in each case, and in the aggregate, that such activities do not conflict or interfere with the performance of Executive’s duties hereunder or conflict with Section 9.

3.                                        Base Salary .  During the Employment Term, the Company shall pay Executive a base salary at the annual rate of $270,000, payable in regular installments in accordance with the Company’s usual payment practices.  Commencing in 2006, and annually thereafter, the Board (or its Compensation Committee, as appropriate) shall review Executive’s base salary in light of the performance of Executive and the Company, and may, in its sole discretion, increase (but not decrease) such base salary by an amount it determines to be appropriate.  Executive’s annual base salary, as in effect from time to time, is hereinafter referred to as the “Base Salary.”

4.                                        Annual Bonus .  During the Employment Term, Executive shall be eligible to earn an annual bonus award in respect of each fiscal year of the Company (or, for each of the first and last years of the Employment Term, a pro rata bonus award based on the ratio that the number of days of such fiscal year during the Employment Term bears to 365) (each an “Annual Bonus”), in a target amount equal to 50% of Executive’s Base Salary (the “Target Bonus”), with a maximum bonus opportunity of 100% (increasing in a linear progression above 50% and up to 100% of Executive’s Base Salary), with no bonus payable unless the Company achieves the threshold level of performance established by the Board (for which the threshold bonus will be 16.5% of Executive’s Base Salary), payable pursuant to the terms of the applicable incentive compensation plan to be established by the Board as soon as practicable after the Effective Date (the “Incentive Plan”).  Each Annual Bonus shall be payable promptly following a determination by the Board (or a designated committee thereof) that the applicable performance criteria have been satisfied, but in no event later than 30 days after the audited consolidated financial statements for the Company are prepared for each such fiscal year.

5.                                        Equity Participation .  Executive will be provided a confidential information memorandum (the “PPM”) regarding the Equity Program and the Company will offer Executive the opportunity to invest $100,000 in Units of the Company on the terms in the PPM and Equity Documents (defined below) at a price of $5.00 per Unit.  Subject to review of the PPM, Executive agrees to invest in the Company and pay for such Units of the Company by March 15, 2005 (the “Purchase Date”).  Executive’s equity participation in the Company shall be subject to her review of the Confidential Information Memorandum (the “PPM”), and shall be documented pursuant to the Texas Genco LLC 2004 Unit Plan (the “Unit Plan”), Management Unitholder’s Agreement, Unit Option Agreements, Amended and Restated Limited Liability Company Agreement of the Company, dated as of December 15, 2004 (the “LLC Agreement”), as amended from time to time, each as executed by Executive, the Company, and its members, as applicable, in such forms as are agreed to by the parties (collectively, the “Equity Documents”).  The Company and Executive each acknowledges that the terms and conditions of the aforementioned Equity Documents govern Executive’s acquisition, holding, sale or other disposition of Executive’s equity in the Company, and all of Executive’s and the Company’s rights with respect thereto.

6.                                        Employee Benefits .

a.                                        During the Employment Term, Executive shall be entitled to (1) participation in the Company’s employee 401(k), health and welfare benefit plans and all fringe

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benefits and executive perquisites as in effect from time to time, (2) 20 paid vacation days per year and (3) sick leave, paid holidays and other paid time off in accordance with the Company’s policies as in effect from time to time (collectively “Employee Benefits”), on a basis no less favorable than those benefits generally made available to other senior executives of the  Company or to the Company’s employees generally.

7.                                        Business Expenses .  During the Employment Term, reasonable business expenses incurred by Executive in the performance of Executive’s duties hereunder shall be reimbursed by the Company in accordance with Company policies.

8.                                        Termination .  The Employment Term and Executive’s employment hereunder may be terminated by either party at any time and for any reason; provided that Executive will be required to give the Company at least 60 days advance written notice of any resignation of Executive’s employment.  Notwithstanding any other provision of this Agreement, the provisions of this Section 8 shall exclusively govern Executive’s rights upon termination of employment with the Company and its affiliates; provided, however, that Executive’s rights with respect to her equity participation shall be governed solely by the Equity Documents.

a.                                        By the Company For Cause or By Executive Resignation Without Good Reason .

(i)  The Employment Term and Executive’s employment hereunder may be terminated by the Company for Cause (as defined below) and shall terminate automatically upon Executive’s resignation without Good Reason (as defined in Section 8(c)); provided that Executive shall be required to give the Company at least 60 days advance written notice of a resignation without Good Reason.

(ii)  For purposes of this Agreement, “Cause” shall mean (A) Executive’s willful and continued failure substantially to perform Executive’s duties hereunder (other than as a result of total or partial incapacity actually suffered by Executive as a result of any illness or other disability) for a period of 15 days following written notice by the Company to Executive of such failure (where such notice specifically identifies the manner in which the Company believes Executive has not substantially performed her duties), (B) Executive’s conviction of, or plea of nolo contendere to, a crime constituting (x) a felony under the laws of the United States or any state thereof or (y) a misdemeanor involving moral turpitude, (C) Executive’s willful malfeasance or willful misconduct in connection with Executive’s duties hereunder or any willful act or omission which is materially injurious to the financial condition or business reputation of the Company or any of its subsidiaries or affiliates, (D) Executive’s willful and material breach of the provisions of Sections 9 or 10 of this Agreement; provided, however, that Executive shall not be terminated for Cause under any of clauses (A), (C) or (D) above unless there shall have been delivered to Executive a copy of a resolution duly adopted by the Board, at a meeting of such Board (after reasonable notice to Executive and an opportunity for Executive, together with her counsel, to be heard at such meeting), finding that in the good faith opinion of the Board, Executive had engaged in conduct of the type described in any of clauses (A), (C) or (D) above and specifying the particulars thereof.

(iii)  If Executive’s employment is terminated by the Company for Cause, or if Executive resigns without Good Reason, Executive shall be entitled to receive:

(A)                               the Base Salary through the date of termination;

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(B)                                 any Annual Bonus earned but unpaid as of the date of termination for any previously completed fiscal year;

(C)                                 reimbursement for any unreimbursed business expenses properly incurred by Executive in accordance with Company policy prior to the date of Executive’s termination; and

(D)                                such Employee Benefits, if any, as to which Executive may be entitled under the employee benefit plans of the Company for Executive and her family (the amounts described in clauses (A) through (D) hereof being referred to as the “Accrued Rights”).

Following such termination of Executive’s employment by the Company for Cause or resignation by Executive without Good Reason, except as set forth in this Section 8(a)(iii), and Sections 13 and 14 of this Agreement, Executive shall have no further rights to any compensation or any other benefits under this Agreement; provided, however, that Executive’s rights with respect to her equity participation shall be governed solely by the Equity Documents.

b.                                       Disability or Death .

(i)  The Employment Term and Executive’s employment hereunder shall terminate upon Executive’s death and may be terminated by the Company if Executive becomes physically or mentally incapacitated and is therefore unable for a period of six (6) consecutive months or for an aggregate of nine (9) months in any twenty-four (24) consecutive month period to perform Executive’s duties (such incapacity is hereinafter referred to as “Disability”).  Any question as to the existence of the Disability of Executive as to which Executive and the Company cannot agree shall be determined in writing by a qualified independent physician mutually acceptable to Executive and the Company.  If Executive and the Company cannot agree as to a qualified independent physician, each shall appoint such a physician and those two physicians shall select a third who shall make such determination in writing.  The determination of Disability made in writing to the Company and Executive shall be final and conclusive for all purposes of this Agreement.

(ii)  Upon termination of Executive’s employment hereunder for either Disability or death, Executive or Executive’s estate (as the case may be) shall be entitled to receive:

(A)                               the Accrued Rights; and

(B)                                 a lump sum payment of the pro rata portion (based upon the number of days in the applicable fiscal year during which Executive was employed with the Company through the date of such termination, relative to the number of days in the applicable fiscal year) of any Annual Bonus, if any, that Executive would have been entitled to receive pursuant to the Incentive Plan in respect of the Fiscal Year in which such termination occurs, payable when such Annual Bonus would have otherwise been payable had Executive’s employment not terminated,

Following Executive’s termination of employment due to death or Disability, except as set forth in this Section 8(b)(ii), and Sections 13 and 14 of this Agreement, Executive shall have no further rights to any compensation or any other benefits under this Agreement; provided, however, that Executive’s rights with respect to her equity participation shall be governed solely by the Equity Documents.

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c.                                        By the Company Without Cause or Resignation by Executive for Good Reason .

(i)  The Employment Term and Executive’s employment hereunder may be terminated by the Company without Cause or by Executive’s resignation for Good Reason.

(ii)  For purposes of this Agreement, “Good Reason” shall mean (A) any material breach by the Company of this Agreement, (B) any sustained diminution, other than in an inconsequential or immaterial aspect, in Executive’s authority, title, duties or responsibilities from those described in Section 2 hereof, (C) the assignment to Executive of a material amount of different or additional duties that are significantly inconsistent with Executive’s position, (D) a merger or other business combination or a material divestiture of all or substantially all of its assets, whereby the Company is no longer primarily in the energy related business, or (E) the relocation of Executive, the Company’s principal executive offices or all or substantially all of the Company’s executive level employees without Executive’s consent, to any location outside of the Houston, Texas metropolitan region.  Executive shall have the right to terminate her employment for “Good Reason” by giving the Company notice in writing of the reason for such termination and the Employment Term shall terminate on the date of Executive’s termination of employment; provided that either of the events described in this Section 8(c)(ii) shall constitute Good Reason only if the Company fails to cure such event within 30 days after receipt from Executive of written notice of the event which constitutes Good Reason; provided , further , that “Good Reason” shall cease to exist for an event on the 60 ^th day following the later of its occurrence or Executive’s knowledge thereof, unless Executive has given the Company written notice thereof prior to such date.  Executive’s failure to resign in connection with any event, or occurrence, which constitutes Good Reason shall not be deemed a waiver of any other event or occurrence thereafter which constitutes Good Reason.

(iii)  If Executive’s employment is terminated by the Company without Cause (other than by reason of death or Disability) or if Executive resigns for Good Reason, Executive shall be entitled to receive:

(A)                               the Accrued Rights;

(B)                                 subject to Executive’s continued compliance with the provisions of Sections 9 and 10, a payment equal to the sum of (x) the Base Salary at the rate in effect immediately prior to the Date of Termination (without regard to any decrease which constitutes a breach of this Agreement as described in clause (A) of Section 8(c)(ii) which is the basis for Executive’s resignation for Good Reason) and (y) the Target Bonus for the year in which such termination occurs, payable in equal monthly installments over the twelve (12) month period commencing on the date of such termination; provided , however , that the aggregate amount described in this subsection (B) shall be reduced by any amounts owed by Executive to the Company and any amounts for any loans, or funds advanced, to, Executive; provided , further , that if, on or after a Change of Control (as defined in the LLC Agreement), Executive’s employment is (or has previously been) terminated by the Company without Cause (other than by death or Disability) or if Executive resigns (or has previously resigned) for Good Reason, a lump sum amount equal to the aggregate amount remaining payable under this subsection (B) shall, as soon as practicable, but in no event later than 15 days, after the later of the effective date of such termination

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or such Change of Control, be paid to Executive, subject to repayment unless Executive continues to comply with the provisions of Sections 9 and 10; provided , that such repayment shall be paid in a lump sum upon demand by the Company, and shall be in an amount equal to the lump sum payment made pursuant to this subsection (B) multiplied by a fraction, the numerator of which is the number of months the Executive fails to comply with the provisions of Sections 9 or 10 during the first 12 months following the effective date of Executive’s termination of employment, and the denominator of which is the number of monthly installments comprising the lump sum payment which was paid to Executive; and

(C)                                 subject to Executive’s continued compliance with the provisions of Sections 9 and 10, continuation of welfare benefits for Executive and her family (pursuant to the same benefit plans as in effect for active executive employees of the  Company) (i) for a period through the later of (x) the second anniversary of the date of such termination, or (y) the date on which the Employment Term would have otherwise expired, or (ii) if Executive commences receiving coverage under comparable welfare benefit plans from any subsequent employer (“Comparable Coverage”) prior to the occurrence of (x) or (y) of the preceding clause, through the date such Comparable Coverage commences.

Following Executive’s termination of employment by the Company without Cause (other than by reason of Executive’s death or Disability) or by Executive’s resignation for Good Reason, except as set forth in this Section 8(c)(iii), and Sections 13 and 14 of this Agreement, Executive shall have no further rights to any compensation or any other benefits under this Agreement; provided , however , that Executive’s rights with respect to her equity participation shall be governed solely by the Equity Documents.

d.                                       Expiration of Employment Term .  In the event either party delivers a Notice of Nonrenewal, unless Executive’s employment is earlier terminated pursuant to paragraphs (a), (b) or (c) of this Section 8, Executive’s termination of employment hereunder (whether or not Executive continues as an employee of the Company thereafter) shall be deemed to occur on the close of business on the next scheduled Extension Date and Executive shall be entitled to receive the Accrued Rights (including, without limitation, her full Annual Bonus for her final year of employment).  Following such termination of Executive’s employment hereunder as a result of either party’s election not to extend the Employment Term, except as set forth in this Section 8(d) and in Sections 13 and 14, Executive shall have no further rights to any compensation or any other benefits under this Agreement, and the Executive shall have no further obligations under Section 9, provided, however, that Executive’s rights with respect to her equity participation shall be governed solely by the Equity Documents, and solely in respect of the Executive’s rights under the Equity Documents: (i) if the Company delivers a Notice of Nonrenewal, and Executive subsequently terminates her employment with the Company, Executive’s employment shall be deemed terminated by Executive for Good Reason; and (ii) if the Executive delivers a Notice of Nonrenewal, and Executive subsequently terminates her employment with the Company, Executive’s employment shall be deemed terminated by Executive without Good Reason.  For the avoidance of doubt, any changes set forth in this Section 8(d) relating to the termination of Executive’s employment by Executive after either party delivers a Notice of Nonrenewal shall apply only for purposes of the Equity Documents, and shall have no further effect on this Agreement.  Notwithstanding the foregoing, if the

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