Document:

<PAGE>

                                                                  EXHIBIT 4(KKK)

                                 19 JANUARY 2001

                     TXU EUROPE MERCHANT PROPERTIES LIMITED
                                  (as Landlord)

                     TXU EUROPE MERCHANT GENERATION LIMITED
                                   (as Tenant)

                          EASTERN GROUP FINANCE LIMITED
                                  (as Trustee)

                              TXU EUROPE GROUP plc
                                 (as Guarantor)

                            TXU EUROPE POWER LIMITED
                                 (as Guarantor)

                             EASTERN ELECTRICITY plc

                                BARCLAYS BANK PLC
                                SOCIETE GENERALS
                         THE ROYAL BANK OF SCOTLAND plc
                            THE TORONTO-DOMINION BANK
                                     UBS AG
                      WESTDEUTSCHE LANDESBANK GIROZENTRALE
                      BANK OF AMERICA INTERNATIONAL LIMITED
                                   (as Banks)

                                BARCLAYS BANK PLC
                                   (as Agent)

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

                                SUPPLEMENTAL DEED

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

<PAGE>

<TABLE>
<CAPTION>
                                TABLE OF CONTENTS

CLAUSE                                                                          PAGE
<S>                                                                             <C>

1.       INTERPRETATION............................................................2

         Definitions...............................................................2

2.       GENERAL...................................................................2

3.       REPRESENTATIONS AND WARRANTIES............................................3

4.       PREPAYMENT, REASSIGNMENT AND RELEASE......................................3

         Rent Prepayment to Banks..................................................3

         Reassignment..............................................................3

         Release...................................................................4

5.       INTERACTION WITH ASSIGNMENT AND GUARANTEE.................................4

6.       INDEMNITY.................................................................5

7.       DEEMED INCLUSION OF PROVISIONS............................................5

8.       CONTINUATION OF TRANSACTION DOCUMENTS.....................................5

9.       CUSTODY...................................................................5

10.      COUNTERPARTS..............................................................5

11.      GOVERNING LAW.............................................................5

SCHEDULE I.........................................................................6

         Part I....................................................................6

         Part II...................................................................7

         Bank Account Details for Banks............................................7
</TABLE>

<PAGE>

THIS DEED is made on 19th January 2001

BETWEEN:

TXU EUROPE MERCHANT PROPERTIES LIMITED (formerly Eastern Merchant Properties
Limited) (registered in England and Wales No. 3181383) whose registered office
is at Wherstead Park, Wherstead, Ipswich, Suffolk IP9 2AQ (the Landlord);

TXU EUROPE MERCHANT GENERATION LIMITED (formerly Eastern Merchant Generation
Limited) (registered in England and Wales No. 03116225) whose registered office
is at Wherstead Park, Wherstead, Ipswich, Suffolk IP9 2AQ (the Tenant);

EASTERN GROUP FINANCE LIMITED (registered in England and Wales No. 2937764)
whose registered office is at Wherstead Park, Wherstead, Ipswich, Suffolk IP9
2AQ (the Trustee);

TXU EUROPE GROUP plc (formerly Eastern Group plc) (registered in England and
Wales No. 3247622) whose registered office is at Crown House, 51 Aldwych, London
WC2B 4AX (a Guarantor);

TXU EUROPE POWER LIMITED (formerly Eastern Generation Limited) (registered in
England and Wales No. 2353756) whose registered office is at Wherstead Park,
Wherstead, Ipswvich, Suffolk IP9 2AQ (a Guarantor);

EASTERN ELECTRICITY plc (registered in England Wales No. 2366906) whose
registered office is at Wherstead Park, Wherstead, Ipswich, Suffolk IP9 2AQ;

THE BANK listed in Schedule 1, Part I as Banks (together the Banks);

BARCLAYS BANK PLC (registered in England and Wales No. 1026167) whose registered
office is at 54 Lombard Street, London EC3P 3AM as agent (the Agent),

WHEREAS:

(A)      This Deed is supplemental to the Finance Documents.

(B)      The Tenant wishes to prepay all outstanding Rents on Friday, 19 January
         2001 and the Banks and the Agent have agreed, in consideration of such
         prepayment to release the Tenant, the Landlord and the Guarantors from
         certain of their obligations under the Finance Documents subject to the
         conditions contained in this Deed.

<PAGE>

      Interpretation

Definitions

1.1   In this Deed (including the Recitals), unless the context otherwise
requires, the expressions defined in the Assignment or the Guarantee have the
some meanings and in addition, the following expressions have the following
meanings:

Assignment means the Deed of Assignment of Rents dated 28 October 1996 between
the Landlord, the Trustee, certain of the Banks and the Agent as consented to by
the Tenant and as amended and supplemented prior to the date hereof;

Custodian means Barclays Private Bank and Trust Limited;

Custody Deed means the custody deed dated 28 October 1996 between the Landlord,
the Trustee, certain of the Banks and the Custodian;

Effective Date means the later of (a) Friday, 19 January 2001 or such other date
as the parties may agree in writing and (b) the date on which the Banks receive
all amounts due and payable under this Deed;

Entitlement means in relation to any Bank, the portion of the Prepayment Amount
to which that Bank is entitled; expressed as a percentage and shown in the
column headed "Entitlement" opposite the relevant Bank's name in Part I of
Schedule 1;

Finance Documents means the Assignment and the Guarantee and Finance Document
means either of them;

Guarantee means the Deed of Guarantee and Indemnity dated 28 October 1996
between the Guarantors, the Agent and certain of the Banks, inter alia, as
amended and supplemented prior to the date hereof;

Prepayment means the prepayment of the Aggregate Outstanding Rents and certain
other amounts by the Tenant to the Agent pursuant to clause 4.1;

Prepayment Amount means(pound)191,949,004.56;

Waiver Fee Amount means the Waiver Fee due and payable (together with applicable
VAT) on the Effective Date in accordance with the Waiver Fee Letter;

Waiver Fee Letter means the letter dated 3rd January 2001 from the Agent to
certain of the parties hereto, inter alia.

1.2   The construction provisions of clauses 1.2 and 1.3 of the Guarantee shall
be deemed to be incorporated herein and shall apply to the terms of this Deed.

      GENERAL

2.(a) This Deed is supplemental to the Finance Documents, and each Finance
      Document shall be read and construed subject to this Deed.

                                                                          Page 2

<PAGE>

(b)  This Deed is also supplemental to the Transaction Documents and references
     to the Transaction Documents shall be deemed to include a reference to this
     Deed.

     REPRESENTATIONS AND WARRANTIES
3.   Each party to this Deed hereby represents and warrants to each other on the
     date hereof:

(a)  it is a company duly incorporated and validly existing under the laws of
     its jurisdiction of incorporation;

(b)  it has power to enter into this Deed and to exercise its rights and perform
     its obligations hereunder, and all corporate or other action required to
     authorise its execution of this Deed and its performance of its obligations
     hereunder has been duly taken;

(c)  its execution of this Deed and its exercise of its rights and performance
     of its obligations hereunder will not contravene any provision of law,
     statute, rule or regulation to which it is subject, or violate any
     provision of its Memorandum or Articles of Association or any agreement or
     other instrument by which it may be bound in any case where such
     contravention or violation could reasonably be expected to have a material
     adverse effect on its ability to perform its obligations under this Deed or
     the binding nature of such obligations; and

(d)  all governmental or other authorisations, approvals or consents (if any)
     required by it for the execution and delivery by it of this Deed, for the
     exercise by it of its rights and the observance and performance by it of
     all of its obligations and duties hereunder have been obtained and are in
     full force and effect.

     PREPAYMENT, REASSIGNMENT AND RELEASE
Rent Prepayment to Banks

4.1  Notwithstanding anything to the contrary in the Finance Documents, on 19
     January 2001 the Tenant shall pay to the Banks in same day funds the
     Prepayment Amount and the Waiver Fee Amount.

The Prepayment Amount shall be divided amongst the Banks in accordance with each
Banks respective Entitlement with the amounts the Tenant shall pay to each Bank
being shown in the column headed "Prepayment Amount Portion" in Part I of
Schedule 1. Such payment shall be made to the Banks for the credit of their
respective bank accounts as set out in Part II of Schedule 1.

Reassignment

4.2  In consideration of, and following receipt in full by the Banks of the
Prepayment Amount and the Waiver Fee Amount, the Trustee hereby reassigns with
full title guarantee to the Landlord all the Trustee's right, title and interest
in and to the Rents and in and to the benefit of the Tenant's covenant in each
Lease to pay the Rents falling due on the First Rent Day and thereafter during
the Assignment Period in accordance with such Lease and the right to demand,
accelerate, sue for, recover and give receipt for the Rents and any amount of
Rents received by the Landlord, including, without limitation, pursuant to the
right to demand,

                                                                          Page 3

<PAGE>

accelerate, sue for and recover the Rents, as assigned to the Trustee pursuant
to the Assignment.

Release

4.3   In consideration of the Prepayment and subject to receipt in full by the
Banks of the Prepayment Amount, the Waiver Fee Amount and all other amounts due
under the Finance Documents on the Effective Date (if any), the Banks with
effect from the Effective Date, release and discharge the Tenant, the Trustee,
the Landlord anal the Guarantors from their obligation to pay the Rents to each
Bank.

      Interaction with Assignment and Guarantee
5.1   Upon irrevocable payment in full of any amount expressed to be payable
under Clause 4, each Bank agrees that with effect from the Effective Date:

(a)   the representations and warranties contained in Clause 3.1 of the
      Guarantee shall cease to apply (but without prejudice to any claim arising
      in respect of such representations or warranties given on or prior to the
      Effective Date);

(b)   the covenants contained in sub-Clauses 4.1 (a) to (i), and (k) to (y),
      Clauses 4.3, 4.4 and 4.5, 5(b) and (c) and the provisions of Clauses 16.1
      (save in relation to any claim arising thereunder as a result of the
      circumstances or the occurrence of any of the events specified in Clause
      12) 16.2, 16.3, 16.4, 17.1, 17.2, 18.1 and 20, and 21.2 and 21.3 (save in
      relation to any claim arising under Clause 21.2(i) and 21.3(i) in respect
      of the period prior to the Effective Date) of the Guarantee shall cease to
      apply;

(c)   the covenants contained in Clause 4.1(z) and Clause 5(a) of the Guarantee
      shall be amended to read as follows:

               "4.1(z) procures that there is maintained in accordance with good
                industry practice third party liability insurance in respect of
                the Properties to the reasonable satisfaction of the Agent
                (acting in accordance with the instructions of an Instructing
                Group)."

               "5(a) to procure that there is maintained in accordance with good
                industry practice third party liability insurance in respect of
                the Properties to the reasonable satisfaction of the Agent
                (acting in accordance with the instructions of an Instructing
                Group)";

(d)   the representations and warranties contained in Clauses 7 and 8 of the
      Assignment shall cease to apply (but without prejudice to any claim
      arising in respect of such representations and warranties given on or
      prior to the Effective Date); and

(e)   the covenants contained in Clauses 5 and 6 of the Assignment shall cease
      to apply in respect of the Rents.

5.2   The parties to this Deed agree that Clause 2.5 of the Assignment shall be
disapplied in relation to the receipt by the Banks of the Prepayment Amount and
the Waiver Fee Amount on the Effective Date.

                                                                          Page 4

<PAGE>

      Indemnity
6.    Each of the Guarantors as principal obligor hereby jointly and severally
agrees irrevocably and unconditionally to indemnify the Agent and each Bank and
each of their Affiliates in full on receipt of a demand served on each of them
in writing, on an after tax basis against all liability, losses, claims, costs,
charges and expenses which are suffered or properly incurred by it or a Relevant
Participant or any of their Affiliates (a loss) and any costs, charges and
expenses to which it or they may be subject or which it or they may properly
incur (a charge) as a consequence of the operation of, or the transactions
contemplated by, this Deed including, without limitation, any loss or charge on
account of funds borrowed, contracted for, allocated or utilised to fund or
hedge any amount payable under any Finance Document or Participation Agreement.
A certificate prepared in good faith by the Agent of amounts payable by the
Guarantor to the Banks under this clause shall be conclusive in the absence of
manifest error.

      Deemed Inclusion of Provisions
7.    The provisions of Clauses 21.4, 21.6, 21.7, 21.8, 21.9, 21.10, 21.11, 23,
25, 29(iv) and (vi), 30, 31, 32, 33, 35, 36, 37, 40 and 41 of the Guarantee
shall apply to this Deed as if set out in full (mutatis mutandis) but as if
references in those provisions to any Transaction Document were references to
this Deed.

      Continuation of Transaction Documents
8.    Except as expressly provided is this Deed, the Guarantee and the
Assignment shall continue in full force and effect.

      Custody
9.    Each of the parties to this Deed agree that this Deed shall constitute a
Custody Document as defined in the Custody Deed and shall be held by the
Custodian in accordance with the terms of the Custody Deed, and the provisions
of the Custody Deed shall apply thereto mutatis mutandis.

      Counterparts
10.   This Deed may be executed in any number of counterparts each of which when
executed and delivered is an original, but all the counterparts together shall
constitute the same agreement.

      Governing Law
11.   This Deed is governed by and shall be construed in accordance with English
law.

IN WITNESS whereof this Deed has been duly executed as a deed and delivered on
the date stated at the beginning of the Deed.

                                                                          Page 5

<PAGE>

                                     SCHEDULE I

                                       Part I

                                           Entitlement      Prepayment
The Banks                                  (approximate)    Amount Portion

Barclays Bank PLC                           8.04895007%     (pound)15,449,879.53

SocieteGenerale                            16.66666667%     (pound)31,991,500.76

The Royal Bank of Scotland plc             16.66666667%     (pound)31,991,500.76

The Toronto-Dominion Bank                  16.66666667%     (pound)31,991,500.76

UBS AG                                     16.66666667%     (pound)31,991,500.76

Westdeutsche Landesbank Girozentrale       16.66666667%     (pound)31,991,500.76

Bank of America International Limited       8.61771660%     (pound)16,541,621.23

                                                                          Page 6

<PAGE>

                                     Part II

                         Bank Account Details for Banks

-------------------------------------- ----------------------------------------
Banks                                          Account Details
----                                           ---------------

-------------------------------------------------------------------------------
Barclays Bank PLC                              A/C No.:        2808 8306
                                               Sort Code :     20-00-34
                                               Bank:           Barclays Bank PLC

-------------------------------------------------------------------------------
SocieteGenerale                                A/C No.:        9029 1382
                                               Sort Code :     20-00-00
                                               Bank:           Barclays Bank PLC

-------------------------------------------------------------------------------
The Royal Bank of Scotland plc                 A/C No.:        8002 8398
                                               Sort Code :     20-00-00
                                               Bank:           Barclays Bank PLC

-------------------------------------------------------------------------------
The Toronto-Dominion Bank                      A/C No.:        8096 5383
                                               Sort Code :     20-00-00
                                               Bank:           Barclays Bank PLC

-------------------------------------------------------------------------------
UBS AG                                         A/C No.:        3093 5387
                                               Sort Code :     20-00-00
                                               Bank:           Barclays Bank PLC

-------------------------------------------------------------------------------
Westdeutsche Landesbank                        A/C No.:        1083 3487
Girozentrale                                   Sort Code :     20-00-00
                                               Bank:           Barclays Bank PLC

-------------------------------------------------------------------------------
Bank of America International                  A/C No.:        8069 5394
Limited                                        Sort Code :     20-00-00
                                               Bank:           Barclays Bank PLC
-------------------------------------------------------------------------------

                                                                          Page 7

<PAGE>

SIGNED as a DEED by

/s/ C. Byrne
-------------------------------------------
As attorney for TXU                        )
EUROPE MERCHANT PROPERTIES                 ) /s/ C. Byrne
LIMITED in the presence of:                )

Witness: /s/ N. Ferguson

Name: Nicole Ferguson

Occupation: Corporate Manager

Address:      BARCLAYS PRIVATE BANK & TRUST LIMITED
              P.O. Box No. 82, 39-41 Broad Street,
              St. Heiler, Jersey JE4 8PU, Channel Islands

SIGNED as a DEED by

/s/ C. Byrne
------------------------------------------
As attorney for TXU                       )
EUROPE MERCHANT GENERATIONS               ) /s/ C. Byrne
LIMITED in the presence of:               )

Witness: /s/ N. Ferguson

Name: Nicole Ferguson

Occupation: Corporate Manager

Address:   BARCLAYS PRIVATE BANK & TRUST LIMITED
           P.O. Box No. 82, 39-41 Broad Street,
           St. Heiler, Jersey JE4 8PU, Channel Islands

SIGNED as a DEED by

/s/ C. Byrne
------------------------------------------
As attorney for EASTERN                   )
GROUP FINANCE LIMITED                     ) /s/ C. Byrne
in the presence of:                       )

Witness: /s/ N. Ferguson

Name: Nicole Ferguson

Occupation: Corporate Manager

Address:      BARCLAYS PRIVATE BANK & TRUST LIMITED
              P.O. Box No. 82, 39-41 Broad Street,
              St. Heiler, Jersey JE4 8PU, Channel Islands

                                                                         Page 8

<PAGE>

SIGNED as a DEED by

/s/ C. Byrne
--------------------------------------
As attorney for TXU                   )
EUROPE GROUP PLC                      ) /s/ C. Byrne
in the presence of:                   )

Witness: /s/ N. Ferguson

Name: Nicole Ferguson

Occupation: Corporate Manager

Address: BARCLAYS PRIVATE BANK & TRUST LIMITED
         P.O. Box No. 82, 39-41 Broad Street,
         St. Heiler, Jersey JE4 8PU, Channel Islands

SIGNED as a DEED by

/s/ C. Byrne
--------------------------------------
As attorney for TXU                   )
EUROPE POWER LIMITED                  ) /s/ C. Byrne
in the presence of:                   )

Witness: /s/ N. Ferguson

Name: Nicole Ferguson

Occupation: Corporate Manager

Address: BARCLAYS PRIVATE BANK & TRUST LIMITED
         P.O. Box No. 82, 39-41 Broad Street,
         St. Heiler, Jersey JE4 8PU, Channel Islands

                                                                          Page 9

<PAGE>

SIGNED as a DEED by

/s/ C. Byrne
--------------------------------------
As attorney for EASTERN               )
ELECTRICITY plc                       ) /s/ C. Byrne
in the presence of:                   )

Witness: /s/ N. Ferguson

Name: Nicole Ferguson

Occupation: Corporate Manager

Address: BARCLAYS PRIVATE BANK & TRUST LIMITED
         P.O. Box No. 82, 39-41 Broad Street,
         St. Heiler, Jersey JE4 8PU, Channel Islands

SIGNED as a DEED by

/s/ A. Ioanniois
--------------------------------------
As attorney for BARCLAYS BANK PLC     )
as Agent in the presence of:          ) /s/ A. Ioanniois

Witness: /s/ N. Ferguson

Name: Nicole Ferguson

Occupation: Corporate Manager

Address: BARCLAYS PRIVATE BANK & TRUST LIMITED
         P.O. Box No. 82, 39-41 Broad Street,
         St. Heiler, Jersey JE4 8PU, Channel Islands

SIGNED as a DEED by

/s/ A. Ioanniois
--------------------------------------
As attorney for BARCLAYS BANK PLC     ) /s/ A. Ioanniois
as Bank in the presence of:           )

Witness: /s/ N. Ferguson

Name: Nicole Ferguson

Occupation: Corporate Manager

Address: BARCLAYS PRIVATE BANK & TRUST LIMITED
         P.O. Box No. 82, 39-41 Broad Street,
         St. Heiler, Jersey JE4 8PU, Channel Islands

                                                                         Page 10

<PAGE>

SIGNED as a DEED by

/s/ A. Ioanniois
----------------------------------------
As attorney for SOCIETE GENERALE        ) /s/ A. Ioanniois
in the presence of:                     )

Witness: /s/ N. Ferguson

Name: Nicole Ferguson

Occupation: Corporate Manager

Address: BARCLAYS PRIVATE BANK & TRUST LIMITED
         P.O. Box No. 82, 39-41 Broad Street,
         St. Heiler, Jersey JE4 8PU, Channel Islands

SIGNED as a DEED by

/s/ A. Ioanniois
----------------------------------------
As attorney for THE ROYAL BANK OF       ) /s/ A. Ioanniois
SCOTLAND PLC in the presence of:        )

Witness: /s/ N. Ferguson

Name: Nicole Ferguson

Occupation: Corporate Manager

Address: BARCLAYS PRIVATE BANK & TRUST LIMITED
         P.O. Box No. 82, 39-41 Broad Street,
         St. Heiler, Jersey JE4 8PU, Channel Islands

SIGNED as a DEED by

/s/ A. Ioanniois
----------------------------------------
As attorney for TORONTO-DOMINION BANK   ) /s/ A. Ioanniois
in the presence of:                     )

Witness: /s/ N. Ferguson

Name: Nicole Ferguson

Occupation: Corporate Manager

Address: BARCLAYS PRIVATE BANK & TRUST LIMITED
         P.O. Box No. 82, 39-41 Broad Street,
         St. Heiler, Jersey JE4 8PU, Channel Islands

                                                                         Page 11

<PAGE>

SIGNED as a DEED by

/s/ A. Ioanniois
----------------------------------------
As attorney for UBS AG                  ) /s/ A. Ioanniois
in the presence of:                     )

Witness: /s/ N. Ferguson

Name: Nicole Ferguson

Occupation: Corporate Manager

Address: BARCLAYS PRIVATE BANK & TRUST LIMITED
         P.O. Box No. 82, 39-41 Broad Street,
         St. Heiler, Jersey JE4 8PU, Channel Islands

SIGNED as a DEED by

/s/ A. Ioanniois
----------------------------------------
As attorney for WESTDEUTSCHE            ) /s/ A. Ioanniois
LANDESBANK GIROZENTRALE                 )
in the presence of:

Witness: /s/ N. Ferguson

Name: Nicole Ferguson

Occupation: Corporate Manager

Address: BARCLAYS PRIVATE BANK & TRUST LIMITED
         P.O. Box No. 82, 39-41 Broad Street,
         St. Heiler, Jersey JE4 8PU, Channel Islands

SIGNED as a DEED by

/s/ J. Cordova-Udompholkul
----------------------------------------
As attorney for BANK OF AMERICA         ) /s/ J. Cordova-Udompholkul
INTERNATIONAL LIMITED                   )
in the presence of:

Witness: /s/ N. Ferguson

Name: Nicole Ferguson

Occupation: Corporate Manager

Address: BARCLAYS PRIVATE BANK & TRUST LIMITED
         P.O. Box No. 82, 39-41 Broad Street,
         St. Heiler, Jersey JE4 8PU, Channel Islands

                                                                         Page 12

<PAGE>

<TABLE>
<S>                                                                     <C>
TXU Europe Group plc (formerly Eastern Group plc)                       39-41 Broad Street
TXU Europe Merchant Properties Limited                                  St Helier
(formerly Eastern Merchant Generation Limited)                          Jersey JE4 8PU
Eastern Group Finance Limited                                           Channel Islands
TXU Europe Power Limited (formerly Eastern Generation Limited)          Tel 01534 873741
Eastern Electricity plc                                                 Fax 01534 872737
</TABLE>

The Banks (as set out in the Supplemental Deed)

Barclays Bank PLC (as Agent)

                                                                        BARCLAYS

c/o Barclays Private Bank & Trust Limited
39/41 Broad Street
St Helier, Jersey
IE4 8PU

Our ref CH/RLS

Dear Sirs

TXU Europe Merchant Properties Limited
Rent Factoring Transaction dated 28 October 1996

We refer to the Supplemental Deed dated 19 January 2001 (the "Supplemental
Deed") between TXU Europe Group plc, TXU Europe Merchant Properties Limited, TXU
Europe Merchant Generation Limited, Eastern Group Finance Limited, TXU Europe
Power Limited, Eastern Electricity plc, the Banks (as set out in the
Supplemental Deed) and Barclays Bank PLC as Agent under the Guarantee and
Indemnity (the "Guarantee and Indemnity") dated 28 October 1996 and entered into
in respect of certain rent factoring arrangements concluded by, inter alia, TXU
Europe Merchant Properties Limited, pursuant to which, among other things,
certain changes were requested to the Guarantee and Indemnity in order to allow
the Tenant to prepay all outstanding Rents on 19 January 2001.

We confirm that (i) we have received the original Supplemental Deed executed on
behalf of the above named parties and (ii) the originals of the Supplemental
Deed and this letter (together with "Documents") will be held in Jersey by
Barclays Private Bank & Trust Limited on behalf of the parties to the Documents
on the terms, mutatis mutandis, of the Custody Deed (the "Custody Deed") dated
28 October 1996 (as amended) between TXU Europe Merchant Properties Limited,
Eastern Group Finance Limited, Barclays Bank PLC, The Royal Bank of Scotland
plc, Societe Generale, The Toronto-Dominion Bank, UBS AG, Westdeutsche
Landesbank Girozentrale, Bank of America International Limited and Barclays
Private Bank & Trust Limited as if TXU Europe Group plc, TXU Europe Power
Limited, Eastern Electricity Plc and TXU Europe Merchant Generation Limited were
party to the Custody Deed and as if the Documents were Custody Documents as
defined therein.

/s/ N. Ferguson

Yours faithfully
for and behalf of
Barclays Private Bank & Trust Limited

Authorised Official

<PAGE>

The Industrial Bank Of Japan, Limited
London Branch

Bracken House
One Friday Street, London EC4M 9JA
Tel: 020-7248 1111 Telex: 886939 Fax: 020-7248 1114

direct tel: +44-20-7815.2217                       direct fax: +44-20-7815.2222
e-mail: n.williams@ibj.co.uk

10 October 2001

Mr Gary Wiffin
Deputy Group Treasurer
TXU Europe
PO Box 40
Wherstead Park
Wherstead
Ipswich
Suffolk, IP9 2AQ

Mr Bill Currie
Manager, Energy & Project Finance
Corporate Banking Europe
The Bank of Nova Scotia
Scotia House
33 Finsbury Square
London, EC2A 1BB

Gentlemen

TXU Europe Merchant Generation/TXU Europe Merchant Properties
(pound)500 million Prepayment Facility dated I July 1996
(as amended by an Amendment and Restatement Agreement dated 8 August 1996
and the Deferred Premium Settlement Deed dated 28 October 1996)
---------------------------------------------------------------

Enclosed please find your originals of the Letter of Release of Charges
completed by the Parties on 27 September 2001 for your records.

Should you have any questions concerning the attached please let me know.

With kind regards

/s/ Nick Williams

Nick Williams
Senior Manger, European Agency Dept

<PAGE>

TXU Europe Group PIC
Wherstead Park
PO Box 40
Wherstead Ipsvwich
Suffolk IP9 2AQ

Web: http://www.txu-europe.com

               For the attention of:               27 September 2001
               --------------------

               Loans Administration
               The Industrial Bank of Japan Limited
               Bracken House
               One Friday Street
               London
               EC4M 9JA

               as Agent for itself and for the other Banks and Participants

               Dear Sirs,

               TXU Europe Merchant Generation Limited ("MGL") and TXU Europe
               Merchant Properties Limited ("MPL") (together the "Borrowers")
               under a (pound)500,000,000 Prepayment Facility Agreement dated
               1st July, 1996 as amended and restated by an amendment and
               restatement agreement dated 8th August, 1996 and as further
               amended by a Deferred Premium Settlement Deed between the
               Borrowers, Eastern Electricity plc, The Industrial Bank of Japan,
               Limited (for itself as Bank and Participant and as Agent and
               Arranger) and The Bank of Nova Scotia and Societe Generale in
               their respective capacities as Bank and Participant dated 28th
               October, 1996 and as further amended by a Letter of Agreement
               dated 29th March, 2001 between the Borrowers and The Industrial
               Bank of Japan, Limited (for itself as Bank and Participant and as
               Agent for the Banks and Participants) (the "Facility Agreement")

               1.   Introduction

               We refer to:

               (a)  the Facility Agreement;

               (b)  the Irrevocable Payment Direction Deed between National
                    Power plc, Eastern Electricity plc (formerly Eastern Group
                    plc), MPL and The Industrial Bank of Japan, Limited dated
                    27th June, 1996; and

               (c)  (i) Charge on Cash between MPL and Societe Generale dated
                    28th October, 1996, (ii) Charge on Cash between MPL and The
                    Bank of Nova Scotia dated 28th October, 1996, and (iii)
                    Charge on Cash between MPL and The Industrial Bank o(pound)
                    Japan, Limited dated 28th October, 1996, (each a "Charge on
                    Cash" and together the "Charges on Cash"),

               (together, the "Documents").

<PAGE>

                    Terms defined in the Documents shall, except as otherwise
                    expressly provided herein or the context otherwise requires,
                    have the same meaning in this letter.

                    2.  Application of Deposit Moneys and release of Charges on
                        Cash

                    We agree that:

                    (a)  notwithstanding anything contained in Clause 21.1
                         (Payment) of the Facility Agreement, each Bank (as Bank
                         and Participant) shall be unconditionally and
                         irrevocably permitted (and is unconditionally and
                         irrevocably authorised by MPL to) on 31st December,
                         2001 (the "Discharge Date") to apply all of the Deposit
                         Moneys (as defined in each Charge on Cash to which it
                         is a party) the subject of the Charge on Cash to which
                         it is a party so as to discharge all amounts due to
                         that Bank from the Borrowers under the Documents. For
                         the avoidance of doubt, the amount to be applied on the
                         Discharge Date shall be at least equal to the amount
                         the Agent would have received on the date of payment in
                         respect of the First Element of the Acceleration Sum if
                         the Acceleration Sum Payment Date were to occur on that
                         date, adjusted as described in Clause 9.1(b) of the
                         Facility Agreement, or as the case may be 9.2(b); and

                    (b)  subject to written confirmation by the Agent to the
                         Borrowers on or after the Discharge Date, following
                         application of the Deposit Moneys (as defined in each
                         Charge on Cash to which it is a party) in accordance
                         with paragraph (a) above, the Secured Liabilities (as
                         defined in the Charge on Cash to which it is a party)
                         shall have been discharged in full; and

                    (c)  upon the expiry of the respective Security Period (but
                         not otherwise), if requested by MPL each Bank shall, at
                         the expense of MPL, execute a deed of release (or any
                         other relevant release document reasonably requested by
                         MPL) in respect off the Charge on Cash to which it is a
                         party.

                    3.   Representations

                    Each of MGL and MPL represent and warrant to each Bank and
                    Participant that:

                    (i)  it has the corporate power to enter and perform, and
                         has taken all necessary action to authorise the entry
                         into, performance and delivery of this letter; and

                    (ii) it has taken all corporate action necessary to
                         authorise the execution by it of this letter and this
                         letter constitutes a legal, valid and binding
                         obligation on it, enforceable against it in accordance
                         with its terms.

                    4.   Costs and Expenses

<PAGE>

                    MPL shall forthwith on demand pay to the Agent for the
                    benefit of the Agent, the Banks and the Participants the
                    amount of all costs and expenses (including legal fees) and
                    any VAT thereon incurred in connection with the negotiation,
                    preparation, printing and execution of this letter.

                    5.   Finance Documents

                    This letter is a Finance Document.

                    6.   Continued Effectiveness of Finance Documents

                    The entry into and the performance of this letter by the
                    parties hereto shall not operate as a waiver of any of the
                    Agent's, Bank's, Participant's or The Industrial Bank of
                    Japan, Limited's rights under the Facility Agreement, IPDD
                    or the Charges on Cash, as the case may be, and all such
                    agreements shall remain in full force and effect except to
                    the extent expressly adjusted by this letter.

                    This letter may be executed in any number of counterparts,
                    and this has the same effect as if the signatures on the
                    counterparts were on a single copy of this letter.

                    Please confirm your agreement to the terms of this letter by
                    signing and returning to us the enclosed copy of this
                    letter.

                    A person who is not a party to this letter has no rights
                    under the Contracts (Rights of Third Parties) Act 1999 to
                    enforce any term of this letter. This letter is governed by
                    English law.

                    Yours faithfully,

                    /s/
                    ------------------------------------
                    for and on behalf of
                    TXU Europe Merchant Properties Limited

                    ------------------------------------
                    for and on behalf of
                    TXU Europe Merchant Generation Limited

<PAGE>

Acknowledgement
We agree to the above

Date:  27 September 2001

/s/ N. R. Williams
--------------------------------------------------
for and on behalf of
The Industrial Bank of Japan, Limited
as agent for itself and the
other Banks and Participants

We agree to the above.

Dated:  27 September 2001

/s/ E. B. Pinneli
--------------------------------------------------
for and on behalf of
Societe Generale

We agree to the above

Date:  27 September 2001

/s/
--------------------------------------------------
for and on behalf of
The Bank of Nova Scotia<PAGE>

                                                                   Exhibit 10(a)

                  TXU DEFERRED AND INCENTIVE COMPENSATION PLAN

                     (As restated effective August 17, 2001)

Section 1. Purpose
------------------

     1.1 Purpose. The TXU Deferred and Incentive Compensation Plan (the "Plan")
         -------
was established, effective July 1, 1987, was amended and restated effective May
12, 2000, and is hereby amended and restated effective August 17, 2001. The
purpose of the Plan is to focus the attention of Eligible Employees on the
long-term performance of TXU's consolidated operations by relating rewards to
the Company's long-range success, and to tie Eligible Employees' rewards to
stock performance. The Plan also is designed to retain and motivate employees
and to recognize the contributions of such employees to the Company. The Plan is
designed as an unfunded arrangement maintained "primarily for the purpose of
providing deferred compensation for a select group of management or highly
compensated employees" as determined under the provisions of the Employee
Retirement Income Security Act of 1974 (ERISA). ERISA Section 201(2).

Section 2. Definitions
----------------------

     2.1 Definitions. Whenever used hereinafter, the following terms shall have
         -----------
the meanings set forth below:

          (a)  "Applicable Employee Remuneration" means applicable employee
               remuneration as that term is defined in Section 162(m), or any
               successor provision, of the Internal Revenue Code.

          (b)  "Beneficiary" means the person or persons named by the
               Participant as the recipient(s) of any distribution remaining to
               be paid to the Participant under the Plan upon the Participant's
               death.

          (c)  "Board of Directors" means the Board of Directors of the Company.

          (d)  "Business Unit" means a subsidiary, division or operating unit of
               the Company designated by the Chief Executive of the Company
               which will focus on its own unique products, services and
               markets.

          (e)  "Change in Control" means a change in control of the Company of a
               nature that would be required to be reported in response to Item
               1(a) of the Securities and Exchange Commission Form 8-K, as in
               effect on the date hereof, pursuant to Section 13 or 15(d) of the
               Securities Exchange Act of 1934, as amended ("Exchange Act"), or
               would have been required to be so reported but for the fact that
               such event had been "previously reported" as that term is defined
               in Rule 12b-2 of Regulation 12B under the Exchange Act; provided
               that, without limitation, such a change in control shall be
               deemed to have occurred if: (i) any Person is or becomes the
               beneficial owner (as defined in Rule 13-d3 under the Exchange
               Act), directly or indirectly, of

<PAGE>

               securities of the Company representing 20% or more of the
               combined voting power of the Company's then outstanding
               securities ordinarily (apart from rights accruing under special
               circumstances) having the right to vote at elections of directors
               ("Voting Securities"); or (ii) individuals who constitute the
               Board of Directors on the date hereof (the "Incumbent Board")
               cease for any reason to constitute at least a majority thereof,
               provided that any person becoming a director subsequent to the
               date hereof whose election, or nomination for election by the
               Company's shareholders, was approved by a vote of at least
               three-quarters of the directors comprising the Incumbent Board
               (either by a specific vote or by approval of the proxy statement
               of the Company in which such person is named as a nominee for
               director, without objection to such nomination) shall be, for
               purposes of this clause (ii), considered as though such person
               were a member of the Incumbent Board; or (iii) a recapitalization
               of the Company occurs which results in either a decrease by 33%
               or more in the aggregate percentage ownership of Voting
               Securities held by Independent Shareholders (on a primary basis
               or on a fully diluted basis after giving effect to the exercise
               of stock options and warrants) or an increase in the aggregate
               percentage ownership of Voting Securities held by non-Independent
               Shareholders (on a primary basis or on a fully diluted basis
               after giving effect to the exercise of stock options and
               warrants) to greater than 50%; or (iv) all or substantially all
               of the assets of the Company are liquidated or transferred to an
               unrelated party; or (v) the Company is a party to a merger,
               consolidation, reorganization or other business combination
               transaction pursuant to which the Company is not the surviving
               ultimate parent entity; or (vi) the Company is a party to a
               merger, consolidation, reorganization or other business
               combination transaction which requires the approval of the
               shareholders of the Company and which results in an increase of
               20% or more in the number of Voting Securities outstanding. For
               purposes of this definition, the term "Person" shall mean and
               include any individual, corporation, partnership, group,
               association or other "person", as such term is used in Section
               14(d) of the Exchange Act, other than the Company, a subsidiary
               of the Company or any employee benefit plan(s) sponsored or
               maintained by the Company or any subsidiary thereof, and the term
               "Independent Shareholder" shall mean any shareholder of the
               Company except any employee(s) or director(s) of the Company or
               any employee benefit plan(s) sponsored or maintained by the
               Company or any subsidiary thereof.

          (f)  "Chief Executive" means the Chief Executive of the Company.

          (g)  "Committee" means the Organization and Compensation Committee of
               the Board of Directors.

          (h)  "Company" means TXU Corp., its successors and assigns.

                                      -2-

<PAGE>

          (i)  "Eligible Employee" means an individual who is elected as a
               corporate officer of a Participating Employer with a title of
               vice president or above.

          (j)  "Matching Award" means the Company matching award provided for in
               Section 5.1 hereof.

          (k)  "Maturity Period" means the period described in Section 5.3
               hereof.

          (l)  "Participant" means an Eligible Employee who elects to
               participate in the Plan and whose account(s) has not been
               completely distributed.

          (m)  "Participating Employer" means the Company and each of its
               subsidiaries, affiliates or Business Units which are approved by
               the Committee for participation in this Plan. The Participating
               Employers, as of the date of this restatement of the Plan, are
               listed on Exhibit "A" attached hereto. Participation in the Plan
               by additional Participating Employers will commence as of the
               date established by the Committee.

          (n)  "Performance Unit" means a measure of participation under the
               Plan having a value equal to the value of a share of common stock
               of the Company, as determined by the value of such stock in the
               Trust.

          (o)  "Plan Administrator" means the person(s) or entities appointed to
               assist the Committee in carrying out the operations of the Plan.

          (p)  "Plan Year" means, with respect to Plan Years beginning on or
               prior to July 1, 2001, the twelve-month period beginning July 1
               and ending June 30; provided that beginning April 1, 2002, Plan
               Year shall mean the twelve-month period beginning April 1 and
               ending March 31. A special transition rule shall apply for the
               Plan Years beginning July 1, 2001 and April 1, 2002, as described
               in Section 4.2 herein.

          (q)  "Retirement" means retirement from a Participating Employer upon
               attaining age 65, or as early as attaining age 55 with at least
               15 years of accredited service, under the TXU Retirement Plan, or
               a successor plan.

          (r)  "Salary" means the annual base salary rate in effect on the first
               day of: (i) June immediately preceding the applicable Plan Year
               for Plan Years beginning on or before July 1, 2001, and (ii)
               March for Plan Years beginning on or after April 1, 2002, in any
               case without reduction for any Salary deferred in the prior Plan
               Year.

          (s)  "Stock" means common stock of the Company.

                                      -3-

<PAGE>

          (t)  "Trust" means the irrevocable grantor trust established by the
               Company to purchase, hold, and sell shares of Stock so as to
               establish the number and value of Performance Units allocable to
               Participants' Accounts and from which benefits under the Plan
               will be paid.

Section 3. Deferral Participation and Percentage
------------------------------------------------

     3.1 Participation. All Eligible Employees may elect to defer a percentage
         -------------
of Salary (in 1 percent increments) not to exceed the maximum percentage
determined by the Committee for a Plan Year.

     3.2 Percentage. The Committee will determine, in its sole discretion, the
         ----------
maximum percentage of Salary, if any, which may be deferred by a Participant in
any Plan Year. Such percentage may not exceed 15 percent of Salary.

Section 4. Election to Defer
----------------------------

     4.1 Salary Deferral Election. An Eligible Employee may elect irrevocably,
         ------------------------
by written notice to the Plan Administrator in the manner prescribed by the Plan
Administrator, to defer a percentage of Salary during such Plan Year.

     4.2 Special Transition Rule for Plan Years Beginning July 1, 2001 and April
         -----------------------------------------------------------------------
1, 2002. The following special transition rule shall apply for the Plan Years
-------
beginning July 1, 2001 and April 1, 2002. The Plan Year beginning July 1, 2001
shall continue for the full twelve-month period ending June 30, 2002, and
deferral elections for such Plan Year shall continue in effect through its
expiration on June 30, 2002. For the period beginning April 1, 2002 through June
30, 2002, the Plan Year beginning July 1, 2001 shall run concurrently with the
Plan Year beginning April 1, 2002, and, during such period, Eligible Employees
may elect to participate concurrently under both the Plan Year beginning July 1,
2001 and the Plan Year beginning April 1, 2002. Alternatively, Eligible
Employees may choose to have their deferral elections for the Plan Year
beginning April 1, 2002, begin on July 1, 2002, and end on March 31, 2003. The
elections with respect to such transition rule shall be made at the time
elections are made with respect to the Plan Year beginning April 1, 2002.

     4.3 Salary Reductions. Salary deferred under the Plan will be ratably
         -----------------
deducted in each pay period in the Plan Year.

     4.4 Deferral Under TXU Salary Deferral Program. As provided for under the
         ------------------------------------------
TXU Salary Deferral Program ("SDP"), an Eligible Employee may elect irrevocably,
by written notice to the Plan Administrator in the manner prescribed by, and
subject to approval of, the Plan Administrator, to defer amounts which would
otherwise mature and be distributed under this Plan under and subject to the
provisions of the SDP; provided that any such election to defer amounts under
the SDP is made at least twelve months prior to the expiration of the Maturity
Period of the amounts to be so deferred.

                                      -4-

<PAGE>

Section 5. Company Matching Awards and Incentive Awards
-------------------------------------------------------

     5.1 Matching Award. A Matching Award shall be credited to each
         --------------
Participant's account by the Company in an amount equal to 150 percent of the
amount deferred by the Participant. Such Matching Award shall be deemed to occur
on the first day of the Plan Year.

     5.2 Incentive Award. Under the terms of the Annual Incentive Plan ("AIP"),
         ---------------
for Plan Years beginning on or before July 1, 2001, an Eligible Employee may
have received an Incentive Award ("Incentive Award") which was treated as an
Incentive Award under this Plan. The effective date of contribution for any such
Incentive Award was the first day of the Plan Year.

     5.3 Maturity Periods. Salary deferrals and Matching Awards, subject to the
         ----------------
Extended Maturity Period Provision below, shall have a Maturity Period of five
years. Incentive Awards, subject to the Extended Maturity Period and Transition
Provisions below, shall have a Maturity Period of three years. The Maturity
Period shall begin on the first day of the Plan Year in which the Salary
deferral, Matching Award, or Incentive Award is made. Notwithstanding the
foregoing, any Maturity Period shall end on the date of death, total and
permanent disability, or termination of employment for reasons other than
Retirement. Anything contained herein to the contrary notwithstanding, deferred
amounts and Matching Awards as of July 1, 1987, shall mature on June 30, 1990.
Anything contained herein to the contrary notwithstanding, the Maturity Period
for the deferred amounts and Matching Awards for the Plan Year July 1, 1989,
through June 30, 1990, and the Plan Year July 1, 1991, through June 30, 1992,
shall end on November 30, 1992.

     Extended Maturity Period Provision. To the extent that the amounts
     ----------------------------------
     otherwise maturing under the Plan combined with the Eligible Employee's
     other remuneration exceeds the Applicable Employee Remuneration for such
     year, the Maturity Period for such excess amount shall end on the Eligible
     Employee's date of Retirement or such earlier date as of which such
     amounts, or any part thereof, combined with other remuneration does not
     exceed the Applicable Employee Remuneration for such year.

Section 6. Participant Accounts
-------------------------------

     6.1 Separate Accounts. The Plan Administrator shall establish and maintain
         -----------------
an individual account for Salary deferrals elected by each Participant and the
Matching Awards for each Plan Year. The account shall be credited as of the
first day of the Plan Year with the amount of Salary to be deferred during the
Plan Year and the related Matching Award. An Incentive Award, if any, shall be
credited to a separate account for the Participant as of the first day of the
Plan Year.

     6.2 Performance Units. Any and all amounts credited to a Participant's
         -----------------
account shall be converted into Performance Units as of the applicable date.
After notification of the number of shares acquired by the Trust with the
aggregate credits to Participants, as provided in Subsection 7.2, the Plan
Administrator will allocate an equal number of Performance Units, including
fractional units, to individual accounts based on the percentage relationship of
each Participant's credits to the total of such credits for all Participants.

                                      -5-

<PAGE>

     6.3 Dividend Equivalent Credits. Additional Performance Units shall be
         ---------------------------
credited to a Participant's account as Dividend Equivalent Credits. Such amount
shall be determined by multiplying the Performance Units recorded in a
Participant's account by the amount of any regular or special cash dividend
declared on each share of the Stock and dividing the product by the amount paid
by the Trust for a share of Stock with the dividend amounts.

     6.4 Date of Credit. Dividend Equivalent Credits shall be credited to a
         --------------
Participant's account as of the same date as the cash dividend on the Stock is
paid to shareholders. No such credit shall be made with respect to any dividend
paid after a Participant's Termination Date or after any date of termination of
the Plan, even though the record date is prior thereto.

     6.5 Unsecured Interest. All Performance Units credited to the account of
         ------------------
each Participant shall be for record purposes only. No Participant or
Beneficiary shall have any security interest whatsoever in any assets of the
Company. To the extent that any person acquires a right to receive payments
under the Plan, such right shall not be secured or represented by any issued
Stock or common stock to be issued.

Section 7. Investment and Funding
--------------------------------

     7.1 Grantor Trust. The benefits to be derived by Participants in the Plan
         -------------
will be funded through the Trust; provided, however, any Stock, cash, or other
property held in the Trust that was contributed by the Company shall at all
times be subject to the claims of general creditors of the Company.

     7.2 Funding of Trust. Upon determination of the total credits to
         ----------------
Participants' accounts for a Plan Year, the Company shall promptly provide the
Trust with resources in the aggregate of such amounts. The Trustee will, within
ten (10) business days, invest such aggregate amounts in shares of Stock and
promptly notify the Plan Administrator of the number of shares so acquired. The
Trustee will use any cash dividends received on Stock held in the Trust to buy
additional shares of the Stock and promptly notify the Plan Administrator of the
number of shares so acquired.

     7.3 Distributions from Trust. The Trustee, upon notification from the Plan
         ------------------------
Administrator, will make the distributions of matured benefits to Participants
or their Beneficiaries, or the deferral under the SDP of otherwise maturing
amounts, as provided in the Plan. If Trust assets are insufficient to pay the
amount of a matured benefit, the Company will pay such deficiency directly to
the Participant or Beneficiary. Any assets held in the Trust which the Trustee
determines to be in excess of those required to pay the benefits when due to
Participants may be returned to the Company.

     7.4 Voting of Stock Held in Trust. Stock held in the Trust shall be voted
         -----------------------------
by the Trustee in its discretion.

Section 8. Distribution of Account Values
-----------------------------------------

                                      -6-

<PAGE>

     8.1 Value of a Participant's Account. The value of a Participant's account
         --------------------------------
will equal the net proceeds received by the Trust from the sale of shares equal
in number to the number of Performance Units representing the Participant's
deferred amount and Matching Award, or Incentive Award applicable to the
designated Maturity Period, together with all Dividend Equivalent Credits earned
thereon. In no event shall the Participant's account be deemed to have a cash
value which is less than the sum of the Participant's deferred amount together
with a 6 percent per annum (compounded annually) interest equivalent thereon.

     8.2 Form and Timing of Distribution. The value of a Participant's account
         -------------------------------
at maturity shall be determined as provided in Subsection 8.1. The value of the
Participant's account at maturity shall be paid in cash. Payment shall be made
as soon as practicable, but in no event later than thirty (30) days following
maturity of the Participant's account. No interest shall accrue or be paid from
date of maturity to date of payment on such amounts. Notwithstanding any other
provision of this Plan, if the Participant had elected to defer under the SDP
some or all of his otherwise maturing Account, as provided for in Section 4.4
hereof, the Trustee will transfer such amounts to the trustee of the SDP to be
held under and subject to the SDP.

Section 9. Termination of Employment
------------------------------------

     9.1 Termination of Employment Due to Death or Disability. In the event a
         ----------------------------------------------------
Participant's employment is terminated by reason of death or permanent and total
disability, all amounts credited to his account, except as provided in
Subsection 9.4, shall mature upon such termination. The Participant or his
Beneficiary shall then receive, as soon as practicable after the date of death
or disability, a distribution of the Participant's account based on the value of
his account as provided in Subsection 8.1.

     9.2 Termination of Employment Due to Retirement. In the event a
         -------------------------------------------
Participant's employment is terminated by reason of Retirement, the Participant
shall receive a distribution of his account (or, if and to the extent
applicable, the Participant's Account shall be deferred under the SDP pursuant
to a deferral election made pursuant to Section 4.4 hereof), except as provided
in Subsection 9.4, at the end of the applicable Maturity Period.

     9.3 Termination of Employment for Reasons Other Than Death, Disability, or
         ----------------------------------------------------------------------
Retirement. In the event a Participant's employment is terminated for any reason
----------
other than death, permanent and total disability, or Retirement, all rights
whatsoever to any Performance Units for Maturity Periods not yet completed and
any Dividend Equivalent Credits thereon shall be forfeited; provided, however,
that the Participant shall be fully vested in any amounts deferred by him,
together with a 6 percent per annum (compounded annually) interest equivalent
thereon, and entitled to receive a distribution in such amount as soon as
practicable, but in no event later than thirty (30) days following termination
of employment. No interest shall be paid on such amounts for any period after
the date of termination. The Committee shall be the sole judge with respect to
such reasons for termination.

     9.4 Termination of Employment Prior to the End of the Plan Year. In the
         -----------------------------------------------------------
event a Participant's employment is terminated prior to the end of the Plan Year
due to the Participant's death, permanent and total disability or Retirement,
the deferred amount, Matching Award, and Dividend

                                      -7-

<PAGE>

Equivalent Credits relating to such Plan Year will be recomputed as of the date
of termination of employment. The value of the recomputed account shall be an
amount equal to the product of the value of the Performance Units at the date of
termination credited to the Participant's account multiplied by a fraction, the
numerator of which is the actual Salary reduction for the portion of the Plan
Year preceding termination, and the denominator of which is the total Salary
reduction elected for the entire Plan Year. This Subsection will not apply if
such termination is by reason of Retirement and the Participant elected to
accelerate the balance of Salary reductions in such an event on the notice
required by Subsection 4.1.

Section 10. Nontransferability
------------------------------

     10.1 Nontransferability. In no event shall the Company make any
          ------------------
distribution or payment under this Plan to any assignee or creditor of a
Participant or a Beneficiary. Prior to the time of a distribution or payment
hereunder, a Participant or a Beneficiary shall have no rights by way of
anticipation or otherwise to assign or otherwise dispose of any interest under
this Plan.

Section 11. Designation of Beneficiaries
----------------------------------------

     11.1 Specified Beneficiary. A Participant shall designate a Beneficiary or
          ---------------------
Beneficiaries who, upon the Participant's death, are to receive the amounts that
otherwise would have been paid to the Participant. All Beneficiary designations
shall be in writing and signed by the Participant, and shall be effective only
if and when delivered to the Plan Administrator during the lifetime of the
Participant. A Participant may, from time to time during his lifetime, change
his Beneficiary or Beneficiaries by a signed, written instrument delivered to
the Plan Administrator. The payment of amounts shall be in accordance with the
last unrevoked written designation of the Beneficiary that has been signed and
so delivered.

     11.2 Estate as Beneficiary. If a Participant designates a Beneficiary
          ---------------------
without providing in the designation that the Beneficiary must be living at the
time of each distribution, the designation shall vest in the Beneficiary all of
the distributions whether payable before or after the Beneficiary's death, and
any distributions remaining upon the Beneficiary's death shall be made to the
Beneficiary's estate. In the event a Participant shall not designate a
Beneficiary or Beneficiaries, or if for any reason such designation shall be
ineffective, in whole or in part, as determined solely in the discretion of the
Plan Administrator, the distribution that otherwise would have been paid to such
Participant shall be paid to the Participant's estate and in such event the term
"Beneficiary" shall include the Participant's estate.

Section 12. Rights of Participants
----------------------------------

     12.1 Employment. All Participants understand that they are employees at
          ----------
will. Therefore, nothing in the Plan shall interfere with or limit in any way
the right of the Company to terminate, for any reason, any Participant's
employment at any time, nor confer upon a Participant any right to continue in
the employ of the Company.

Section 13. Administration
--------------------------

                                      -8-

<PAGE>

     13.1 Administration. The Committee shall be responsible for the
          --------------
administration of the Plan. The Committee is authorized to interpret the Plan,
to prescribe, amend, and rescind rules and regulations relating to the Plan,
provide for conditions and assurances deemed necessary or advisable to protect
the interests of the Company, and to make all other determinations necessary or
advisable for the administration of the Plan. The determination of the
Committee, interpretation or other action made or taken pursuant to the
provisions of the Plan, shall be final, binding and conclusive for all purposes
and upon all persons whomsoever. The Committee shall appoint a Plan
Administrator to assist in carrying out the operations of the Plan.

     13.2 Annual Reports. The Plan Administrator shall render annually a written
          --------------
report to each Participant, which shall set forth, at a minimum, the
Participant's Account balances as of the end of the most recent Plan Year.

     13.3 Costs. Participants shall bear costs equal to the costs incurred by
          -----
the Trust related to the purchase and sale of stock by the Trust. The Company
shall pay all other costs of the Plan and the Trust.

Section 14. Amendment or Termination of the Plan
------------------------------------------------

     14.1 Amendment or Termination of the Plan. The Board of Directors may
          ------------------------------------
amend, terminate, or suspend the Plan at any time. Any such amendment,
termination, or suspension of the Plan shall be effective on such date as the
Board of Directors may determine. An amendment or modification of the Plan may
affect Participants at the time thereof as well as future Participants, but no
amendment or modification of the Plan for any reason may diminish any
Participant's account as of the effective date thereof. Upon Plan termination,
all amounts credited to a Participant's account shall be deemed to have matured,
except that Subsection 9.4 shall apply as if the Plan termination date were the
termination of employment date.

Section 15. Corporate Changes
-----------------------------

     15.1 Dissolution or Liquidation. Notwithstanding any provision herein to
          --------------------------
the contrary, upon the dissolution or liquidation of the Company, the
Performance Units credited to a Participant's account shall be converted to a
cash equivalent as of the day preceding the date of dissolution or liquidation,
using the method set forth in Subsection 8.1. The Company shall cause such
amount to be paid in cash in a lump sum to the Participant, or his Beneficiary,
as soon as practicable, but in no event later than thirty (30) days, following
the date of dissolution or liquidation.

     15.2 Change in Control. Notwithstanding anything in this Plan to the
          -----------------
contrary, in the event of a Change in Control: (a) the forfeiture provisions set
forth in Section 9.3 and the provisions set forth in Section 9.4 relating to the
recomputation of a Participant's Accounts upon a termination of employment or
termination of the Plan prior to the end of a Plan Year, shall no longer apply
such that, upon distribution of a Participant's Account, such Participant shall
be entitled to the full value of all Performance Units being distributed in
connection with such distribution without any forfeiture or recomputation of any
kind; (b) all amounts that would mature within twelve (12) months of such Change
in Control shall be deemed to have matured and be paid in full promptly, and in
any event

                                      -9-

<PAGE>

within thirty (30) days, following such Change in Control; and (c) with respect
to all amounts that would mature more than twelve (12) months following such
Change in Control, Participants shall be entitled to elect, as of the date of
such Change in Control, to have such amounts mature on the first anniversary of
such Change in Control or as of the date they would otherwise mature under the
terms of the Plan.

Section 16. Requirements of Law
-------------------------------

     16.1 Governing Law. The Plan, and all agreements hereunder, shall be
          -------------
construed in accordance with and governed by the laws of the State of Texas.

Section 17. Withholding Taxes
-----------------------------

     17.1 Withholding Taxes. The Company shall have the right to deduct from all
          -----------------
cash payments under the Plan or from a Participant's compensation an amount
necessary to satisfy any Federal, state, or local withholding tax requirements.

     EXECUTED effective as of the 17th day of August, 2001.

                                    TXU CORP.

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

                                      -10-

<PAGE>

                                   EXHIBIT "A"

                             PARTICIPATING EMPLOYERS
                              AS OF AUGUST 17, 2001

                                    TXU Corp.
                          TXU Energy Industries Company
                              TXU Electric Company
                                 TXU Gas Company
                                TXU Fuel Company
                               TXU Mining Company
                          TXU Business Services Company
                                TXU SESCO Company
                             TXU Properties Company
                              Basic Resources Inc.
                              Chaco Energy Company

                             PARTICIPATING EMPLOYERS
                               AS OF APRIL 1, 2002

                  TXU Corp. and each of its direct and indirect
                           United States subsidiaries
                          other than TXU Communications
                          Ventures Company ("Ventures")
                        and the Subsidiaries of Ventures

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00034-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00034-of-00352.parquet"}]]