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