Exhibit 10.4
PERFORMANCE UNIT AWARD
AGREEMENT
THIS PERFORMANCE UNIT AWARD
AGREEMENT (“Agreement”) is made and entered effective
as of the 1 st day of April, 2005, by and between
TXU CORP., a Texas corporation (“Company”), and C. John
Wilder (“Participant”).
WHEREAS, the Company has adopted the
TXU Corp. 2005 Omnibus Incentive Plan (“Plan”), the
primary purpose of which is to promote the interests of the Company
and its shareholders through: (i) the attraction and retention of
executive officers and other key employees, as well as non-employee
directors, all of whom are essential to the success of the Company;
(ii) the motivation of executive officers and other key employees
using performance-related incentives linked to long-range
performance goals and the interests of Company shareholders; and
(iii) enabling such employees to share in the long-term growth and
success of the Company; and
WHEREAS, the Plan provides for
various types of stock-based incentive compensation awards as
determined in the sole discretion of the Organization and
Compensation Committee of the Board of Directors of the Company
(“Committee”), which administers the Plan;
and
WHEREAS, in accordance with the
provisions of the Plan, the Committee desires to award Participant
performance units payable in stock 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 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.
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 150,000 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, 2005 and ending March 31, 2008 (“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. The Company will also set minimum, target and
maximum
1
performance levels in terms of the
Company’s total shareholder return as compared to total
shareholder return of the companies within the Peer
Group.
(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.
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Performance Levels
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Total Shareholder Return
Ranges
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Initial Number of Performance Units Adjusted by
the Following:
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Maximum
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81st Percentile
& Above
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Maximum payout
(200% of Target)
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150% of Target
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71st -
80.99 th Percentiles
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Interpolate
between 150% of Target & Maximum (150% & 200% of
Target)
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125% of Target
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61st -
70.99 th Percentiles
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Interpolate
between 125% of Target & 150% of Target
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Target
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51st -
60.99 th Percentiles
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Interpolate
between 100% of Target & 125% of Target
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Minimum
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41st -
50.99 th Percentiles
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Interpolate
between Minimum & Target (50% to 100% of Target)
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Zero
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40.99
th
Percentile &
Below
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No
payout
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3. Vesting, Valuation and Payment
of Award .
(a) The Performance Units, as
adjusted in accordance with the provisions of Section 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
ma
