a Service shall be
considered to be "scaled up" if providing the service at the proposed level
involves an increase in personnel, equipment or other resources that is not, in
the opinion of the Providing Company, de minimis and is not reasonably embraced
by the agreed definition and scope of that Service prior to the proposed
increase.

                  2.2      SUBSIDIARIES; SERVICES PERFORMED BY OTHERS. At its
option, a Providing Company may cause any Service it is required to provide
hereunder to be provided by any other Person that is providing, or may from time
to time provide, the same or similar services for the Providing Company. Unless
otherwise specified herein or on an Exhibit hereto, the Providing Company shall
remain responsible, in accordance with the terms of this Agreement, for
performance of any Service it causes to be so provided. A Receiving Company may
direct that any Service required to be provided hereunder be provided for the
benefit of another member of the Group of which the Receiving Company is a
member, but unless specified herein or on an Exhibit hereto, the Receiving
Company shall be responsible for the payment of charges and other performance
required of the Receiving Company with respect to such Service.

                  To the extent CenterPoint personnel who traditionally have
provided services contemplated by this Agreement are transferred to a similar
position with Genco or a member of the Genco Group, such personnel shall
continue to provide services to Genco and, until the Genco Distribution Date,
will provide such services to CenterPoint to the extent CenterPoint requests. To
the extent such transferred personnel provide services to Genco, CenterPoint
shall be relieved of its obligations to provide such services to Genco under
this Agreement.

                  If CenterPoint personnel necessary to provide services under
this Agreement are transferred to Genco before the Genco Distribution Date and
CenterPoint is thereby rendered unable to continue to provide such services as
contemplated by this Agreement, CenterPoint shall be excused from its
obligations to provide such services, except to the extent either (i) such
services can reasonably be provided from personnel remaining with CenterPoint
without an increase in costs to CenterPoint that are not subject to
reimbursement under this Agreement or (ii) such services are treated as
Additional Services.

                  Services that Genco provides to CenterPoint prior to the Genco
Distribution Date shall be treated as though Genco is the Providing Company and
CenterPoint is the Receiving

                                        4

<PAGE>

Company under this Agreement. CenterPoint shall compensate Genco for such
services in the same manner as Genco compensates CenterPoint for similar
services, and the risk allocation to Genco for such services shall be the same
as the risk allocation to CenterPoint for the services.

                  2.3      CHARGES AND PAYMENT.

                  (a)      GENERAL PRINCIPLES RELATING TO CHARGES FOR SERVICES.
Subject to the specific terms of this Agreement, the Services will be charged
and paid for on the same general basis as has been heretofore in effect, with
the intent that such charges shall approximate the fully allocated direct and
indirect costs of providing the services, including reimbursement of
out-of-pocket third party costs and expenses, but without any element of profit
except to the extent routinely included as a component of traditional utility
cost of capital. It is the further intent of the parties that the fully
allocated direct and indirect costs incurred by CenterPoint and its Subsidiaries
in providing Services under this Agreement and similar services to other
entities within the CenterPoint Group will be charged for on a basis that
allocates such costs charged on a fair, nondiscriminatory basis. The parties
shall use good faith efforts to discuss any situation in which the actual charge
for a Service is reasonably expected to exceed the estimated charge, if any, set
forth on an Exhibit for a particular Service, provided, however, that charges
incurred in excess of any such estimate shall not justify stopping the provision
of, or payment for, Services under this Agreement.

                  (i)      Special Provisions for Corporate Center Services. In
         the case of Corporate Center Services, the costs of Services included
         in Exhibit 2.1(a)(i) will be direct billed on the basis of the fully
         allocated direct and indirect costs of providing those Services
         determined under the principles set forth in Section 2.3(a) where
         practicable. The costs of all other Corporate Center Services will be
         gathered in a common cost pool with similar services provided to other
         members of the CenterPoint Group and allocated to Genco and to other
         members of the CenterPoint Group pursuant to the existing methodology
         derived from the 1999 corporate cost allocation study conducted for
         Reliant Energy, Incorporated by DMG Maximus. As is the case under the
         current methodology, when there is a significant increase or decrease
         in one or more components of the cost of providing a Service, or when a
         category of Services is terminated as provided in Section 2.7, an
         adjustment to the allocation will be made by CenterPoint to reflect
         such changes. Out-of-pocket costs and expenses will also be included in
         the charges as provided in this Section 2.3(a).

                  (ii)     Special Provisions for Information Technology
         Services. In the case of Information Technology Services, Services will
         be charged initially based on the rates and usage formulas set forth in
         Exhibit 2.1(a)(ii) and shall be adjusted from time to time thereafter.
         The rates and formulas in effect at the Genco Distribution Date will
         continue in effect until December 31, 2003, unless adjustments prior to
         that date are required as specified in Section 2.3(b). Out-of-pocket
         costs and expenses will also be included in the charges as provided in
         this Section 2.3(a). Subsequent to December 31, 2003, components of
         rates attributable to equipment usage will be adjusted to reflect
         compensation for depreciation and return on capital investment.

                                        5

<PAGE>

                  In the case of any Services associated with facilitating the
         transition to an independent information technology infrastructure for
         Genco (as distinguished from the continuation of services of the nature
         heretofore provided) the scope and pricing of which has not been
         defined as of the Genco Distribution Date, the rates therefor will be
         determined by CenterPoint on the basis of the same cost-based
         methodology underlying the pricing of other Services provided under
         this Agreement. CenterPoint and Genco will use their respective
         commercially reasonable efforts to minimize incremental costs of
         effecting a transition to an independent information technology
         infrastructure for Genco.

                  It is understood that, except as otherwise provided herein or
         agreed in writing, the cost of buying new hardware or obtaining new
         software licenses specifically for the benefit of Genco shall be the
         responsibility of Genco.

                  It is understood that CenterPoint's commitment to deliver the
         level of service specified herein (including any Exhibits hereto) is
         contingent upon adherence by Genco to CenterPoint's process and
         technology standards as currently in effect and as subsequently
         modified and communicated to Genco.

                  It is understood that CenterPoint is responsible for
         protecting the performance levels and security of existing systems and
         information technology infrastructure. Accordingly, Genco agrees to
         review all modifications to any existing system currently running on
         CenterPoint's infrastructure and to obtain CenterPoint's approval,
         which shall not be unreasonably withheld, for such modifications.
         Similarly, Genco will review all new systems to be run on CenterPoint's
         infrastructure, or which connect with it, and will obtain CenterPoint's
         approval, which shall not be unreasonably withheld or delayed, before
         such systems are put in development or production.

                  It is understood that the rates provided for herein are based
         on a continuation of CenterPoint's centralized information technology
         infrastructure and organization. If Genco requests changes to any
         Services provided that require the segmentation of CenterPoint's
         information technology infrastructure into multiple or independent
         units, CenterPoint shall have the right to elect whether or not to
         provide Services on such changed basis, including the right to
         establish the economic terms on which it is willing to provide such
         Services.

                  (iii)    Special Provisions for Shared Services. In the case
         of Shared Services, the Services will be charged initially based on the
         rates and usage formulas set forth in the applicable Service Level
         Agreements covering services referenced in Exhibit 2.1(a)(iii) and
         shall be adjusted from time to time thereafter, as provided herein. The
         rates and formulas in effect at the Genco Distribution Date will
         continue in effect until December 31, 2003, unless adjustments prior to
         that date are required as specified in Section 2.3(b). Out-of-pocket
         costs and expenses will also be included in the charges as provided in
         this Section 2.3(a).

                  (b)      ECONOMIC REOPENER. If, in the case of any Services,
events or circumstances arise which, in the opinion of the Providing Company,
render the costs of providing such Services as determined under the principles
set forth in Section 2.3(a) materially

                                        6

<PAGE>

different from those being charged under a specific rate or formula then in
effect, the specific rate or formulas shall be equitably adjusted to take into
account such events or changed circumstances and bring them into line with the
general principles set forth in Section 2.3(a). Rates for a Service will also be
adjusted on a pro rata basis whenever the cost of providing the Service
increases by reason of the necessity to renegotiate a software license or obtain
a new license as a result of the change in the relationship between the
Providing Company and the entity to whom the Service is provided.

                  (c)      ANNUAL ADJUSTMENTS. Specific rates and formulas for
Services provided hereunder shall be subject to adjustment as of January 1 in
each year commencing January 1, 2004 to bring the rates and formulas into
conformity with the general principles referred to in Section 2.3(a), based on
estimated fixed and variable costs and budgeted usage levels for the year
commencing on such January 1.

                  (d)      SCALED UP OR MODIFIED SERVICES. If Genco requests the
scaling up or modifications of services under Section 2.1(d), CenterPoint shall
determine appropriate changes in the charges for such scaled up or modified
services in accordance with the general principles set forth in Section 2.3(a)
and shall give notice thereof to Genco. CenterPoint shall not be required to
incur costs or obligations or otherwise commit time and resources in preparation
for providing such Services on the scaled up or modified basis (except to the
extent necessary to make such determination of appropriate changes in the
charges to be made) unless and until Genco gives CenterPoint notice that it will
accept the charges for such services determined by CenterPoint in accordance
with this Section 2.3(d). If the scaling up of Services requires the hiring of
additional employees by CenterPoint or its Subsidiaries or the procurement of
additional equipment or services (other than equipment or services the full cost
of which is paid or reimbursed by Genco on a current basis), CenterPoint may
include in the charges for the scaled up services provisions for recovery
(either as part of the periodic rate or as payments due upon termination of the
Services) of (a) employee severance expenses and (b) the cost of equipment and
systems that CenterPoint cannot otherwise recover following termination of the
Services, in each case to the extent attributable to the scaled-up service
levels. In case any scaling up or modification of services requires the
incurrence of costs to implement such modification or scaling up (for example,
an SAP change or payroll configuration), CenterPoint may charge Genco for such
costs on an "up front" basis, in addition to any adjustments in periodic rates
occasioned by such scaling up or modification.

                  (e)      CHARGES FOR ADDITIONAL SERVICES. The Receiving
Company shall pay the Providing Company the charges, if any, set forth on each
Exhibit hereafter created for each of the Additional Services listed therein.
Charges, if any, for other Additional Services, including those required by
Section 2.1(c)(ii), shall be determined according to methods in use prior to the
Genco Distribution Date or such other method as may be mutually agreed that
ensures that the Providing Company recovers costs and expenses, but without any
profit except to the extent routinely included as a component of traditional
utility cost of capital, in accordance with subsection 2.3(a). Notwithstanding
the foregoing, however, the agreement of a party to provide or receive any
Additional Service that is not required pursuant to Section 2.1(c)(ii) at any
given rate or charge shall be at the sole discretion of such party.

                                        7

<PAGE>

                  (f)      PAYMENT TERMS. Charges and collections for Services
rendered pursuant to this Agreement shall continue to be made using the SAP
functionality in use as of the date of this Agreement unless and until either
party elects to discontinue such procedures, in which case the Providing Company
shall thereafter bill the Receiving Company monthly for all charges pursuant to
this Agreement and the Receiving Company shall pay the Providing Company for all
Services within 30 days after receipt of an invoice therefor. Charges shall be
supported by reasonable documentation (which may be maintained in electronic
form), consistent with past practices. Late payments shall bear interest at the
lesser of the prime rate announced by Chase Bank and in effect from time to time
plus 2% per annum or the maximum non-usurious rate of interest permitted by
applicable law.

                  (g)      PERFORMANCE UNDER ANCILLARY AGREEMENTS.
Notwithstanding anything to the contrary contained herein, the Receiving Company
shall not be charged under this Agreement for any Services that are specifically
required to be performed under the Genco Separation Agreement or any other
Ancillary Agreement and any such other Services shall be performed and charged
for in accordance with the terms of the Genco Separation Agreement or such other
Ancillary Agreement.

                  (h)      ERROR CORRECTION; TRUE-UPS; ACCOUNTING. The Providing
Company shall make adjustments to charges as required to reflect the discovery
of errors or omissions in charges. The Providing Company and the Receiving
Company shall conduct an annual true-up process to adjust charges based on a
reconciliation of differences in budgeted usage and costs with actual
experience. It is the intent of the parties that such true-up process will be
conducted using substantially the same process, procedures and methods of review
as have been heretofore in effect. Services under this Agreement and charges
therefor shall be subject to the audit rights set forth in Section 8.4 of the
Genco Separation Agreement.

                  2.4      GENERAL OBLIGATIONS; STANDARD OF CARE.

                  (a)      PERFORMANCE METRICS: PROVIDING COMPANY. Subject to
Sections 2.3 and 2.5(c), the Providing Company shall maintain sufficient
resources to perform its obligations hereunder and shall perform such
obligations in a commercially reasonable manner. Specific performance metrics
for the Providing Company may be set forth in Exhibits. Where none is set forth,
the Providing Company shall provide Services in accordance with the policies,
procedures and practices in effect before the date of this Agreement and shall
exercise the same care and skill as it exercises in performing similar services
for itself.

                  (b)      PERFORMANCE METRICS: RECEIVING COMPANY. Specific
performance metrics for the Receiving Company may be set forth in Exhibits.
Where none is set forth, the Receiving Company shall, in connection with
receiving Services, follow the policies, procedures and practices in effect
before the date of this Agreement including providing information and
documentation sufficient for the Providing Company to perform the Services as
they were performed before the date of this Agreement and making available, as
reasonably requested by the Providing Company, sufficient resources and timely
decisions, approvals and acceptances in order that the Providing Company may
accomplish its obligations hereunder in a timely manner.

                                        8

<PAGE>

                  (c)      TRANSITIONAL NATURE OF SERVICES; CHANGES. The parties
acknowledge the transitional nature of the Services and that the Providing
Company may make changes from time to time in the manner of performing the
Services if the Providing Company is making similar changes in performing
similar services for members of its own Group and if the Providing Company
furnishes to the Receiving Company substantially the same notice the Providing
Company shall provide members of its own Group respecting such changes.

                  (d)      RESPONSIBILITY FOR ERRORS; DELAYS. The Providing
Company's sole responsibility to the Receiving Company:

                  (i)      for errors or omissions in Services shall be to
         furnish correct information and/or adjustment in the Services, at no
         additional cost or expense to the Receiving Company; provided, the
         Receiving Company must promptly advise the Providing Company of any
         such error or omission of which it becomes aware after having used
         reasonable efforts to detect any such errors or omissions in accordance
         with the standard of care set forth in subsection 2.4(b); and provided,
         further, that the responsibility to furnish correct information or an
         adjustment of services at no additional cost or expense to the
         Receiving Company shall not be construed to require the Providing
         Company to make any payment or incur any Liability for which it is not
         responsible, or with respect to which it is provided indemnity, under
         Section 2.8; and

                  (ii)     for failure to deliver any Service because of
         Impracticability shall be to use commercially reasonable efforts,
         subject to subsection 2.5(b), to make the Services available and/or to
         resume performing the Services as promptly as reasonably practicable.

                  (e)      GOOD FAITH COOPERATION; CONSENTS. The parties will
use good faith efforts to cooperate with each other in all matters relating to
the provision and receipt of Services. Such cooperation shall include exchanging
information, providing electronic access to systems used in connection with
Services to the extent the systems in use are designed and configured to permit
such access, performing true-ups and adjustments and obtaining all consents,
licenses, sublicenses or approvals necessary to permit each party to perform its
obligations hereunder. The costs of obtaining such consents, licenses,
sublicenses or approvals shall be allocated in accordance with Section 2.3. The
parties will maintain documentation supporting the information contained in the
Exhibits and cooperate with each other in making such information available as
needed in the event of a tax audit, whether in the United States or any other
country.

                  (f)      ALTERNATIVES. If the Providing Company reasonably
believes it is unable to provide any Service because of a failure to obtain
necessary consents, licenses, sublicenses or approvals pursuant to subsection
2.4(e) or because of Impracticability, the parties shall cooperate to determine
the best alternative approach. Until such alternative approach is found or the
problem otherwise resolved to the satisfaction of the parties, the Providing
Party shall use commercially reasonable efforts, subject to Section 2.5(b) and
Section 2.5(c), to continue providing the Service or, in the case of Systems, to
support the function to which the System relates or permit Receiving Party to
have access to the System so Receiving Party can support the function itself.

                                        9

<PAGE>

                  2.5      CERTAIN LIMITATIONS.

                  (a)      SERVICE BOUNDARIES AND SCOPE. Except as provided in
an Exhibit for a specific Service, (i) the Providing Company shall be required
to provide the Services only at the locations such Services are being provided
by the Providing Company for the members of the Genco Group immediately prior to
the Genco Distribution Date; and (ii) the Services will be available only for
purposes of conducting the business of Genco and its Subsidiaries substantially
in the manner it was conducted prior to the Genco Distribution Date.

                  (b)      IMPRACTICABILITY. The Providing Company shall not be
required to provide any Service to the extent the performance of such Service
becomes "Impracticable" as a result of a cause or causes outside the reasonable
control of the Providing Company including unfeasible technological
requirements, or to the extent the performance of such Services (i) would
require the Providing Company to violate any applicable laws, rules or
regulations or (ii) would result in the breach of any software license or other
applicable contract in effect on the date of this Agreement.

                  (c)      ADDITIONAL RESOURCES. Except as provided in an
Exhibit for a specific Service, in providing the Services, the Providing Company
shall not be obligated to (i) maintain the employment of any specific employee;
(ii) purchase, lease or license any additional equipment or software; or (iii)
pay any costs related to the transfer or conversion of the Receiving Company's
data to the Receiving Company or any alternate supplier of Services.

                  (d)      NO SALE, TRANSFER, ASSIGNMENT. No Receiving Company
may sell, transfer, assign or otherwise use the Services provided hereunder, in
whole or in part, for the benefit of any Person other than a member of the Genco
Group.

                  2.6      CONFIDENTIALITY.

                  (a)      INFORMATION SUBJECT TO OTHER OBLIGATIONS. The
Providing Company and the Receiving Company agree that all Information regarding
the Services, including, but not limited to, price, costs, methods of operation,
and software, and all Information provided by any Receiving Company in
connection with the Services, shall be maintained in confidence and shall be
subject to Sections 8.2 and 8.11 of the Genco Separation Agreement.

                  (b)      ALL INFORMATION CONFIDENTIAL. The Providing Company's
Systems used to perform the Services provided hereunder are confidential and
proprietary to the Providing Company or third parties. The Receiving Company
shall treat these Systems and all related procedures and documentation as
confidential and proprietary to the Providing Company or its third party
vendors.

                  (c)      INTERNAL USE; TITLE, COPIES, RETURN. Subject to the
applicable provisions of the Genco Separation Agreement governing ownership, use
and licensing of Intellectual Property (as defined therein), the Receiving
Company agrees that:

                  (i)      all Systems, procedures and related materials
         provided to the Receiving Company are for the Receiving Company's
         internal use only and only as related to the Services or any of the
         underlying Systems used to provide the Services;

                                       10

<PAGE>

                  (ii)     title to all Systems used in performing the Services
         provided hereunder shall remain in the Providing Company or its third
         party vendors;

                  (iii)    The Receiving Company shall not copy, modify, reverse
         engineer, decompile or in any way alter Systems without the Providing
         Company's express written consent; and

                  (iv)     Upon the termination of any of the Services, the
         Receiving Company shall return to the Providing Company, as soon as
         practicable, any equipment or other property of the Providing Company
         relating to the Services which is owned or leased by it and is or was
         in the Receiving Company's possession or control.

                  2.7      TERM; EARLY TERMINATION.

                  (a)      TERM. The term of this Agreement shall commence on
the date hereof and shall remain in effect through the earlier of such time as
(i) all Services are terminated as provided in this Section or (ii) CenterPoint
ceases to own a majority of the voting power represented by the outstanding
Genco common stock. This Agreement may be extended by the parties in writing
either in whole or with respect to one or more of the Services, provided,
however, that such extension shall only apply to the Service for which the
Agreement was extended. The parties may agree on an earlier expiration date
respecting a specific Service by specifying that date on the Exhibit for that
Service. Services shall be provided up to and including the date set forth in
the applicable Exhibit, subject to earlier termination as provided herein.

                  (b)      TERMINATION BY GENCO OF SPECIFIC SERVICE CATEGORIES.
Genco may terminate this Agreement either with respect to all, or with respect
to any one or more, of the Services provided hereunder at any time and from time
to time, for any reason or no reason, by giving written notice to the Providing
Party as follows:

                  (i)      for Corporate Center Services, except to the extent
         otherwise provided in Exhibit 2.1(a)(i), a terminated category of
         Services must include all Services included in one of the nine major
         service categories specified in Exhibit 2.1(a)(i), and notice of
         termination thereof must be given at least 30 days in advance of the
         effective date of the termination.

                  (ii)     for Information Technology Services, a terminated
         category of Services must include one of the thirteen major service
         categories specified in Exhibit 2.1(a)(ii), in its entirety, and a
         notice of termination must be given at least 90 days in advance of the
         effective date of the termination.

                  (iii)    for Shared Services, a terminated category of
         Services must include a complete service function specified in Exhibit
         2.7(b)(iii) and advance notice of termination for that function must be
         given no later than the date specified in Exhibit 2.7(b)(iii).

                                       11

<PAGE>

                  (c)      TERMINATION OF LESS THAN ALL SERVICES. In the event
of any termination with respect to one or more, but less than all, Services,
this Agreement shall continue in full force and effect with respect to any
Services not terminated hereby.

                  (d)      USER IDs, PASSWORDS. The parties shall use good faith
efforts at the termination or expiration of this Agreement or any specific
Exhibit hereto, to ensure that all user IDs and passwords are canceled and,
subject to Section 2.6(c), that any data pertaining solely to the other parties
are deleted or removed from Systems.

                  2.8      DISCLAIMER OF WARRANTIES, LIMITATION OF LIABILITY AND
INDEMNIFICATION.

                  (a)      DISCLAIMER OF WARRANTIES. EACH PROVIDING COMPANY AND
ITS SUBSIDIARIES DISCLAIM ALL WARRANTIES, EXPRESS OR IMPLIED, INCLUDING, BUT NOT
LIMITED TO, THE IMPLIED WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A
PARTICULAR PURPOSE, WITH RESPECT TO THE SERVICES. EACH PROVIDING COMPANY AND ITS
SUBSIDIARIES MAKE NO REPRESENTATIONS OR WARRANTIES AS TO THE QUALITY,
SUITABILITY OR ADEQUACY OF THE SERVICES FOR ANY PURPOSE OR USE.

                  (b)      LIMITATION OF LIABILITY; INDEMNIFICATION OF RECEIVING
COMPANY. Each Providing Company and its Subsidiaries shall have no Liability to
any Receiving Company with respect to its furnishing any of the Services
hereunder except for Liabilities arising out of or resulting from the gross
negligence or willful misconduct occurring after the Genco Distribution Date of
the Providing Company or any of its Subsidiaries. Each Providing Company will
indemnify, defend and hold harmless each Receiving Company in respect of all
such Liabilities arising out of or resulting from such gross negligence or
willful misconduct. Such indemnification obligation shall be a Liability of the
Providing Company for purposes of the Genco Separation Agreement, and the
provisions of Article III of the Genco Separation Agreement with respect to
indemnification shall govern with respect thereto. IN NO EVENT SHALL A PROVIDING
COMPANY OR ANY OF ITS SUBSIDIARIES HAVE ANY LIABILITY UNDER THIS AGREEMENT OR
OTHERWISE ARISING OUT OF OR RESULTING FROM THE PERFORMANCE OF, OR THE FAILURE TO
PERFORM, SERVICES FOR LOSS OF ANTICIPATED PROFITS BY REASON OF ANY BUSINESS
INTERRUPTION, FACILITY SHUTDOWN OR NON-OPERATION, LOSS OF DATA OR OTHERWISE OR
FOR ANY INCIDENTAL, INDIRECT, SPECIAL OR CONSEQUENTIAL DAMAGES, WHETHER OR NOT
CAUSED BY OR RESULTING FROM NEGLIGENCE, INCLUDING GROSS NEGLIGENCE, OR BREACH OF
OBLIGATIONS HEREUNDER AND WHETHER OR NOT THE PROVIDING COMPANY OR ANY OF ITS
SUBSIDIARIES WAS INFORMED OF THE POSSIBILITY OF THE EXISTENCE OF SUCH DAMAGES.

                  (c)      LIMITATION OF LIABILITY; INDEMNIFICATION OF PROVIDING
COMPANY. Each Receiving Company shall indemnify and hold harmless each Providing
Company in respect of all Liabilities arising out of or resulting from the
Providing Company's furnishing or failing to furnish the Services provided for
in this Agreement, other than Liabilities arising out of or resulting from the
gross negligence or willful misconduct of the Providing Company. The provisions
of this indemnity shall apply only to losses that relate directly to the
provision of Services. Such indemnification obligation shall be a Liability of
the Receiving Company for purposes of the Genco Separation Agreement and the
provisions of Article III of the Genco

                                       12

<PAGE>

Separation Agreement with respect to indemnification shall govern with respect
thereto. IN NO EVENT SHALL A RECEIVING COMPANY OR ANY OF ITS SUBSIDIARIES HAVE
ANY LIABILITY UNDER THIS AGREEMENT OR OTHERWISE ARISING OUT OF OR RESULTING FROM
THE PERFORMANCE OF, OR THE FAILURE TO PERFORM, SERVICES FOR LOSS OF ANTICIPATED
PROFITS BY REASON OF ANY BUSINESS INTERRUPTION, FACILITY SHUTDOWN OR
NON-OPERATION, LOSS OF DATA OR OTHERWISE OR FOR ANY INCIDENTAL, INDIRECT,
SPECIAL OR CONSEQUENTIAL DAMAGES, WHETHER OR NOT CAUSED BY OR RESULTING FROM
NEGLIGENCE, INCLUDING GROSS NEGLIGENCE, OR BREACH OF OBLIGATIONS HEREUNDER AND
WHETHER OR NOT THE PROVIDING COMPANY OR ANY OF ITS SUBSIDIARIES WAS INFORMED OF
THE POSSIBILITY OF THE EXISTENCE OF SUCH DAMAGES.

                  (d)      SUBROGATION OF RIGHTS VIS-A-VIS THIRD PARTY
CONTRACTORS. In the event any Liability arises from the performance of Services
hereunder by a third party contractor, the Receiving Company shall be subrogated
to such rights, if any, as the Providing Company may have against such third
party contractor with respect to the Services provided by such third party
contractor to or on behalf of the Receiving Company. Subrogation under this
Section 2.8(d) shall not affect the obligation of the Providing Company to
perform Services under this Agreement.

                  2.9      REPRESENTATIVES. The parties shall each appoint one
or more Representatives to facilitate communications and performance under this
Agreement. The maximum number of Representatives for each party shall be three,
one for each of the three principal categories specified in Section 2.1(a). Each
party may treat an act of a Representative of another party as being authorized
by such other party without inquiring behind such act or ascertaining whether
such Representative had authority to so act. Each party shall have the right at
any time and from time to time to replace any of its Representatives by giving
notice in writing to the other party setting forth the name of (i) each
Representative to be replaced and (ii) the replacement, and certifying that the
replacement Representative is authorized to act for the party giving the notice
in all matters relating to this Agreement (or matters relating to one or more
categories specified in Section 2.1(a)). Each Representative is hereby
authorized by the party he or she represents to approve the establishment of new
or modifications to existing Exhibits for Initial Services before or after the
Genco Distribution Date and the addition of new Exhibits for Additional Services
after the Genco Distribution Date.

                  2.10     EMPLOYEE MATTERS. To the extent Genco has adopted
such plans or programs, eligible employees of Genco will continue to participate
in CenterPoint's benefit plans and programs after the Genco Distribution Date,
in accordance with the terms and conditions of such plans and programs as they
may be amended or terminated by CenterPoint at any time, for so long as
CenterPoint continues to own 80% or more of the shares of Genco common stock or
such earlier date as Genco elects to terminate participation in one or more of
such plans or programs.

                                   ARTICLE III
                                  MISCELLANEOUS

                  3.1      TAXES. (a) General. Each Receiving Company shall bear
all taxes, duties and other similar charges (and any related interest and
penalties), imposed as a result of its receipt of Services under this Agreement,
including any tax which a Receiving Company is

                                       13

<PAGE>

required to withhold or deduct from payments to a Providing Company, except any
net income tax imposed upon the Providing Company by the country of its
incorporation or any governmental entity within its country of incorporation.

                  (b)      Sales Tax Liability and Payment. Notwithstanding
Section 3.1(a), each Receiving Company is liable for and will indemnify and hold
harmless any Providing Company from all sales, use and similar taxes (plus any
penalties, fines or interest thereon) (collectively, "Sales Taxes") assessed,
levied or imposed by any governmental or taxing authority on the providing of
Services by the Providing Company to the Receiving Company. The Providing
Company shall collect from the Receiving Company any Sales Tax that is due on
the Service it provides to such Receiving Company and shall pay such Sales Tax
so collected to the appropriate governmental or taxing authority.

                  3.2      LAWS AND GOVERNMENTAL REGULATIONS. The Receiving
Company shall be responsible for (i) compliance with all laws and governmental
regulations affecting its business and (ii) any use the Receiving Company may
make of the Services to assist it in complying with such laws and governmental
regulations. The provision of Services shall comply, to the extent applicable,
with CenterPoint's Internal Code of Conduct. The Providing Company shall comply
with all laws and governmental regulations applicable to the provision of
Services.

                  3.3      RELATIONSHIP OF PARTIES. Nothing in this Agreement
shall be deemed or construed by the parties or any third party as creating the
relationship of principal and agent, partnership or joint venture between the
parties, it being understood and agreed that no provision contained herein, and
no act of the parties, shall be deemed to create any relationship between the
parties other than the relationship of independent contractor nor be deemed to
vest any rights, interest or claims in any third parties.

                  3.4      REFERENCES. All reference to Sections, Articles,
Exhibits or Schedules contained herein mean Sections, Articles, Exhibits or
Schedules of or to this Agreement, as the case may be, unless otherwise stated.
When a reference is made in this Agreement to a "party" or "parties", such
reference shall be to a party or parties to this Agreement unless otherwise
indicated. Whenever the words "include", "includes" or "including" are used in
this Agreement, they shall be deemed to be followed by the words "without
limitation". The use of the singular herein shall be deemed to be or include the
plural (and vice versa) whenever appropriate. The use of the words "hereof",
"herein", "hereunder", and words of similar import shall refer to this entire
Agreement, and not to any particular article, section, subsection, clause,
paragraph or other subdivision of this Agreement, unless the context clearly
indicates otherwise. The word "or" shall not be exclusive; "may not" is
prohibitive and not permissive.

                  3.5      MODIFICATION AND AMENDMENT. Except for modifications
to Exhibits, which may be made by Representatives pursuant to Section 2.9
hereof, this Agreement may not be modified or amended, or any provision waived,
except in the manner set forth in the Genco Separation Agreement.

                  3.6      INCONSISTENCY. In the event of any inconsistency
between the terms of this Agreement and any of the Exhibits hereto, the terms of
this Agreement, other than charges, shall control.

                                       14

<PAGE>

                  3.7      RESOLUTION OF DISPUTES. If a dispute, claim or
controversy results from or arises out of or in connection with this Agreement
or the performance of, or failure to perform, the Services, the parties agree to
use the procedures set forth in Article VII of the Genco Separation Agreement,
in lieu of other available remedies, to resolve the same.

                  3.8      SUCCESSORS AND ASSIGNMENT. This Agreement shall be
binding upon and inure to the benefit of the parties and their respective
successors and permitted assigns. Except as contemplated by Section 2.2, no
party shall assign this Agreement or any rights herein without the prior written
consent of the other party, which may be withheld for any or no reason.

                  3.9      NOTICES. Unless expressly provided herein, all
notices, claims, certificates, requests, demands and other communications
hereunder shall be in writing and shall be deemed to be duly given (i) when
personally delivered or (ii) if mailed registered or certified mail, postage
prepaid, return receipt requested, on the date the return receipt is executed or
the letter refused by the addressee or its agent or (iii) if sent by overnight
courier which delivers only upon the signed receipt of the addressee, on the
date the receipt acknowledgment is executed or refused by the addressee or its
agent or (iv) if sent by facsimile or other generally accepted means of
electronic transmission, on the date confirmation of transmission is received
(provided that a copy of any notice delivered pursuant to this clause (iv) shall
also be sent pursuant to clause (ii) or (iii)), addressed to the attention of
the addressee's Chief Executive Officer at the address of its principal
executive office or to such other address or facsimile number for a party as it
shall have specified by like notice.

                  3.10     GOVERNING LAW. This Agreement shall be governed by
and construed in accordance with the laws of the State of Texas.

                  3.11     SEVERABILITY. Wherever possible, each provision of
this Agreement shall be interpreted in such a manner as to be effective and
valid under applicable law. If any portion of this Agreement is declared invalid
for any reason, such declaration shall have no effect upon the remaining
portions of this Agreement, which shall continue in full force and effect as if
this Agreement had been executed with the invalid portions thereof deleted.

                  3.12     COUNTERPARTS. This Agreement may be executed in two
or more counterparts, each of which shall be deemed an original, and all of
which shall constitute one and the same instrument.

                  3.13     RIGHTS OF THE PARTIES. Nothing expressed or implied
in this Agreement is intended or will be construed to confer upon or give any
person or entity, other than the parties and to the extent provided herein their
respective Subsidiaries, any rights or remedies under or by reason of this
Agreement or any transaction contemplated thereby.

                  3.14     RESERVATION OF RIGHTS. The waiver by either party of
any of its rights or remedies afforded hereunder or at law is without prejudice
and shall not operate to waive any other rights or remedies which that party
shall have available to it, nor shall such waiver operate to waive the party's
rights to any remedies due to a future breach, whether of a similar or different
nature. The failure or delay of a party in exercising any rights granted to it
hereunder shall not constitute a waiver of any such right and that party may
exercise that right at any time.

                                       15

<PAGE>

Any single or partial exercise of any particular right by a party shall exhaust
the same or constitute a waiver of any other right.

                  3.15     ENTIRE AGREEMENT. All understandings,
representations, warranties and agreements, if any, heretofore existing between
the parties regarding the subject matter hereof are merged into this Agreement,
which fully and completely express the agreement of the parties with respect to
the subject matter hereof.

                                       16

<PAGE>

         IN WITNESS WHEREOF, the parties have executed this Transition Services
Agreement as of the date first above written.

                                  CENTERPOINT ENERGY, INC.

                                  By: /s/ DAVID M. MCCLANAHAN
                                      ------------------------------------------
                                      David M. McClanahan
                                      President and Chief Executive Officer

                                  TEXAS GENCO HOLDINGS, INC.

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

                                       17

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                                                               EXHIBIT 2.1(a)(i)

                            CORPORATE CENTER SERVICES

A1.      OFFICE OF THE CHIEF ACCOUNTING OFFICER.

                  The Office of the Chief Accounting Officer includes the
general activities and costs to support the Office of the Chief Accounting
Officer such as salaries for the Chief Accounting Officer and an Executive
Assistant as well as the costs associated with the following corporate centers:

         A.1.1.   Corporate Risk Control.

         The major activities and costs associated with this corporate cost
center include:

         -        Establish and monitor risk policies and limits.

         -        Ensure the adequacy of SBU's infrastructures to comply with
                  established risk control policies, procedures and limits.

         -        Ensure reasonableness of valuation methodologies, assumptions
                  and models.

         -        Provide support and oversight for the development of capital
                  projects and other major commitments.

         -        Provide consulting on risk-related activities as needed.

         -        Support Board of Directors Audit Committee

         A.1.2.   Financial Accounting.

         Major activities and costs associated with this corporate center
include:

         -        Preparation of internal and external financial reports.

         -        Financial analysis of the results of operations.

         -        External audit fees.

         -        Consulting fees relating to financial accounting issues.

         -        SEC compliance reporting.

         -        Accounting support of financing activities.

         -        Accounting support for various strategic planning initiatives.

         -        Financial projections and quarterly performance reviews.

         -        Accounting support on business unit capital projects,
                  acquisitions, etc.

         -        Support Board of Directors Audit Committee

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         A.1.3.   Federal Tax.

         Major activities and costs associated with this corporate center
include:

         -        Federal tax planning.

         -        Preparation of estimates of federal taxes.

         -        Calculation of current and deferred federal tax expense.

         -        Current taxes payable and deferred tax liability.

         -        Preparation of federal income tax returns.

         -        Coordination and response to Internal Revenue Service
                  inquiries and audits.

         -        Preparation and maintenance of international tax data for
                  accrual and dividend planning purposes.

         -        Maintenance of tax systems.

         -        Monitoring proposed tax legislation.

         -        Litigation support for federal tax issues.

         -        Due diligence reviews of tax implications of proposed
                  acquisitions.

         -        Consulting fees related to federal tax issues and strategic
                  planning.

         A.1.4.   State and Local Tax.

         Major activities and costs associated with this corporate center
include:

         -        Preparation of sales and use tax returns.

         -        Preparation of state income and franchise tax returns.

         -        Preparation of estimates and payment of state income taxes.

         -        Calculation of state current and deferred tax expense, current
                  taxes payable, and deferred tax liabilities.

         -        State tax planning.

         -        Coordination and response to state and local tax inquiries and
                  audits.

         -        Costs of consulting fees related to sales, use, and state tax
                  issues, and strategic planning.

         -        Preparation of SFAS 109 accruals.

         -        Performance of due diligence reviews for proposed acquisitions
                  and state income tax estimates for proposed acquisitions.

         -        Monitoring of proposed tax legislation and preparing
                  appropriate response.

         -        Litigation support for state and local tax issues.

                                        2

<PAGE>

         A.1.5.   Property Tax.

         Major activities and costs associated with this corporate center
include:

         -        Payment and review of property taxes and preparation of
                  returns.

         -        Negotiation of property taxes.

         -        Costs of consulting fees related to property and tax issues
                  and strategic planning.

         A.1.6.   Internal Audit.

         The major activities and costs associated with this corporate center
include:

         -        Internal process and financial reviews of business units and
                  business units' functions.

         -        Internal process reviews of corporate functions.

         -        Assist in the external audit.

         -        Review of benefit payments, travel expenses, etc.

         -        Operational audits.

         -        Assist in due diligence reviews of projects, acquisitions,
                  etc.

         -        Participate and supplement corporate risk functions.

         -        Support Board of Directors Audit Committee.

A2.      CORPORATE FINANCE.

                  Corporate Finance includes the general activities and costs
such as salaries of the Vice President Corporate Finance, Treasurer and
executive assistants, and consulting costs related to financings and insurance.
This area also includes the costs and activities associated with the following
corporate cost centers:

         A.2.1.   Financial Services.

         The major activities and costs associated with this corporate cost
center include:

         -        General activities and costs to support the financial services
                  function.

         -        Debt compliance monitoring.

         -        Payment of financing obligations (including interest) and
                  related fees, trust fees, etc.

         -        Review of pension plan portfolio and make funding payments to
                  the pension trust. (Trust Administration)

         -        Trust administration for nuclear decommissioning trust.

                                        3

<PAGE>

         A.2.2.   Cash Management.

         The major activities and costs associated with this corporate cost
center include:

         -        General activities and costs to support cash management
                  including department salaries, secretarial services, and
                  supplies.

         -        Payment of financing obligations (including interest) and
                  related fees.

         -        Daily cash management.

         -        Monitoring bank accounts.

         -        Execution of wire transfers.

         -        Forecasting cash needs.

         -        Managing banking relations in order to resolve problems and to
                  minimize transaction costs.

         A.2.3.   Corporate Insurance.

         The major activities and costs associated with this corporate cost
center include:

         -        General activities and costs to support the insurance benefits
                  group including salaries for department employees.

         -        Internal evaluation of insurance risks and needs.

         -        Consulting costs related to insurance evaluations.

         A.2.4.   Investor Services.

         The major activities and costs associated with this corporate cost
center include:

         -        General activities and costs to support the investor services
                  department including salaries and supplies.

         -        Payment of dividends to shareholders.

         -        Coordination of dividend reinvestment plan.

         -        Mailing of annual reports

         -        Shareholder recordkeeping.

         -        Coordination of shareholder meetings.

         A.2.5.   Corporate Finance.

         The major activities and costs associated with this corporate cost
center include:

         -        General activities and costs to support the corporate finance
                  function.

         -        Evaluation and implementation of optimal capital structures,
                  optimal sources of capital, and the attraction of capital.

         -        Support for investment activities.

         -        Establishment of and preservation of the liquidity.

                                        4

<PAGE>

         -        Establishment and maintenance of relations with the rating
                  agencies, banks, and the fixed income, mezzanine and private
                  equity communities.

         -        Preparation of periodic rating agency presentations.

A3.      INVESTOR RELATIONS.

                  Major costs and activities associated with this corporate cost
center include:

         -        General activities and costs to support the investor relations
                  department including salaries of department employees,
                  secretarial services, travel, and meeting costs.

         -        Communication with the investment community (institutional
                  investors and shareholders) about earnings and business
                  strategies.

         -        Plan and prepare analyst presentations.

         -        Meetings with security analysts and rating agencies.

         -        Prepare financial analysis to support discussions with
                  security analysts and rating agencies.

         -        Prepare print publications (reports/fact sheets) sent to third
                  parties including investors, analysts, shareholders and rating
                  agencies.

         -        Speechwriting for financial presentations/meetings.

A4.      CORPORATE PLANNING

                  The major activities and costs associated with this corporate
cost center include:

         -        General activities and costs to support strategic planning for
                  corporate and business units such as salaries of strategic
                  planning department employees, secretarial services,
                  consulting costs, etc.

         -        Assistance to business units in the development of strategies,
                  goals, and measures.

         -        Economic and financial analysis of business unit and corporate
                  strategies.

         -        Development and analysis of five year strategic forecasts of
                  business units.

         -        Outside consulting costs related to the evaluation of
                  strategic plans of business units and corporate.

A5.      OFFICE OF THE GENERAL COUNSEL.

                  The Office of the General Counsel (Legal Department) is
responsible for managing the legal affairs. The major activities and costs that
are associated with this corporate cost center include:

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<PAGE>

         -        General legal activities and costs to support the corporate
                  office and all business units including salaries of in-house
                  attorneys, other legal professionals, legal assistants,
                  outside counsel fees, travel costs, duplication costs, etc.

         -        Corporate and securities law.

         -        Employment law.

         -        Regulatory law.

         -        Contract law.

         -        Patent law.

         -        Litigation.

         -        Work related to and evaluation of legal claims.

         -        Outside counsel to assist in the above activities.

A6.      CORPORATE COMMUNICATIONS.

                  This corporate center includes those activities and costs
necessary to support the administration and management of corporate
communications. Services include external communications and event sponsorship
with customers, media, financial audiences, and the community at large. The
following corporate cost centers are also a part of corporate communications:

         A.6.1.   Internal Relations.

         The major activities and costs associated with this corporate cost
center include:

         -        General activities and costs to support the internal relations
                  department including department salaries, secretarial service,
                  publications, printing costs, etc.

         -        Internal communication assistance to other business units.

         -        Internal employee communications.

         -        Communication of corporate and business unit visions to the
                  employees.

         -        Employee awards.

         -        Development and maintenance of intranet sites.

         A.6.2.   External Relations.

         -        This corporate center includes the following major functions
                  and the associated costs to support them including salaries of
                  management, other professional and secretarial assistance,
                  outside services for production of print, video and Internet
                  communications materials, outside production costs for events
                  and consulting fees.

                                        6

<PAGE>

         A.6.2.1.          Public Relations, Corporate & Financial
                           Communications

         -        External communication of financial, strategic and general
                  corporate information as well as communications to announce
                  and launch new business ventures. Audiences include national,
                  financial, trade and local news media, stockholders,
                  customers, trade associations and the general public.

         -        Production of annual and quarterly reports to shareholders,
                  executive speeches, corporate brochures and videos and
                  corporate information on Internet sites.

         -        Communications support for unregulated business units,
                  including:

                  -        Response to media inquiries

                  -        Pro-active media relations

                  -        Project communications

                  -        Event coordination

                  -        Selection and supervision of outside public relations
                           firms retained for specific projects

                  -        Screening, selection and speechwriting services for
                           speaking engagements

         A.6.2.2.          Corporate Branding & Promotions

         -        Development and management of the corporate names, logotypes
                  and brand identity standards.

         -        Sponsorships and event marketing activities to create strong
                  external awareness of CenterPoint and the unregulated business
                  units.

         -        Implementation and management of promotional opportunities
                  created for CenterPoint and the unregulated business units
                  through sponsorships.

         -        Management of special events for other corporate centers such
                  as Corporate Community Relations and the unregulated business
                  units.

A7.      GOVERNMENT AFFAIRS.

                  The major activities and costs associated with this center are
the salaries of executives, professionals and executive assistants as well as
consultant and advisor and other costs directly related to legislative advocacy.
This corporate center also includes a number of other cost centers that are
described below:

         A.7.1.   Texas State Relations.

         The major activities and costs associated with this corporate cost
center include:

         -        General activities and costs to support the Texas state
                  governmental relations department including salaries of
                  department employees, secretarial services, state legislative
                  advocacy costs, legislative consulting and advisor costs, and
                  travel costs, etc.

                                       7

<PAGE>

         -        Lobbying activities related to industry issues, environmental
                  issues, taxes, nuclear waste, tort reform, ethics, etc.

         -        Housing accommodations in Austin, Texas.

         A.7.2.   Limestone and Cedar Bayou Conference Centers.

         -        The major activities and costs associated with this corporate
                  cost center are to support the operation and maintenance of
                  the Cedar Bayou Conference Center including salaries of
                  permanent staff and site-related costs.

         A.7.3.   Federal Relations.

         The major costs and activities associated with this corporate cost
center include:

         -        General activities and costs to support the federal
                  governmental relations department including salaries of
                  department employees, secretarial services, federal
                  legislative advocacy costs, federal legislative consulting and
                  advisor costs, and travel costs, etc.

         -        Lobbying activities related to industry issues, PUHCA,
                  environmental issues, taxes, transportation, etc.

         A.7.4.   Third Party Initiatives.

         The major costs and activities associated with this corporate cost
center include:

         -        General activities and costs to support legislative
                  initiatives including salaries of department employees,
                  secretarial services, legislative advocacy costs, legislative
                  consulting and advisor costs, and travel costs, etc.

         -        Preparation of ethics filings (state, local, and federal).

         -        Communication with Third Party Groups to minimize adverse
                  legislation.

         -        Communication with employees encouraging participation of
                  employees in legislative activities.

         A.7.5.   Corporate Community Relations.

         The major costs and activities associated with this corporate cost
center include:

         -        Local and regional charitable contributions and donations.

         -        Coordination of corporate contributions and memberships.

         -        Communication and establishment of relationship with
                  community.

                                        8

<PAGE>

         A.7.6.   Local Government Relations.

         The major costs and activities associated with this corporate cost
center include:

         -        General activities and costs to support the Texas local
                  governmental relations department including salaries of
                  department employees, secretarial services, local legislative
                  advocacy costs, legislative consulting and advisor costs, etc.

         -        Lobbying activities related to industry issues, environmental
                  issues, taxes, franchise taxes, operational ordinances, etc.,
                  with local regulators.

         A.7.7.   State Affairs.

         The major activities and costs associated with this corporate cost
center include:

         -        General activities and costs to support the State Affairs
                  (primarily for states other than Texas) governmental relations
                  department including salaries of department employees,
                  secretarial services, state legislative advocacy costs,
                  legislative consulting and advisor costs, and travel costs,
                  etc. Outside consulting costs are direct billed to the
                  appropriate SBU.

         -        Lobbying activities related to acquiring, siting, licensing,
                  operating and maintaining power plants along with
                  deregulation, environmental issues, taxes, etc.

A8.      CORPORATE HUMAN RESOURCES

         A.8.1.   Compensation Design and Delivery

         Major activities and costs associated with this corporate center
include:

         -        Provide consultation and counseling on compensation issues.

         -        Provide data input, execution and retrieval for compensation
                  activities including planning, promotions, adjustments,
                  recognition, etc.

         -        Design and deliver base compensation, variable compensation,
                  long-term incentives, and recognition/retention programs.

         A.8.2.   Benefits Design and Delivery

         Major activities and costs associated with this corporate center
include:

         -        Design and deliver pension, savings, medical insurance, life
                  insurance, and other related health and welfare programs.

         -        Design and deliver annual enrollment process and other benefit
                  plan models.

         -        Focal point for providing salary survey and market information
                  for compensation planning.

                                        9

<PAGE>

         -        Lead and manage benefits call center relationship process to
                  insure client satisfaction with benefit delivery process.

         -        Perform due diligence of all acquisitions and divestitures
                  related to benefit plans.

         -        Deliver benefit programs, processes, and governance plans for
                  implementation within business/functional units.

         A.8.3.   Recruiting, Staffing and Selection

         Major activities and costs associated with this corporate center
include:

         -        Design, develop and implement internal and external hiring
                  process including college campus, local markets, and global
                  experienced candidate selection.

         -        Develop interview and selection process.

         -        Manage contingent workforce contracts and relationships.

         -        Manage labor and union relationships.

         -        Manage separation process and policy including outplacement
                  service providers.

         -        Develop and administer relocation process both on a domestic
                  and an international basis.

         -        Provide for effective SAP interface and implementation of
                  technology support and resources to provide reporting, data
                  management, and user-friendly applications for client use.

         -        Focal point for corporate diversity process and affirmative
                  action plans.

         -        Design and manage new hire orientation and related employee
                  processing activities in conjunction with business/functional
                  units, including pre-employment screening processes and
                  testing activity.

         -        Manage and administer unemployment and worker compensation
                  claims.

         A.8.4.   Organization Effectiveness and Learning

         Major activities and costs associated with this corporate center
include:

         -        Design and/or select learning resources to support client
                  needs and build competencies.

         -        Deliver tools and services to clients to facilitate
                  organizational assessment, benchmarking, problem solving,
                  process re-engineering, breakthrough thinking, change
                  management, and succession planning.

         -        Manage external provider relationships for delivery of
                  training and other learning/assessment resources.

         -        Manage and schedule internal learning facilities and resources
                  including training rooms, conference sites, materials, and
                  distance learning processes.

                                       10

<PAGE>

         -        Tool development and implementation process for delivery of
                  Individual Performance Improvement Process.

A9.      REGULATORY

         Major activities and costs associated with this corporate center
include:

         -        Identifying, analyzing and communicating key issues related to
                  the public, local, state and federal regulators.

         -        Preparation of filings.

         -        Participation in hearings.

         -        Communication to internal and external stakeholders.

         -        Regulatory planning and policy.

                                       11

<PAGE>

                                                              Exhibit 2.1(a)(ii)

                         INFORMATION TECHNOLOGY SERVICES

SERVICE 1: DATA CIRCUIT MANAGEMENT

         -    Circuit Connection and Internal Distribution

         -    Capacity Monitoring

         -    Circuit Consolidation Services

         -    Carrier Management and Administration (Life Cycle Management)

         -    Access to CenterPoint Private Communication Network

         -    Software/Hardware Maintenance for Data Network Components

         -    Vendor and Contract Management

         -    Problem Identification & Resolution

SERVICE 2: DESKTOP DATA DEVICE SERVICES

         -    Desktop Connectivity

         -    WAN Access & Transport

         -    Information Security

         -    Nerve Center Monitoring

         -    Vendor Contract Management

         -    Problem Identification & Resolution

SERVICE 3: SOLUTIONS DELIVERY (PROGRAMMING)

         SAP PRODUCTION SUPPORT

               -     SAP Applications/Development

               -     Modifications/Enhancements

               -     Deployment/Training

               -     Functional Teams

               -     Problem Identification & Resolution.

                                        1

<PAGE>

SERVICE 4: MAINFRAME OPERATIONS

         PART 1: CPU UTILIZATION & MAINFRAME DATA STORAGE

               -     Monitoring by IT Nerve Center

               -     Disaster Recovery Services for non-SAP mainframe
                     applications

               -     Migration and automated scheduling of corporate
                     applications

               -     Planning, design, acquisition, installation of hardware and
                     software upgrades

               -     Performance tuning

               -     Capacity planning and analysis (CPU, DASD, tape)

               -     Microfiche processing

               -     Online report viewing and archival

               -     White paper print (mainframe application reports)

               -     Distribution of mainframe reports to LAN printers

               -     Enterprise Change Management

               -     SAP infrastructure support

               -     Problem Identification & Resolution

         PART 2: DEDICATED SERVER SUPPORT (NON-SHARED HARDWARE)

               -     Monitoring by IT Nerve Center

               -     Problem identification and resolution

               -     Backup and Recovery

               -     Migration and automated scheduling of corporate
                     applications

               -     Planning, design, acquisition, installation of hardware and
                     software upgrades

               -     Performance tuning

               -     Capacity planning and analysis

               -     Enterprise Change Management

                                        2

<PAGE>

               -     Vendor and Contract Management

               -     Problem Identification & Resolution

         PART 3: BILL PRINT

               -     OCE High-speed mainframe printers

               -     Staffing, equipment maintenance, usage, supplies, etc. to
                     support bill print

               -     Planning, design, acquisition, installation of hardware and
                     software upgrades

               -     Disaster Recovery Services (successful test in April 2000)

               -     Problem Identification & Resolution

SERVICE 5: TELECOMMUNICATIONS

         PART 1: TELEPHONE BASIC LINE

               -     Operation and maintenance of the telephone switch network

               -     Telephone Lines, Fax Machine Lines, and Modem Lines

               -     Video/Audio Teleconference Services

               -     Voice Mail and Voice Processing Services

               -     Caller ID Services

               -     411 Information / 911 Emergency Services

               -     Security

               -     Call Feature Options

               -     Problem Identification & Resolution

         PART 2: CALL CENTER BASIC LINE

               -     Operation and Maintenance of the Phone System and New
                     Applications

               -     Private Network Connectivity

               -     Agent Consoles and Headsets

                                        3

<PAGE>

               -     Detailed Real-Time / Historical Call Traffic Management
                     Reports

               -     Security

               -     Problem Identification & Resolution

         PART 3: VOICE SERVICES MOVES/ADDS/CHANGES

               -     Consultation and technician time to add, move, or
                     reconfigure voice assets

               -     Voice desktop telephone lines, modem lines, fax machine
                     lines

               -     Miscellaneous cables and connectors

         PART 4: RADIO SERVICES

               -     Radio frequency coordination

               -     Maintenance of Federal Communication Commission licensing

               -     Federal Aviation Administration regulatory compliance for
                     radio towers

               -     Utility Telecommunication Counsel activities

               -     Local, state, and national regulatory activities

                                        4

<PAGE>

                                                             EXHIBIT 2.1(a)(iii)

                                 SHARED SERVICES

FACILITIES MANAGEMENT.

         Facilities Project Management.

         -        Scope development

         -        Cost and schedule estimation

         -        Design and engineering contract documents

         -        Construction management services

         -        Employee relocation

         -        Furniture acquisition and relocation

         -        Cost tracking and reporting services

         Building Operations.

         -        Janitorial services

         -        Utility services

         -        Building repairs and maintenance

         -        Employee relocations and moves

         -        General operating requirements

         Real Estate.

         -        Facilities Management coordinates the sale of surplus
                  properties, the acquisition of properties and lease
                  negotiations

FINANCIAL SERVICES.

         Payroll Services.

         -        Issue regular payroll checks

         -        Issue special payroll checks

         -        Issue cash advances

         -        Process employee per diem expense reimbursements

         -        Process travel reimbursements

         -        Process educational assistance payments

         -        Process relocation allowances

         -        Comply with union agreements

         -        Prepare and file payroll related tax returns

         -        Issue employee W-2 forms and certain non-employee 1099s

         -        Maintain payroll records

         -        Provide litigation and audit support

         -        Comply with all payroll related reporting requirements

                                        1

<PAGE>

         -        Provide requested client support

         Remittance Processing Services

         -        Receive and initiate bank deposits for customer payments

         -        Prepare incoming mail for processing

         -        Capture data image and perform data entry of payment
                  information

         -        Initiate transmission of data to the host mainframe for
                  customer payment update

         -        Provide support for all electronic payments

         -        Perform image archiving of stubs and checks

         -        Process returned checks

         -        Provide customer/vendor interaction and resolution of payments

         -        Return correspondence sent in with customer payments to
                  central point at each business unit

         -        Perform timely reconciliation of general ledger accounts

         -        Collect and return to business unit the generated forms
                  soliciting customer participation in special programs (i.e.
                  Bank Drafts Balanced Billing, Good Neighbor, etc) which
                  customer returns with payment

         Check Disbursement Services.

         -        Printing of checks on standard check stock

         -        Inserting checks into a standard envelope

         -        Providing separate check inserts for up to two preapproved
                  standard inserts

         -        Sorting checks for distribution and delivery to mail room

         -        Maintenance of check printing control log

         -        Processing and posting of returned checks

         -        Investigation of fraudulent checks

         -        Processing exception items to the bank positive pay file

         Corporate Bank Reconciliation.

         -        Timely reconciliation of General Ledger cash accounts to bank
                  account balances

         State Escheat Reporting.

         -        State escheat reporting including notification letters and
                  required reporting. Maintenance of third party software and
                  database required for escheat reporting

         Corporate Travel Services.

         Professional business travel and off site meeting services, including:

                                        2

<PAGE>

         -        Air, hotel and car reservations

         -        Performs other travel support such as visa and passport
                  services

         -        Offers various alternatives for communicating travel requests
                  (telephone, fax, e-mail and self booking tools)

         -        Provides training / tips and support in making travel
                  arrangements

         -        Provides professional meeting planner to assist in
                  arrangements including facilities, audio-visual equipment,
                  catering, meeting logistics & contract negotiations

         Business Consulting.

         Financial Services provides business consulting services on request at
         hourly billing rates. Services can include client satisfaction program
         assistance, focus group facilitation, and new business services.

OFFICE SUPPORT SERVICES.

         Mail Services.

         -        Routing and delivery of interoffice mail, U.S. mail, certified
                  mail and overnight mail (FedEx, UPS, Airborne)

         -        Mail metering; maintenance of PO boxes and postal permits

         -        Consulting on Company and U. S. Postal Service processes and
                  requirements

         -        Daily pick-up and delivery for CenterPoint locations

         Graphics

         -        Original graphic design and production services for brochures,
                  newsletters, monthly publications, posters, invitations,
                  calendars, quarterly reports, annual reports, and icons/logos

         -        Original illustrations or photography as needed to support
                  design projects

         -        Original design and production of signage and banners

         -        Original Web page design and production

         -        Trade show display and promotional pieces

         -        Project research and strategy planning

         -        Consulting and project coordination

         -        Research and maintenance of image library to support design
                  projects

         Office Supplies.

         Product evaluations; participation in product procurement; maintenance
         of standard (stock) supply lists; product delivery for standard and
         non-standard supplies; and vendor liaison activities.

         Forms

         -        Forms analysis

                                        3

<PAGE>

         -        Business unit consulting and support for forms
                  preparation/forms needs Forms design for new and revised forms

         -        Maintenance of forms inventory levels, production and
                  distribution

         -        Participation in negotiation and maintenance of vendor
                  contracts

         -        Forms delivery via vendor to site, desktop delivery or LAN
                  distribution

         -        Maintenance of PowerForms software including strategic
                  direction, training, and business unit support

         Insert Operations

         -        Insert and mail customer bills and other high volume mailings
                  using high speed inserting equipment

         -        Order and stock customer bill envelopes and other envelopes as
                  requested by clients

         -        Obtain/maintain lowest applicable postage rate for mailings

         -        Maintain U.S. Postal Service postage payment account

         -        Meet all U.S. Postal Service preparation requirements for high
                  volume mailers

         -        Maintain documentation required to support high volume
                  mailings for Postal discount

         -        Provide consultation on Company and U.S. Postal Service
                  requirements for mailings

         Document Center.

         -        High speed duplicating

         -        Network publishing

         -        Mainframe and variable print with postal discount capability

         -        Color copying

         -        Engineering maps reproduction

         -        Full bindery/finishing

         -        Consulting and support on document preparation and printing
                  requirements.

         -        Brochures

         -        Newsletters

         -        Monthly publication

         -        - Forms

         -        - Envelopes

         -        - Marketing and promotional pieces

         -        - Invitations

         -        Business cards

         -        Letterheads

         -        Calendars

                                        4

<PAGE>

         -        Annual reports

         Convenience Copiers

         -        Arrange acquisition and maintain low-volume capacity copiers
                  in various locations for the convenience of business units
                  (client pays directly for copier)

         -        Administer copier contract and ensure contract compliance

         -        Perform needs analysis for business unit equipment and
                  consulting on relocations, removals, upgrades or downgrades,
                  and new products

         -        Provide ongoing product evaluations

         -        Communicate status of equipment acquisitions, removal, etc.

         -        Maintain accurate equipment inventory and volume records

         Records Management

         -        Provide storage options for clients files through contract
                  with third party provider

         -        Coordinate Retrieval of boxes / files for client review

         -        Develop and maintain a retention schedule that meets
                  operational and legal requirements

         -        Provide notification when files reach scheduled destruction
                  date and acquires appropriate documentation to destroy records

         -        Provide training and business unit support to evaluate file
                  storage options

PROCUREMENT.

         Purchasing

         -        Establish and maintain vendor agreements

         -        Provide IT procurement support - software and license

         -        Manage the vendor base and measures vendor performance

         Logistics

         -        Coordinate waste disposal with third party vendor, including
                  disposal of hazardous wastes and PCBs (clients direct billed
                  by vendor for third party services)

         -        Provide material handling and transportation services to
                  position hazardous waste for shipment to disposal facilities

         -        Manage disposal contractor services

         -        Coordinate collection and classification of trash and waste
                  for appropriate disposal through third party contract (clients
                  direct billed by vendor for third party services)

         -        Schedule pick up of trash containers and process documents for
                  payment

         -        Prepare trash disposal manifests as necessary

                                        5

<PAGE>

         Accounts Payable Automated Feed.

         -        Oversee automated feeds of payment requests for goods and
                  services in the Accounts Payable system and provide
                  reconciliation

         -        Correct automated entry rejects

         Accounts Payable Automated ERS/EDI.

         -        Oversee automated entry of invoices into the Accounts Payable
                  system via purchase order evaluated receipt settlement and
                  electronic data interchange

         Accounts Payable Manual Invoice Processing.

         -        Process invoices manually into the Accounts Payable system

         -        Perform account code validation

         -        Validate and identify material codes

         -        Confirm to Purchase Order

         -        Prepare correcting journal entries for Accounts Payable
                  transactions

         -        Image records and supporting documentation via FileNet for all
                  non-automated invoices to support records retention and
                  retrieval

         Accounts Payable Manual Invoice Processing without imaging.

         -        Process invoices manually into the Accounts Payable system

         -        Perform account code validation

         -        Validate and identify material codes

         -        Confirm to Purchase Order

         -        Prepare correcting journal entries for Accounts Payable
                  transactions

         Accounts Payable Ancillary.

         -        Vendor file maintenance

         -        Check processing activities

         -        State escheat process

         -        Returned check process

         -        Bank stop-payment activities

         -        Control report monitoring and correction

         -        Interactive Voice Response system maintenance

         -        Form 1099 tax reporting

         -        General ledger account reconciliation

         -        FileNet imaging system maintenance

         -        Production of on-demand standard Accounts Payable reports

         -        Monitoring procurement card exception reports

         -        Reconciliation of procurement card activity

                                        6

<PAGE>

         -        Coordination of year-end invoice accrual process

         -        Requested Accounts Payable workshops and training

         Accounts Payable Ancillary without imaging.

         -        Vendor file maintenance

         -        Check processing activities

         -        State escheat process

         -        Returned check process

         -        Bank stop payment activities

         -        Control report monitoring and correction

         -        Interactive Voice Response system maintenance

         -        Form 1099 tax reporting

         -        General ledger account reconciliation

         -        Production of on-demand standard Accounts Payable reports

         -        Monitoring procurement card exception reports

         -        Reconciliation of procurement card activity

         -        Coordination of year-end invoice accrual process

         -        Requested Accounts Payable workshops and training

         Accounts Payable Emergency Checks.

         -        Process invoices manually into the Accounts Payable system

         -        Perform account code validation

         -        Validate and identify material codes

         -        Perform vendor file maintenance (as required)

         -        Image records and supporting documentation via FileNet to
                  support records retention and retrieval

         -        Oversee manual check generation and distribution

         Inventory Accounting.

         -        Reconcile inventory accounts within the Accounts Payable
                  system.

         -        Assist in audit of inventory controls and inventory levels

         Supplier Diversity

         -        Manage the GSA Subcontracting Plan and the Five-Year Plan
                  Procurement Initiatives

         -        Monitor MWBE procurement processes and procedures and
                  associated results

         -        Respond to Federal, State, and Local
                  reports/filings/issues/concerns/requests

         -        Plan and implement internal/external training, workshops,
                  networking, and recognition events

                                        7

<PAGE>

         -        Implement, evaluate, and monitor Second-Tier expectations and
                  requirements

         -        Participate in MWBE outreach and development activities

         -        Coordinate internal Advisory Council

         -        Assist clients with bids requiring MWBE participation/Update
                  and enhance MWBE database

         -        Liaison to political, business, and community organizations
                  and councils with strong interest in supplier diversity

         -        Publicize and communicate supplier diversity emphasis &
                  awareness internally/externally

CORPORATE SECURITY

         -        Provide services necessary to plan and implement physical
                  security measures for the protection of Reliant Energy
                  personnel and assets

         -        Manage work requirements for contracted security personnel
                  including contracted guard services and off-duty police
                  officers

         -        Plan, coordinate installation and monitor electronic security
                  systems

         -        Develop and maintain security policies and site security
                  procedures, including periodic assessments for compliance and
                  functionality

         -        Provide security support for employees traveling or residing
                  outside the U.S.

         -        Perform confidential investigative services

         -        Provide pre-employment verification

ADMINISTRATIVE SUPPORT.

         Business Services.

         -        Shared Services budgeting and planning functions

         -        Creation, maintenance and reporting for the client
                  satisfaction programs

         -        Coordination and compilation of benchmarking/outsourcing
                  studies

         -        Special projects/reports

                                        8

<PAGE>

                                                             EXHIBIT 2.7(b)(iii)

                                 SHARED SERVICES
                        TERMINATION NOTIFICATION PERIODS

SHARED SERVICES

<TABLE>
<CAPTION>
TYPE OF SERVICE                                        TERMINATION PERIOD
<S>                                                    <C>
FACILITIES MANAGEMENT
1. Facilities Project Management                       Same as building lease
2. Building Operations                                 Same as building lease
3. Real Estate                                         60 days or end of third party broker agreement

FINANCIAL ADMINISTRATION
1. Payroll                                             120 days
2. Remittance Processing                               120 days
3. Check Disbursement                                  120 days
4. Corporate Bank Reconciliation                       60 days
5. Travel                                              90 days

OFFICE SUPPORT SERVICES
1. Office Mail Services                                Same as building lease
2. Insert Operations                                   120 days
3. Graphics                                            60 days
4. Office Supplies                                     60 days
5. Forms                                               60 days
6. Document Center                                     60 days
7. Convenience Copiers                                 60 days
8. Appliance Sales                                     60 days
9. Records Management                                  120 days

PROCUREMENT
1. Purchasing                                          90 days
2. Logistics                                           90 days
3. Accounts Payable Automated                          120 days
4. Accounts Payable Manual                             120 days
5. Investment Recovery                                 90 days
6. Waste Disposal                                      90 days
7. Rubber Goods                                        90 days
8. Trash Disposal                                      90 days

CORPORATE SECURITY
1. Security Services                                   90 days (or same as building lease)

ADMINISTRATIVE SUPPORT
1. Support Charges                                     function of other services
</TABLE>

Note: Current estimate of lease expiration at Reliant Energy Plaza is December
2004.

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