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PERFORMANCE UNIT AWARD AGREEMENT

Performance Unit Award Agreement

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This Performance Unit Award Agreement involves

TXU CORP

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Title: PERFORMANCE UNIT AWARD AGREEMENT
Governing Law: Texas     Date: 5/9/2007

PERFORMANCE UNIT AWARD AGREEMENT, Parties: txu corp
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Exhibit 10.4

 

 

 

 

PERFORMANCE UNIT AWARD AGREEMENT

 

THIS PERFORMANCE UNIT AWARD AGREEMENT (“Award Agreement”) is made and entered effective as of the 1 st day of April, 2007, by and between TXU CORP., a Texas corporation (“Company”), and «Participant» (“Participant”).

 

WHEREAS, the Company has adopted the TXU Corp. 2005 Omnibus Incentive Plan (“Plan”), the purpose of which is to assist the Company in attracting, retaining and motivating executive officers and other key employees essential to the success of the Company through performance-related incentives linked to long-range performance goals; and

 

WHEREAS, the Plan provides for various types of stock and cash based incentive compensation awards, as well as covered employee annual incentive awards to be made to eligible Employees; and

 

WHEREAS, in accordance with the provisions of the Plan, the Participant has been designated as being eligible to receive an award of performance units (“Award”) payable in, and valued on the basis of, Company common stock as described herein (“Performance Units”) in order to carry out the intent and purposes of the Plan all as set forth herein; and

 

WHEREAS, this Award Agreement constitutes part of a prospectus covering the Performance Units which are being awarded hereunder, where Company common stock constituting the value of the Award has been registered under the Securities Act of 1933; and

 

WHEREAS, Company and Participant agree that this Award Agreement is subject to the terms and conditions of the Merger Agreement, dated February 25, 2007, among TXU Corp. and Texas Energy Future Holdings Limited Partnership (“Merger Agreement”) and no term(s) or condition(s) of this Award Agreement is intended to, nor does it, alter any of the terms and conditions of the Merger Agreement; and

 

WHEREAS, Company and the Participant also agree that if the merger, as described in the Merger Agreement, closes as set forth in the Merger Agreement (“Closing”), this Award Agreement will be modified automatically, as provided for herein.

 

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

 

1.   Award of Performance Units . The Company hereby awards to Participant «Award» Performance Units, each such Performance Unit having a value equal to one share of the Company’s common stock, without par value (“Company Stock”), pursuant to the terms and subject to the conditions and restrictions set forth herein.

 

2.   Performance Period and Adjustment of Number of Performance Units . The award of Performance Units shall be subject to comparative total shareholder return performance criteria as described below. For purposes of determining the adjustments to the number of Performance Units under this section, the Target Award (“Target”) shall be the number of Performance Units awarded under Section 1 hereof plus any additional Performance Units added

 

 


 

to this Award during the Performance Period by virtue of the “dividends” provisions of Section 6 hereof.

 

(a)   During the period commencing April 1, 2007 and ending at either March 31, 2010 or at Closing, if it occurs before March 31, 2010 (“Performance Period”), the Company’s financial performance, measured in terms of total shareholder return, shall be compared to, and measured against, the performance of other companies within a peer group consisting of the Standard & Poor’s 500 Electric Utilities Index (“Peer Group”). Upon the expiration of the Performance Period, the Committee will compare the Company’s total shareholder return with the total shareholder return of the companies within the Peer Group and determine the Company’s percentile ranking within the Peer Group during the Performance Period.

 

(b)   Based on the Company’s performance within the Peer Group during the Performance Period, the number of Performance Units shall be adjusted in accordance with the methodology set forth below. For purposes of this Agreement, the term Performance Units will include such adjusted number of Performance Units.

 

 

Performance Levels

Total Shareholder Return Ranges

Initial Number of Performance Units Adjusted by the Following:

Maximum

81st Percentile & Above

Maximum payout (200% of Target)

150% of Target

71st - 80.99 th Percentiles  

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

125% of Target

61st - 70.99 th Percentiles

Interpolate between 125% of Target & 150% of Target

Target

51st - 60.99 th Percentiles  

Interpolate between 100% of Target & 125% of Target

Minimum

41st - 50.99 th Percentiles  

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

Zero

40.99 th Percentile & Below

No payout

 

3.   Vesting, Valuation and Payment of Award .

 

(a)   The Performance Units, as adjusted in accordance with the provisions of Sections 2(a) and 2(b) above, shall become vested upon the expiration of the Performance Period, and shall be valued as of the date of the Committee’s determination of the Company’s performance within the Peer Group during the Performance Period (“Valuation Date”), at which time the adjustment described in Section 2(b) shall be made. In calculating the value of the Award, each Performance Unit will equal the value of the average of the high and low trading price of one (1) share of Company Stock on the Valuation Date.

 

(b)   This Award shall be paid to Participant in the form of shares of Company Stock having an aggregate value equal to the value of the Award determined


 
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