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Exhibit 10(r)
DEFERRED COMPENSATION PLAN
for
DIRECTORS OF SUBSIDIARIES
(Effective August 17, 2001)
Section 1. Purpose
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1.1 Purpose. The TXU Deferred Compensation Plan for Directors
of
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Subsidiaries (the "Plan") was established,
effective April 1, 1998, was renamed
and restated effective May 12, 2000 in
connection with the corporate name change
of the Company, was amended and restated
effective August 18, 2000, and is
hereby further amended and restated
effective August 17, 2001. The primary
purpose of the Plan is to provide deferred
compensation to non-employee members
of the boards of directors and/or advisory
boards of directors of participating
subsidiaries who receive an annual
retainer, and to allow such persons to
purchase Performance Units with such
deferrals. The Plan is designed as an
unfunded arrangement under the provisions
of the Employee Retirement Income
Security Act of 1974, as amended, and of
the Internal Revenue Code of 1986, as
amended.
Section 2. Definitions
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2.1
Definitions. Whenever
used hereinafter, the following terms
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shall have the meanings set forth
below:
(a) "Advisory
Director" means a member of the advisory board of
directors of a Participating Subsidiary who is not a current
or former employee of the Company or any of its subsidiaries.
(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) "Change in
Control" means a
change in control of the Company
of a nature that would be required to be reported in response
to Item 1(a) of the Securities and Exchange Commission
Form 8-K, as in effect on the date hereof, pursuant to
Section 13 or 15(d) of the Securities Exchange Act of 1934,
as amended ("Exchange
Act"), or would have been required to
be so reported but for the fact that such event had been
"previously reported" as that term is defined in Rule 12b-2
of Regulation 12B under the Exchange Act; provided that,
without limitation, such a change in control shall be deemed
to have occurred if: (i) any Person is or becomes the
beneficial owner (as defined in Rule 13-d3 under the
Exchange Act), directly or indirectly, of securities of the
Company representing 20% or more of the combined voting power
of the Company's then outstanding securities ordinarily (apart
from rights accruing under special circumstances) having the
right to vote at elections of directors ("Voting
Securities"); or (ii) individuals who constitute the
Board of Directors on the date hereof (the "Incumbent Board")
cease for any reason to constitute at least a majority
thereof, provided that any person becoming a director
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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.
(d)
"Committee" means the Organization and Compensation Committee
of the board of directors of the Company.
(e) "Company"
means TXU Corp., its successors and assigns.
(f)
"Compensation" means, with respect to each Participant, such
Participant's annual retainer, exclusive of any attendance fee
or other compensation paid such Participant.
(g) "Dividend
Equivalent Credits" means additional Performance
Units which shall be credited to Participants' Accounts
pursuant to the provisions of Section 5.3
(h) "Outside
Director" means a member of the board of directors of
a Participating Subsidiary who is not a current or former
officer or employee of the Company or any of its subsidiaries.
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(i)
"Participant" means an Outside Director or an Advisory
Director of a Participating Subsidiary who has been designated
by the Committee as eligible to participate in this Plan, who
elects to participate in the Plan, and whose account(s) has
not been completely distributed.
(j)
"Participating Subsidiary" means a subsidiary of the Company
which elects to participate in this Plan. Exhibit "A" attached
hereto lists the initial Participating Subsidiaries. Exhibit
"A" may be amended from time to time without further notice
from the Company to accurately reflect the Participating
Subsidiaries.
(k)
"Performance Unit" means a measure of participation under the
Plan having a value equal to the value of a share of Stock, as
determined by the value of such Stock in the Trust.
(l)
"Plan
Administrator" means the person(s) appointed to assist
the Committee in carrying out the day-to-day operations of the
Plan.
(m) "Plan
Year" means the twelve-month period beginning April 1
and ending March 31.
(n) "Stock"
means common stock of the Company.
(o) "Trust"
means the irrevocable grantor trust established by the
Company, as agent for the Participating Subsidiaries, 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. Participation and Deferral
Election
3.1 Participation. Each of the Company's subsidiaries may elect
to
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participate in the Plan by action of its
board of directors. Each eligible
Outside Director and Advisory Director may
elect to become a Participant by
deferring a percentage of Compensation (in
25 percent increments up to 100
percent) pursuant to an irrevocable written
election which shall specify the
percentage of Compensation to be deferred
for the applicable Plan Year and the
Maturity Period (as defined below) for such
deferral. Such written election
shall be completed and filed with the Plan
Administrator prior to the beginning
of the applicable Plan Year. A Participant
may, subject to, and in accordance
with, procedures and guidelines approved
from time to time by the Plan
Administrator, modify the Maturity Period
relating to any such deferral provided
that: (i) any such modification must be
made at least twelve (12) months prior
to: (a) the date that the deferrals would
otherwise mature, in the case of a
requested extension of the Maturity Period,
or (b) the desired maturity date, in
the case of a requested reduction of the
Maturity Period; and (ii) the Maturity
Period must continue to be within the
limits provided for in Section 4.1 hereof.
3.2 Compensation
Reductions.
Compensation deferred
under the Plan
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will be ratably deducted in each quarter of
the Plan Year.
Section 4. Maturity Periods.
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4.1 Maturity Periods. Each Compensation Deferral shall have a
maturity
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period ("Maturity Period") of not fewer
than three nor more than ten years as
indicated in the Participant's written
election. The Maturity Period shall be
