IN THE UNITED STATES DISTRICT COURTNORTHERN DISTRICT OF TEXAS

DALLAS DIVISION

HARRY SCHIPPER, Individually and on ) CIVIL ACTION NO. 3-07CV1281-GBehalf of All Others Similarly Situated, )

Plaintiff, )

vs. )

TXU CORP., C. JOHN WILDER, JAMES )

OESTERREICHER, KERNEY LADAY, SR.,)

JACK LITTLE, GLENN TILTON, )

LEONARD ROBERTS, E. GAIL DE )

PLANQUE, LELDON E. ECHOLS, )

GERARDO LOPEZ, and MICHAEL )

RANGER, )

Defendants. )

CAUSE NO. 07-01779

IN THE DISTRICT COURT OFIn re TXU Corp. Derivative Litigation DALLAS COUNTY, TEXAS

44`x' JUDICIAL DISTRICT

SETTLEMENT AGREEMENT

Plaintiff Harry Schipper, individually and on behalf of all Settlement Class Members]

("Plaintiff Schipper"), and plaintiffs Walter and Rita Goldmann, individually and on behalf of

TXU Corp. (collectively , "Plaintiff Goldmann" and, along with Plaintiff Schipper, "Plaintiffs")

All defined terms are defined in the Definitions section unless defined in these Recitals orotherwise indicated.

and the Settling Defendants, by and through their undersigned attorneys, enter into the following

Settlement Agreement, subject to court approval,

RECITALS

A. Plaintiffs purchased or acquired shares of the common stock ofTXU Corp.

("TXU") and held such shares at all relevant times;

B. TXU was, at all relevant times hereto, a corporation duly organized and existing

under the laws of the State of Texas, with its principal place of business located at 1601 Bryan

Street, Dallas, Texas 75201-3411;

C. On February 26, 2007, TXU announced that TXU's Board had unanimously

approved an agreement and plan of merger (the "Merger Agreement"), pursuant to which, among

other things, an acquisition entity formed by Kohlberg Kravis Roberts & Co. and Texas Pacific

Group (collectively, the "Sponsors"), as well as certain financial institutions, agreed to acquire

TXU and the outstanding shares of common stock ofTXU would be converted into the right to

receive $69.25 per share (the "Proposed Acquisition");

D. Between February 27, 2007, and March 20, 2007, three actions styled Gary and

Lon Grady, Derivatively On BehalfofTXU Corp. v. C. John Wilder, et al., No. 07-1779;

Catholic Medical Mission Board, Derivatively On Behalf ofTXU Corp. v. C John Wilder, et al.,

No. 07-01842; and Walter and Rita Goldmann, derivatively on behalfofTXU Corp. v. C. John

Wilder, et al., No. 07-2482 (collectively, the "State Derivative Actions"), were filed in state

district court in Dallas County, Texas (the "State Court") derivatively on behalf ofTXU against

the Sponsors, the Director Defendants, and various financial institutions alleging that these

defendants breached their fiduciary duties, or aided and abetted other defendants' breaches of

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their fiduciary duties, by failing to conduct a proper sale process in connection with the Proposed

Acquisition and to obtain adequate consideration for TXU's shareholders;

E. Between March 5, 2007, and March 8, 2007, three actions styled Staehr v. Wilder,

et al., Civil No. 07-0432, Cohen v. Echols, et al., Civil No. 07-0422, and Gottdiener v. Echols, et

al., Civil No. 07-0406 (collectively, the "Federal Derivative Actions"), were filed in the United

States District Court for the Northern District of Texas (the "Federal Court") on behalf ofTXU

against the Sponsors and the Director Defendants alleging that these defendants breached their

fiduciary duties, or aided and abetted other defendants' breaches of their fiduciary duties, by

failing to conduct a proper sale process in connection with the Proposed Acquisition and to

obtain adequate consideration for TXU's shareholders;

F. Between February 25, 2007, and March 7, 2007, eight shareholder class actions

(collectively, the "State Class Actions") were filed in State Court on behalf ofTXU against the

Sponsors, the Director Defendants, and various financial institutions alleging that these

defendants breached their fiduciary duties, or aided and abetted other defendants' breaches of

their fiduciary duties, by failing to conduct a proper sale process in connection with the Proposed

Acquisition and to obtain adequate consideration for TXU's shareholders;

G. On March 26, 2007, the State Derivative Actions were consolidated under the

caption In re 7XU Corp. Derivative Litigation, Consolidated Cause No. 07-1779, in the State

Court;

H. On March 26, 2007, the State Class Actions were consolidated under the caption

In re TXU Corp. Shareholder Litigation, Consolidated Cause No. 07-01707, in the State Court;

1. On March 27, 2007, the defendants moved to dismiss the Federal Derivative

Actions, which motions arc still pending;

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J. On April 11, 2007, an Amended Consolidated Class Action Petition was filed in

In re TXU Corp. Shareholder Litigation in the State Court;

K. Also on April 11, 2007, a Consolidated Amended Shareholder Derivative Petition

for Breach of Fiduciary Duty was filed in In re TXU Corp. Derivative Litigation in the State

Court;

L. On May 18, 2007 , an order was entered by the State Court in In re TXU Corp.

Derivative Litigation, Consolidated Cause No. 07-1779, staying that action, and a Derivative

Demand Committee appointed by TXU's Board (the "Committee") subsequently began an

investigation of the allegations in that action and of similar derivative claims asserted in the

Federal Derivative Actions;

M. On May 25 , 2007 , an order was entered by the State Court in In re TXU Corp.

Shareholder Litigation , Consolidated Cause No. 07-01707, granting the defendants' pleas to the

jurisdiction, special exceptions, and motions to dismiss the First Amended Consolidated Class

Action Petition;

N. On May 31, 2007, the plaintiff in In re 7XU Corp. Shareholder Litigation,

Consolidated Cause No . 07-01707, filed a motion for reconsideration and new trial;

0. On June 14, 2007, TXU filed a preliminary proxy statement with the Securities

and Exchange Commission ("SEC") relating to the shareholder vote on the Merger Agreement

(the "Preliminary Proxy Statement");

P. On July 3, 2007, a shareholder class action captioned Gottdiener, et al. v. Echols,

et al., Civil No. 07-1200, was filed in the Federal Court alleging claims similar to those in In re

TXU Corp. Shareholder Litigation;

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Q. On July 11, 2007, the Federal Court granted the plaintiffs unopposed motion to

dismiss Gottdiener, et al. v. Echols, et al., Civil No. 07-1200, without prejudice;

R. After reviewing the Preliminary Proxy Statement and certain documents produced

by the Settling Defendants, on July 13 , 2007, counsel for Plaintiff Schipper in Schipper v. TXU

Corp., et al., Civil No. 07-1281 ("Schipper"), and counsel for Plaintiff Goldmann in In re TXU

Corp. Derivative Litigation jointly wrote to counsel for the Sponsors setting forth, inter alia, the

terms upon which Plaintiffs would consider a settlement of claims arising from the Merger (the

"Settlement Demand Letter");

S. On July 18, 2007, the Committee filed a motion in the State Court to extend the

stay of In re IXU Corp. Derivative Litigation , which motion is still pending;

T. On July 19, 2007, Schipper was filed in the Federal Court against TXU and the

Director Defendants on behalf ofTXU's common shareholders alleging that the Preliminary

Proxy Statement contains material misrepresentations and omissions in violation of the federal

securities laws;

U. Thereafter, counsel for Plaintiffs and counsel for the Sponsors engaged in

extensive negotiations , pursuant to which the Sponsors agreed, subject to TXU's approval, to (i)

make supplemental disclosures to TXU shareholders, and (ii) modify the Termination Fee (as

that term is defined in the Merger Agreement);

V. While TXU' s Board determined that neither TXU nor any individual Board

member would contribute any monetary consideration to any plaintiff in connection with the

settlement , TXU, through its Board, agreed to make supplemental disclosures , as set forth in

Paragraph 2.1 below, and to modify the Termination Fee, as set forth in Paragraph 2.2 below;

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W. On July 23, 2007, after engaging in good faith discussions and arm ' s-length

negotiations with regard to the possible settlements of Schipper and In re TXU Corp. Derivative

Litigation (collectively, the "Settled Actions"), Plaintiffs and the Settling Defendants

(collectively , the "Settling Parties") reached an agreement in principle providing for the

settlement of Schipper (the "Federal Settlement") and the settlement ofIn re TXU Corp.

Derivative Litigation (the "State Settlement" and, along with the Federal Settlement, the

"Settlements"), subject to Plaintiffs conducting discovery concerning the fairness,

reasonableness, and adequacy of the Settlements, and further subject to the negotiation of this

Settlement Agreement;

X. On July 25, 2007, TXU filed a definitive proxy statement which set September 7,

2007, as the date for the shareholder vote on the Merger Agreement and which includes certain

disclosures requested by Plaintiffs in the Settlement Letter (the "Definitive Proxy Statement");

Y. On July 25, 2007, the plaintiff in In re TXU Corp. Shareholder Litigation,

Consolidated Cause No. 07-01707, withdrew his motion for reconsideration and new trial;

Z. On September 7, 2007, the shareholders ofTXU approved the Merger;

AA. The Settling Parties recognize the substantial time and expense that would be

incurred by further litigation in this matter and the uncertainties inherent in any such litigation;

BB. The Settling Parties have concluded that their interests would be best served by a

settlement of the Settled Actions;

CC. The initiation and prosecution of the Actions , the averments contained in the

various complaints, and the Settlements were material contributing factors in TXU's decision to

amend portions of the Definitive Proxy Statement, as set forth in Paragraph 2.1 below, and to

modify the Termination Fee, as set forth in Paragraph 2.2 below;

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DD. The Released Persons deny all allegations of wrongdoing, fault, liability or

damage to Plaintiffs and the putative class, deny that they engaged in any wrongdoing, deny that

they committed any violation of law, deny that they acted improperly in any way, believe that

they acted properly at all times, and believe the Actions have no merit, but wish to settle the

Settled Actions on the terms and conditions stated herein in order to eliminate the burden and

expense of further litigation, and to put the Released Claims to rest, without in any way

acknowledging any wrongdoing, fault, liability or damage to Plaintiffs and the Settlement Class;

and

EE. Plaintiffs and their counsel have considered: (i) the facts developed during

Plaintiffs' investigation of this matter; (ii) the attendant risks of litigation and the uncertainty of

the outcome of the Settled Actions; (iii) that the supplemental disclosures by TXU and

modification to the termination fee, as described below, provide a substantial benefit to the TXU

common shareholders; and (iv) that, under the circumstances, the terms and conditions of the

Settlement are fair, reasonable, and adequate, and that it is in the best interests of Plaintiffs and

the TXU Shareholders to settle the Settled Actions as set forth below.

NOW, THEREFORE, IT IS STIPULATED AND AGREED, subject to court

approval, by Plaintiffs and the Settling Defendants, as follows:

1. DEFINITIONS

As used in this Settlement Agreement, the following terms have the meanings specified

below:

1.1. "Actions" means all of the actions referenced in the Recitals.

1.2. "Defendants" means the defendants named in the Actions.

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1.3. "Director Defendants" and the "Board" mean C. John Wilder, James

Oesterreicher, Kerney Laday, Sr., Jack Little, Glenn Tilton, Leonard Roberts, Leldon E. Echols,

Gerardo Lopez, and Michael Ranger.2

1.4. "Effective Date" means the first date by which all of the conditions and events

specified in Paragraph 2.7 hereof have been met and have occurred.

1.5. "Federal Judgment" means the judgment to be rendered by the Federal Court,

substantially in the form attached hereto as Exhibit B.

1.6. "Final" means the date when an order is no longer subject to further appeal or

review, whether by exhaustion of any possible appeal, writ of certiorari, lapse of time or

otherwise.

1.7. "Judgments" means the Federal Judgment and the State Judgment.

I.S. "Merger" means the acquisition of TXU and the conversion of the outstanding

shares of common stock ofTXU into the right to receive $ 69.25 per share.

1.9. "Person" means an individual, corporation, partnership, limited partnership,

association, joint stock company, estate, legal representative, trust, unincorporated association,

government or any political subdivision or agency thereof, and any business or legal entity and

their spouses, heirs, predecessors, successors , representatives , or assignees.

1.10. "Released Claims" means any and all claims, demands, rights, actions or causes

of action, liabilities, damages, losses, obligations, judgments, suits, injunctions, fees, expenses,

costs, matters and issues of any kind or nature whatsoever, whether known or unknown,

contingent or absolute, suspected or unsuspected, disclosed or undisclosed, hidden or concealed,

While E. Gail De Planque was a member of the Board, she recused herself from any deliberationrelated to the Proposed Acquisition and was non-suited, dismissed, or not named in the Actions.

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matured or unmatured, that have been, could have been, or in the future can or might be asserted

in the Settled Actions, or in any court, tribunal or proceeding (including, but not limited to, any

claims arising under federal or state statutory or common law relating to alleged fraud, breach of

any duty, negligence, violations of the federal securities laws or otherwise), including claims by

or on behalf of any member of the Settlement Class (whether individual, class, derivative,

representative, legal, equitable or any other type or in any other capacity), against the Released

Persons whether or not any such Released Persons were named, served with process or appeared

in the Settled Actions, which have arisen, could have arisen, arise now or hereafter arise out of,

or relate in any manner to the Merger, the Proposed Acquisition, or the allegations, facts, events,

matters, statements, representations, misrepresentations, omissions, or any other matter, thing or

cause whatsoever, or any series thereof, embraced, involved or set forth in, or referred to or

otherwise related to: (i) the Merger or the Proposed Acquisition, or any amendment thereto; (ii)

the fiduciary obligations of any of the Released Persons in connection with the Merger or the

Proposed Acquisition, or any amendment thereto; (iii) the negotiations in connection with the

Merger or the Proposed Acquisition, or any amendment or supplement thereto; and (iv) the

disclosure obligations of any of the Released Persons in connection with the Merger or the

Proposed Acquisition, or any amendment thereto, including any allegations of misrepresentations

and/or omissions in the Preliminary Proxy Statement and/or the Definitive Proxy Statement and

exhibits thereto or any amendment thereto; provided however, that the Released Claims shall not

include any appraisal right of the Plaintiffs or any members of the Settlement Class or the rights

of the Plaintiffs or any members of the Settlement Class to enforce the terms of this Settlement

Agreement in the Federal Court or the State Court, as the case may be;

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1.11. "Released Persons" means Kohlberg Kravis Roberts & Co., TPG Capital, L.P.

(f/k/a Texas Pacific Group), TXU Corp., Leldon E. Echols, Kerney Laday, Jack E. Little,

Gerardo I. Lopez, J.E. Oesterreicher, Michael W. Ranger, Leonard H. Roberts, Glenn F. Tilton,

C. John Wilder, E. Gail de Planque, Goldman, Sachs & Co., Goldman Sachs Credit Partners

L.P., GS Capital Partners VI Fund, L.P., GSCP VI Offshore TXU Holdings, L.P., GS Capital

Partners VI Offshore, L.P., GSCP VI Germany TXU Holdings, LP, GS Capital Partners VI

GmbH & Co. KG, GS Capital Partners VI Parallel, L.P., GS Global Infrastructure Partners I, LP,

GS Infrastructure Offshore TXU Holdings, LP, GS International Infrastructure Partners I, L.P.,

GS Institutional Infrastructure Partners I, LP, KKR 2006 Fund, L.P., KKR PEI Investments,

L.P., KKR Partners III, L.P., TPG Partners V, L.P., TPG Partners IV, L.P., TPG FOF V-A, L.P.,

TPG FOF V-B, L.P., Texas Energy Future Co-Invest, LP, Citigroup Global Markets Inc.,

Citigroup Alternative Investments LLC, JPMorgan Chase Bank, N.A., J.P. Morgan Securities

Inc., J.P. Morgan Ventures Corporation, Lehman Brothers, Inc., Lehman Brothers Commercial

Bank, Lehman Commercial Paper Inc., Lehman Brothers Co-Investment Partners L.P., Lehman

Brothers Co-Investment Capital Partners L.P., Lehman Brothers Co-Investment Group L.P.,

Lehman Brothers PEP Investments I, L.P. (Incorporated), Lehman Brothers Fund of Funds

XVIII --- Co-Investment Holdings, LP, Lehman Brothers Secondary Opportunities Pooling, LP,

Lehman Brothers Real Assets Fund, LP, LB I Group, Inc., Morgan Stanley & Co. Incorporated,

Morgan Stanley Senior Funding, Inc., Energy Future Holdings Corp. ("EFH"), Texas Energy

Future Holdings Limited Partnership, Texas Energy Future Capital Holdings LLC and Texas

Energy Future Merger Sub Corp and/or their respective families, parent entities, associates,

affiliates or subsidiaries, and each and all of their respective past, present or future officers,

directors, stockholders, agents, representatives, employees, attorneys, financial or investment

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advisors, advisors, consultants, accountants, investment bankers, commercial bankers, trustees,

engineers, agents, insurers, co-insurers and reinsurers, heirs, executors, trustees, general or

limited partners or partnerships, limited liability companies, members, investors, heirs,

executors, personal or legal representatives, estates, administrators, predecessors, successors and

assigns.

1.12. "Settlement Class" means a non-opt out class for settlement purposes of all

holders ofTXU common stock at any time from February 23, 2007, through and including

October 10, 2007, including any and all of their respective successors-in-interest, predecessors,

representatives, trustees, executors, administrators, heirs, assigns, or transferees, immediate and

remote, and any person or entity acting for or on behalf of, or claiming under, any of them, and

each of them. Excluded from the Settlement Class are Defendants, members of the immediate

family of any such Defendant, any entity which such a Defendant has or had a controlling

interest, officers ofTXU and the legal representatives, agents, executors, heirs, successors or

assigns of any such excluded person.

1.13. "Settlement Class Member(s)" means a Person who falls within the definition of

the Settlement Class as set forth in Paragraph 1.12 of this Settlement Agreement.

1.14. "Settling Defendants" means the Sponsors and TXU, for the purposes described

herein.

1.15. "State Judgment" means the judgment to be rendered by the State Court,

substantially in the form attached hereto as Exhibit D.

1.16. "I'XU Shareholders" means all Persons who held TXU common stock at any time

from November 27, 2006, to October 10, 2007.

I1

2. TERMS OF SETTLEMENT AGREEMENT AND AGREEMENT OFSETTLEMENT

2.1. In consideration for the dismissal and release of the Released Claims against the

Released Persons and the settlement of the Settled Actions, the Settling Defendants agreed to,

and did, include in the Definitive Proxy Statement the following disclosures requested in the

Settlement Demand Letter:

(a) information detailing whether members of the Sponsors and management

or TXU 's Board or management had any material, pre-existing

relationships , including joint board service or business relationships,

which allowed shareholders to assess potential conflicts of interests of the

transaction;

(b) information concerning TXU's and the Sponsors ' efforts to garner support

for the Merger from both the environmental lobby and legislature;

(c) information pertaining to TXU' s future environmental efforts;

(d) information pertaining to the "go-shop" process , which allowed

shareholders to evaluate the effectiveness of the process;

(e) information detailing how TXU' s financial advisor concluded that the

discount rates and other financial metrics it employed were accurate and

appropriate relative to its analysis ofTXU' s weighted average cost of

capital and internal rates of return, which allowed shareholders to evaluate

the reasonableness of the analysis;

(f) information pertaining to changes to the opinion of the financial advisor

since the date of the Merger Agreement based on subsequent earnings

announcements, modifications to projections, or changes in assumptions

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stemming from either financial, global, industry specific, or company

specific occurrences; and

(g) information pertaining to the actions taken by the Committee in response

to.the litigation and claims asserted therein, including the demand made on

the Board.

2.2. Pursuant to a letter dated July 23, 2007, Texas Energy Future Holdings Limited

Partnership and Texas Energy Future Merger Sub Corp., the entities formed by the Sponsors to

acquire TXU, confirmed to TXU their understanding that, notwithstanding Section 8.5(b) of the

Merger Agreement, the Termination Fee shall be in the amount of $1,000,000,000.00 (one

billion dollars) if the Termination Fee becomes payable in connection with a termination

pursuant to Section 8.4(a) of the Merger Agreement that is not made in respect of a Superior

Proposal (as that term is defined in the Merger Agreement), but otherwise the Termination Fee

shall be an amount equal to $925,000,000.00 (nine hundred twenty five million dollars).

2.3. Settling Defendants have provided or will provide discovery, including such

documents, interviews , and/or depositions as reasonably requested by Plaintiffs ' counsel, to

Plaintiffs' counsel at a time mutually agreed to by the Settling Parties to confirm the fairness and

adequacy of the Settlements and the disclosures related to the Proposed Acquisition.

2.4. The Settling Parties agree , pursuant to Federal Rule of Civil Procedure 23(b)(1)

and (b)(2), for settlement purposes only, that Schipper shall proceed as a non-opt-out class action

on behalf of the Settlement Class.

2.5. All proceedings in the Settled Actions, except Settlement-related proceedings,

shall be stayed until the Effective Date. The Settling Parties further agree, if necessary, to jointly

request a stay of any proceedings in any other action pending final approval of the Settlements.

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2.6. Pending final determination of whether the Settlements should be approved,

Plaintiffs, all Settlement Class Members, and all TXU Shareholders, and any of them, are barred

and enjoined from commencing, prosecuting, instigating or in any way participating in the

commencement or prosecution of any action asserting any Released Claims, either directly,

representatively, derivatively or in any other capacity, against any Released Person.

2.7. The Settlements shall be conditioned on the occurrence, and shall be deemed

effective after all of the following conditions have been satisfied, provided however, that the

Settlements are not conditioned on any court's approval of the award of attorneys' fees provided

for herein:

(a) Plaintiff Schipper's counsel concludes, after obtaining the discovery

requested and agreed upon, that the Federal Settlement memorialized

herein is fair, reasonable, adequate, and in the best interests of the

Settlement Class;

(b) Plaintiff Goldmann's counsel concludes, after obtaining the discovery

requested and agreed upon, that the State Settlement memorialized herein

is fair, reasonable , adequate , and in the best interests of TXU;

(c) the Merger has been consummated;

(d) the Federal Court has entered the Federal Judgment, or a judgment

substantially in the form of Exhibit B attached hereto, the Federal

Judgment has become Final, Schipper is dismissed with prejudice, and the

dismissal of Schipper has become Final;

(e) the State Court has entered the State Judgment, or a judgment substantially

in the form of Exhibit D attached hereto, the State Judgment has become

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Final, In re 7XU Corp. Derivative Litigation is dismissed with prejudice,

and the dismissal of In re TXU Corp. Derivative Litigation has become

Final;

(f) the Federal Derivative Actions have been dismissed with prejudice, and

the dismissal of the Federal Derivative Actions has become Final; and

(g) the plaintiff in In re TXU Corp. Shareholder Litigation, Cause No. 07-

01707, has dismissed with prejudice any appeal or other challenge to the

dismissal of that action with prejudice.

2.8. If all of the conditions specified in Paragraph 2.7 hereof are not satisfied, then this

Settlement Agreement shall be canceled and terminated subject to Paragraph 2.9 hereof, unless

Plaintiffs' counsel and counsel for the Settling Defendants mutually agree in writing to proceed

with this Settlement Agreement.

2.9. In the event that the conditions in Paragraph 2.7 are not satisfied in full or the

Settlements set forth in this Settlement Agreement is terminated in accordance with its terms,

this Settlement Agreement shall be null and void and of no force and effect and the Settling

Parties shall be restored to their respective positions in the Actions as of July 22, 2007, unless

otherwise agreed to by the Settling Parties pursuant to Paragraph 2.8. In such event, (i) the

existence of this Settlement Agreement, its contents, and the negotiations leading to it (a) shall

have no further force and effect with respect to the Settling Parties, and (b) shall not be

admissible in evidence, nor referred to for any purpose, in the Settled Actions or in any other

litigation or proceeding, and (ii) any judgment or order entered by any court in accordance with

the terms of this Settlement Agreement shall be treated as vacated, nunc pro tune. Settling

Defendants reserve the right to oppose certification of any class in future proceedings in such

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event and further reserve all other rights and defenses that Settling Defendants could have raised

had the Settlements not been entered into by the Settling Parties.

3. SETTLEMENT APPROVAL HEARINGS

3.1. Within a reasonable period of time after execution of this Settlement Agreement,

Plaintiff Schipper's counsel shall submit this Settlement Agreement together with its Exhibits to

the Federal Court and shall apply for entry of a preliminary approval order, substantially in the

form of Exhibit A hereto (the "Preliminary Approval Order"), requesting, inter alia , certification

of the Settlement Class pursuant to Federal Rule of Civil Procedure 23(b)(1) and (b)(2),

preliminary approval of the Federal Settlement, and approval of the form and manner of the

mailing of a notice substantially in the form attached as Exhibit E to this Settlement Agreement

(the "Notice") to members of the Settlement Class and the publication of summary notice

substantially in the form attached as Exhibit F to this Settlement Agreement (the "Summary

Notice") one time each in the National Edition ofTHE WALL STREET JOURNAL and the Dallas

Morning News, and scheduling a date for a fairness hearing (the "Fairness Hearing") to

determine whether the Federal Judgment substantially in the form attached as Exhibit B to this

Settlement Agreement should be entered finally approving the Federal Settlement, approving the

release, and dismissing this action with prejudice. The Notice shall include the general terms of

the State Settlement and the Federal Settlement as provided in this Settlement Agreement and the

dates of the Fairness Hearing in Federal Court and the Settlement Hearing in the State Court.

3.2. Within a reasonable period of time after execution of this Settlement Agreement,

Plaintiff Goldmann's counsel shall submit this Settlement Agreement together with its Exhibits

to the State Court and will apply to the State Court for a scheduling order, substantially in the

form attached as Exhibit C to this Settlement Agreement (the "Scheduling Order"), requesting,

inter alia, preliminary approval of the State Settlement and approval of the form and manner of

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the mailing of the Notice to all TXU Shareholders in accordance with Texas Business

Organizations Code 21.560(b) and the publication of the Summary Notice, and scheduling a date

for a settlement hearing (the "Settlement Hearing") to determine whether the State Judgment

substantially in the form attached as Exhibit D to this Settlement Agreement should be entered

finally approving the State Settlement, approving the release, and dismissing this action with

prejudice.

3.3. Plaintiffs' counsel shall assume the responsibility of providing the Notice and

Summary Notice in accordance with the Preliminary Approval Order and the Scheduling Order.

Prior to the Fairness Hearing, Plaintiffs' counsel shall file with the Federal Court an appropriate

affidavit or declaration with respect to preparing and mailing of the Notice to the Settlement

Class and publication of the Summary Notice. Prior to the Settlement Hearing, Plaintiffs'

counsel shall file with the State Court an appropriate affidavit or declaration with respect to

preparing and mailing of the Notice to the TXU Shareholders and publication of the Summary

Notice. EFH shall pay all reasonable costs and expenses incurred in providing the Notice and

Summary Notice when and as billed by the Settlement Administrator, with the understanding

that notice shall be effected as set forth in Paragraphs 3.1 and 3.2 above.

3.4. If the Federal Court approves the Federal Settlement (including any modifications

thereto made with the consent of all Settling Parties) following the Fairness Hearing as fair,

reasonable and adequate and in the best interests of the Settlement Class, the Settling Parties

jointly shall request the Federal Court to enter the Federal Judgment substantially in the form

attached hereto as Exhibit B.

3.5. If the State Court approves the State Settlement (including any modifications

thereto made with the consent of all Settling Parties) following the Settlement Hearing as fair,

17

reasonable and adequate, the Settling Parties jointly shall request the State Court to enter the

State Judgment substantially in the form attached hereto as Exhibit D.

4. RELEASE

4.1. Upon the Effective Date , Plaintiffs, each of the Settlement Class Members and

each of the TXU Shareholders shall be deemed to have, and by operation of the Judgments shall

have, fully, finally, and forever released, relinquished and discharged all Released Claims

(including claims that Plaintiffs , each of the Settlement Class Members and each of the TXU

Shareholders do not know or suspect to exist at the time of the release, which if known, might

have affected such party's decision to enter into the release) against the Released Persons. By

operation of the entry of the Judgments, upon the Effective Date, Plaintiffs, the Settlement Class

Members, and the TXU Shareholders for themselves and their respective heirs, executors,

administrators, predecessors, representatives, agents, successors, and assigns, agree to waive and

shall be deemed to have waived any and all provisions, rights and benefits which they now have,

or in the future may have by virtue of the provisions of § 1542 of the California Civil Code and

any other similar, comparable or equivalent law or provision with respect to the Released

Claims, which section provides as follows:

A general release does not extend to claims which the creditor doesnot know or suspect to exist in his favor at the time of executingthe release, which if known by him must have materially affectedhis settlement with the debtor.

4.2. Upon the Effective Date , the Judgments will permanently bar and enjoin the

institution and prosecution by Plaintiffs, any Settlement Class Members, and any TXU

Shareholders of any other action against any Released Person in any court asserting any Released

Claims.

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4.3. Upon the Effective Date, each of the Released Persons shall be deemed to have,

and by operation of the Judgments shall have, fully, finally, and forever released, relinquished

and discharged Plaintiffs, each and all of the Settlement Class Members, each and all of the TXU

Shareholders and Plaintiffs' counsel in the Settled Actions from any and all claims, based upon

or arising out of the institution, prosecution, assertion, settlement or resolution of the actions or

the Released Claims.

5. CLASS ACTION FAIRNESS ACT

5.1. No later than ten (10) days after Plaintiff Schipper's application for entry of the

Preliminary Approval Order, Settling Defendants shall comply with the requirements of 28

U.S.C. § 1715(b) and serve upon the appropriate State official of each State in which a

Settlement Class Member resides and the appropriate Federal official a notice of the proposed

Federal Settlement consisting of

(a) the original complaint and all amended complaints in Schipper;

(b) the Notice and the Summary Notice;

(c) this Settlement Agreement;

(d) the Preliminary Approval Order and the proposed Federal Judgment;

(e) (i) if feasible , the names of Settlement Class Members who reside in each

State and the estimated proportionate share of the claims of such

Settlement Class Members to the entire Federal Settlement to that State's

appropriate State official; or (ii) if the provision of information under sub-

paragraph (i) is not feasible, a reasonable estimate of the number of

Settlement Class Members residing in each State and the estimated

proportionate share of the claims of such Settlement Class Members to the

entire Federal Settlement; and

19

(f) any written judicial opinion relating to the materials described in

sub-paragraphs (b) through (e) hereof.

5.2. Settling Defendants shall also provide copies of the foregoing submissions to

Plaintiffs' counsel.

6. APPLICATION FOR ATTORNEYS' FEES AND EXPENSES

6.1. Subject to the terms and conditions of this Settlement Agreement, the Settling

Defendants will not oppose any application to the State Court by Plaintiffs' counsel for an award

of attorneys' fees and reimbursement of their reasonable out-of-pocket expenses up to

$3,500,000 (three million five hundred thousand dollars). TXU and the Director Defendants

shall have no responsibility to pay any portion of any such award, which shall be paid entirely by

EFH. EFH shall pay on its own behalf and for the benefit of the defendants in the Settled Actions

and Released Persons the attorneys' fees and expenses awarded to Plaintiffs' counsel in the

Settled Actions within five (5) business days after the State Court executes an order awarding

such fees and expenses. In the event that an award of fees and expenses to Plaintiffs' counsel is

reversed or modified on appeal, or in the event that the conditions in Paragraph 2.7 are not

satisfied in full or the Settlement Agreement is terminated in accordance with its terms,

Plaintiffs' counsel shall refund to EFH any advanced amount and all interest accrued or

accumulated thereon.

6.2. Except as provided herein, the Released Persons shall bear no other expenses,

costs, damages, or fees alleged or incurred by any of the Plaintiffs or by any of their attorneys,

experts, advisors, agents or representatives. The Settling Parties acknowledge that neither TXU

nor any member of the Board is required to make any monetary payments to Plaintiffs, Plaintiffs'

counsel or Sponsors in connection with the Settlements.

20

6.3. No application for an award of attorneys' fees or reimbursement of expenses shall

be made in any court other than the State Court.

7. MISCELLANEOUS PROVISIONS

7.1. This Settlement Agreement shall be governed by and construed in accordance

with the laws of the State of Texas , without regard to choice of law principles . The Settling

Parties agree that any dispute arising out of or relating in any way to this Settlement Agreement

shall not be litigated or otherwise pursued in any forum or venue other than the Federal Court or

the State Court, and the Settling Parties expressly waive any right to demand a jury trial as to any

such dispute.

7.2. This Settlement Agreement constitutes the entire agreement among the Settling

Parties with respect to its subject matter and supersedes any prior agreement or understanding

not in this Settlement Agreement. This Settlement Agreement may only be modified or

amended by a writing, signed by all of the Settling Parties hereto, that refers specifically to this

Settlement Agreement. There are no collateral or oral agreements between the parties that are

not stated herein.

7.3. The provisions contained in this Settlement Agreement shall not be deemed a.

presumption, concession, or admission by any Released Person of any fault, liability or

wrongdoing as to any facts or claims that have been or might be alleged or asserted in the Settled

Actions, or any other action or proceeding that has been, will be, or could be brought, and shall

not be interpreted, construed, deemed, invoked, offered, or received in evidence or otherwise

used by any person in the Settled Actions, or in any other action or proceeding, whether civil,

criminal or administrative, for any purpose other than as provided expressly herein.

7.4. The Settling Parties and their attorneys agree to cooperate fully with one another

in seeking court approval of this Settlement Agreement, and to use their best efforts to effect, as

21

promptly as practicable, the consummation of this Settlement Agreement and the dismissal of the

Actions with prejudice and without costs to any party, except as provided for herein.

7.5. Each of the attorneys executing this Settlement Agreement on behalf of one or

more parties warrants and represents that he or she has been duly authorized and empowered to

execute this Settlement Agreement on behalf of each such party and bind his or her clients

thereto. Plaintiffs' counsel warrants and represents that Plaintiffs are the only holders and

owners of the claims and causes of actions asserted in the Settled Actions and that none of

Plaintiffs' claims or causes of actions referred to in any complaint in the Settled Actions has been

assigned, encumbered, or transferred in any manner, in whole or in part.

7.6. The Settling Parties: (a) acknowledge that it is their intent to consummate this

Settlement Agreement, and (b) agree to cooperate to the extent reasonably necessary to

effectuate and implement all terms and conditions of this Settlement Agreement and to exercise

their best efforts to accomplish the foregoing terms and conditions of this Settlement Agreement.

7.7. The Settling Parties intend the Settlements to be a final and complete resolution of

all disputes between them with respect to the Settled Actions. The Settlements compromise

claims which are contested and shall not be deemed an admission by any Settling Party as to the

merits of any claim or defense. The Settling Parties agree that the Settlements were negotiated in

good faith by the Settling Parties, and reflect settlements that were reached voluntarily after

consultation with competent legal counsel. The Settling Parties reserve their right to rebut, in a

manner that such party determines to be appropriate, any contention made in any public forum

that the Settled Actions were brought or defended in bad faith or without a reasonable basis.

7.8. Neither this Settlement Agreement nor the Settlements contained therein, nor any

act performed or document executed pursuant to or in furtherance of this Settlement Agreement

22

or the Settlements: (a) is or maybe deemed to be or may be used as an admission of, or evidence

of, the validity or lack thereof of any Released Claim, or of any wrongdoing or liability of the

Released Persons or the propriety or lack thereof of class certification; or (b) is or may be

deemed to be or may be used as an admission of, or evidence of, any fault or omission of any of

the Released Persons in any civil, criminal or administrative proceeding in any court,

administrative agency or other tribunal. The Released Persons may file this Settlement

Agreement or the Judgments in any action that may be brought against them in order to support a

defense or counterclaim based on principles of res judicata, collateral estoppel, release, good

faith settlement, judgment bar or reduction or any other theory of claim preclusion or issue

preclusion or similar defense or counterclaim. If any Released Claims are asserted against any

Released Person in any court prior to final court approval of the Settlements, the Settling Parties

shall use their best efforts to affect a withdrawal or dismissal of the claims.

7.9. All of the Exhibits to this Settlement Agreement are material and integral parts

hereof and are fully incorporated herein by this reference.

7.10. This Settlement Agreement may be amended or modified only by a written

instrument signed by or on behalf of all Settling Parties or their respective successors-in-interest.

7.11. This Settlement Agreement and the Exhibits attached hereto constitute the entire

agreement among the parties hereto and no representations, warranties or inducements have been

made to any party concerning this Settlement Agreement or its Exhibits other than the

representations, warranties and covenants contained and memorialized in such documents. Each

of the Settling Parties acknowledges and agrees that he/she/it has not relied upon any

representations made by, or any alleged non-disclosures of, any other Settling Party in

connection with entering into this Settlement Agreement, except those representations expressly

23

stated herein, and hereby disclaims any reliance on any such alleged representations or non-

disclosures. Except as otherwise provided herein , each Settling Party shall bear his, her, or its

own costs.

7.12. Plaintiffs' counsel , on behalf of Plaintiffs and/or the Settlement Class, as the case

may be, are expressly authorized to take all appropriate actions required or permitted to be taken

by Plaintiffs and/or the Settlement Class, as the case may be, pursuant to this Settlement

Agreement to effectuate its terms and also are expressly authorized to enter into any

modifications or amendments to this Settlement Agreement which they deem appropriate.

7.13. This Settlement Agreement may be executed in one or more counterparts. All

executed counterparts and each of them shall be deemed to be one and the same instrument.

Facsimile signatures are deemed as original.

7.14. This Settlement Agreement shall be binding upon, and inure to the benefit of, the

successors and assigns of the parties hereto.

7.15. The Federal and State Courts shall retain jurisdiction with respect to

implementation and enforcement of the terms of this Settlement Agreement, and all parties

hereto submit to the jurisdiction of the Federal and State Courts for purposes of implementing

and enforcing the Settlements embodied in this Settlement Agreement.

IN WITNESS WHEREOF, the parties hereto have caused this Settlement Agreement to

be executed, by their duly authorized attorneys , dated as of January 7l, 2008.

24

WOLF HALDENSTEIN ADLERFREEMAN & HERZ LLP

C-Mark C. RifkinGregory M. NespoleGustavo Bruckner270 Madison AvenueNew York, New York 10016Telephone: (212) 545-4600Facsimile : (212) 545-4653

STANLEY, MANDEL & IOLA, L.L.P.

D,

Roger L. MandelMartin Woodward3100 Monticello Avenue, Suite 750Dallas, Texas 75205Telephone: (214) 443-4300Facsimile: (214) 443-0358

Attorneysfor PlaintiffSehipper

TXU CORP.

David P. Poole1601 Bryan St., 6th FloorDallas, Texas 75201

Attorney for TXU Corp.

25

WOLF HALDENSTEIN ADLERFREEMAN & HERZ LLP

Mark C. RifkinGregory M. NespoleGustavo Bruckner270 Madison AvenueNew York, New York 10016Telephone: (212) 545-4600Facsimile: (212) 545-4653

STANLEY, MANDEL & IOLA, L.L.P.

Roger L. MandelMartin Woodward3100 Monticello Avenue, Suite 750Dallas , Texas 75205Telephone: (214) 443-4300Facsimile : (214) 443-0358

Attorneys for PlaintiffSchipper

TXU CO

bavdp. Poole1601 Bryan St ., 6TH' FloorDallas , Texas 75201

Attorneyfor I'XU Corp.

25

DONOVAN SEARLES, LLC

Michael D. Donovan

1845 Walnut Street, Suite 1100Philadelphia, Pennsylvania 19103Telephone: (215) 732-6067Facsimile: (215) 732-8060

PAYNE MITCHELL LAW GROUP

James Mitchell2911 Turtle Creek Blvd., Suite 1400Dallas, Texas 75219Telephone: (214) 252-1888Facsimile: (214) 252-1889

Attorneysfor Plaintiff Goldmann

SIMPSON THACHER & BARTLETT LLP

Michael J. Chepiga

Peter E. Kazanoff425 Lexington AvenueNew York, New York 10017-3954Telephone: (212) 455-2000Facsimile: (212) 455-2502

VINSON & ELKINS LLP

K en L. Hirschman"

Jahn C. Wander3700 Trammell Crow Center

2001 Ross AvenueDallas, Texas 75201-2975Telephone: (214) 220-7770Facsimile: (214) 999-7770

Attorneys for Kohlberg Kravis Roberts & Co.

and Texas Pacific Group

26

DONOVAN SEARLES, LLC

Michael D. Donovan

1845 Walnut Street, Suite 1100Philadelphia , Pennsylvania 19103Telephone: (215) 732-6067Facsimile : (215) 732-8060

PAYNE MITCHELL LAW GROUP

James Mitchell2911 Turtle Creek Blvd., Suite 1400Dallas , Texas 75219Telephone: (214) 252-1888Facsimile : (214) 252-1889

Attorneys ,for Plaintiff Goldmann

SIMPSON THACIIER & BARTLETT LLP

47Michael J. ChepigaPeter E. Kazanoff425 Lexington Avenue

New York, New York 10017-3954Telephone: (212) 455-2000Facsimile: (212) 455-2502

VINSON & ELKINS LLP

Karen L. HirschmanJohn C. Wander3700 Trammell Crow Center2001 Ross AvenueDallas, Texas 75201-2975Telephone: (214) 220-7770Facsimile : (214) 999-7770

Attorneys.for Kohlberg Kravis Roberts & Co.and Texas Pacific Group

26

DONOVAN SEARLE^, LLC

Michael D. Donovan1845 Walnut Street, Suite I 100Philadelphia, Pennsylvania 19103Teleplhone: (215) 732-6067Facsimile: (215) 732-8060

-PAYN.E MITCHELL LAW GROUP

2911 Turtle Creek Blvd., Suite 1400Dallas, Texas 75219Telephone : (2 14) 252.1888Facsimile: (214) 252-1889

.(trorneys for Plaintl'Gelc niaiiir

SIMPSON Tl-:1ACHER & BAR"I'LETT I-1,P

Michael J. C.hepiga

Peter E. Kazanoff

425 Lexington AvenueNew York, Now York 10017-3954Telephortc : (212) 455-2000

Facsimile: (212) 455-2502

VINSON & ELKINS LLP

Karen L. HirschmanJohn C:. Wander

3700 Tranunell Crow Center2001 Ross AvenueDallas, Texas 75201-2975Telephone: (214) 220-7770Facsimile: (214) 999-7770

Afloi-ne}s fot-Kohrberg Kravis Roberts & Co.and Tecas Pacific Group

26

EXHIBIT A

IN THE UNITED STATES DISTRICT COURTNORTHERN DISTRICT OF TEXAS

DALLAS DIVISION

HARRY SCHIPPER, Individually and on ) CIVIL ACTION NO. 3-07CV1281-GBehalf of All Others Similarly Situated, )

Plaintiff, )

vs. )

TXU CORP., C. JOHN WILDER, JAMES )OESTERREICHER, KERNEY LADAY, SR.,)JACK LITTLE, GLENN TILTON, )LEONARD ROBERTS, E. GAIL DE )PLANQUE, LELDON E. ECIIOLS, )GERARDO LOPEZ, and MICHAEL )RANGER, )

Defendants

PRELIMINARY APPROVAL OF SETTLEMENT ANDI SCHEDULING ORDER

WHEREAS, the Settling Parties have entered into a Settlement Agreement dated

as of January _, 2008 (the "Agreement"") which sets forth the terms and conditions for the

Federal Settlement, and the Settling Parties have consented to the entry of this Order, upon

review and consideration of the Agreement,

IT IS ORDERED, this _ day of , 2008 , upon application of the

Settling Parties as follows:

The Court preliminary finds that the proposed Federal Settlement: (i) appears to

be the product of serious, infonned, non-collusive negotiations; (ii) has no obvious deficiencies;

(iii) does not improperly grant preferential treatment to Plaintiff Schipper or segments of the

Unless otherwise indicated, all capitalized terms are defined in the Agreement.

Settlement Class; (iv) falls within the range of possible approval; and (v) warrants notice to

Settlement Class Members of the Fairness Hearing, at which evidence may be presented in

support of and in opposition to the proposed Federal Settlement.

2. Solely for purposes of the Federal Settlement, and preliminarily for purposes of

this Order, this action shall be maintained as a class action pursuant to Federal Rule of Civil

Procedure 23(b)(1) and (b)(2) and subject to a final determination at or after the Fairness

Hearing. Plaintiff Schipper is appointed as representative of the Settlement Class, and his

counsel as Plaintiffs' lead counsel ("Lead Counsel").

3. The Fairness Hearing shall be held on , 2008, at - .m. in this

Court to determine whether the Agreement and the Federal Settlement are fair, reasonable,

adequate and in the best interests of the Settlement Class, whether this action should be finally

certified as a class action, whether the Agreement and the Federal Settlement should finally be

approved by the Court in a judgment entered thereon, whether the Federal Judgment dismissing

this action with prejudice and releasing the Released Claims should be entered, and to hear and

determine any objections to the Federal Settlement. The Court reserves the right to adjourn the

Fairness Hearing or any adjournment thereof without further notice to the Settlement Class other

than by announcement at the Fairness Hearing or any adjournment thereof.

4. Plaintiffs' counsel shall submit any papers in support of the Federal Settlement,

including any affidavits, declarations, deposition transcripts or other confirmatory discovery

materials which Plaintiffs' counsel believes may assist the Court in determining the fairness,

reasonableness and adequacy of the terms of the Federal Settlement, no fewer than twenty (20)

days before the date of the Fairness Hearing.

5. The Court reserves the right to approve the Federal Settlement at or after the

Fairness Hearing with such modifications as may be expressly consented to by the parties to the

2

Agreement and without further notice to the members of the Settlement Class, and will retain

jurisdiction over this action to consider all further applications arising out of or connected with

the Agreement.

6. The Court approves, in form and content, the Notice (attached to the Agreement

as Exhibit E) and the Summary Notice (attached to the Agreement as Exhibit F) and finds that

the giving of notice substantially in the manner set forth below meets the requirements of the

Constitution of the United States and all other applicable laws, is the best notice practicable

under the circumstances, and shall constitute due and sufficient notice of the matters set forth

therein for all purposes to all persons entitled to such notice.

7. No later than sixty (60) days prior to the Fairness Hearing, Plaintiff Schipper shall

cause the Notice to be mailed to record holders of the TXU common shares (the "Common

Shares") who are Settlement Class Members as shown on the stock records maintained by or on

behalf of TXU, by first-class mail (or international mail, if necessary), postage prepaid.

Furthermore, Plaintiff Schipper shall use reasonable efforts to give notice to beneficial holders of

the Common Shares of Settlement Class Members (i) by mailing additional copies of the Notice

to any record holder requesting the Notice for the purpose of distribution to any beneficial

holders of the Common Shares who are entitled to the Notice, or (ii) at the request of such record

holder, by mailing the Notice directly to such beneficial holders at the addresses provided by

such record holder.

8. No later than sixty (60) days prior to the Fairness Hearing, Plaintiff Schipper shall

cause the Summary Notice to be published one time each in the National Edition of The Wall

Street Journal and the Dallas Morning News.

9. Plaintiff Schipper shall, no later than five (5) business days before the date of the

Fairness Hearing, file with the Court proof of mailing of the Notice as required by Paragraph 7

and publication of the Summary Notice as required by Paragraph 8.

10. EFH shall pay all reasonable costs and expenses incurred in providing the Notice

and Summary Notice when and as billed by the Settlement Administrator, with the understanding

that notice shall be effected as set forth in Paragraphs 7 and 8.

11. Any Settlement Class Member who objects to the Agreement, the Federal

Settlement, the class action determination, the certification of the Settlement Class, the Federal

Judgment to be entered herein, or who otherwise wishes to be heard with respect to any or all of

the foregoing, may appear in person or by his, her or its attorney at the Fairness Hearing and

present any evidence or argument that may be proper and relevant; provided, however, that any

such objector must provide: (i) written notice of the intention to appear, (ii) a detailed statement

of each objection being made, (iii) all of the grounds therefor or the reasons for such persons

desiring to appear and to be heard, and (iv) proof of membership in the Settlement Class, as well

as all documents and writings which such person desires the Court to consider, to the Clerk of

the Court and, simultaneously with or before such filing, to the following counsel of record

fifteen (15) days before the date of the Fairness Hearing:

Roger L . MandelMartin WoodwardStanley, Mandel & Iola, L.L.P.3100 Monticello Avenue, Suite 750Dallas, Texas 75205Attorneysfor PlaintiffSchipper

David P. PooleTXU Corp.1601 Bryan St., 6`h FloorDallas , Texas 75201Attorneyfor TXU Corp.

4

John C. WanderVinson & Elkins LLP

3700 Trammell Crow Center2001 Ross Avenue

Dallas, TX 75201-2975Attorneys for Kohlberg Kravis Roberts & Co. and Texas Pacific Group

The Settling Parties shall file any response to any such objection no later than five (5) days

before the Fairness Hearing.

12. Any person who fails to object in the manner prescribed above shall be deemed to

have waived such objection and forever shall be barred from raising such objection or otherwise

contesting the Federal Settlement in this or any other action or proceeding.

13. Pending final determination of whether the Federal Settlement should be

approved, Plaintiff Schipper and all Settlement Class Members, and any of them, are barred and

enjoined from commencing , prosecuting , instigating or in any way participating in the

commencement or prosecution of any action asserting any Released Claims, either directly,

representatively, derivatively or in any other capacity, against any Released Person.

14. If the Federal Settlement provided for in the Agreement is approved by the Court

following the Fairness Hearing, the Federal Judgment shall be entered.

15. In the event that the conditions in Paragraph 2.7 of the Agreement are not

satisfied in full or the Settlement Agreement is terminated in accordance with its terms, the

Agreement shall be null and void and of no force or effect and the Settling Parties shall be

restored to their respective positions in the Federal Action as of July 22, 2007, unless otherwise

agreed to by the Settling Parties pursuant to Paragraph 2.8 of the Agreement. In such event, (i)

the existence of this Settlement Agreement, its contents, and the negotiations leading to it (a)

shall have no further force and effect with respect to the Settling Parties, and (b) shall not be

admissible in evidence, nor referred to for any purpose, in the Settled Actions or in any other

litigation or proceeding, and (ii) any judgment or order entered by any court in accordance with

5

the terms of the Agreement shall be treated as vacated, nunc pro tunc. Settling Defendants

reserve the right to oppose certification of any class in future proceedings in such event and

further reserve all other rights and defenses that Settling Defendants could have raised had the

Federal Settlement not been entered into by the Settling Parties.

16. The Agreement shall not be deemed a presumption , concession, or admission by

any Released Person of any fault, liability or wrongdoing as to any facts or claims that have been

or might be alleged or asserted in the Settled Actions, or any other action or proceeding that has

been, will be, or could be brought, and shall not be interpreted, construed, deemed, invoked,

offered, or received in evidence or otherwise used by any person in the Settled Actions, or in any

other action or proceeding, whether civil, criminal or administrative, for any purpose other than

as provided expressly herein.

IT IS SO ORDERED

This day of 2008.

Judge [

6

EXHIBIT B

IN THE UNITED STATES DISTRICT COURTNORTHERN DISTRICT OF TEXAS

DALLAS DIVISION

HARRY SCHIPPER, Individually and on ) CIVIL ACTION NO. 3-07CVI28I-GBehalf of All Others Similarly Situated, )

)Plaintiff, )

vs. )

TXU CORP., C. JOHN WILDER, JAMES )OESTERREICHER, KERNEY LADAY, SR.,)JACK LITTLE, GLENN TILTON, )LEONARD ROBERTS, E. GAIL DE )PLANQUE, LELDON E. ECHOLS, )GERARDO LOPEZ, and MICHAEL )RANGER, )

Defendants.

FINAL ORDER AND JUDGMENT

Pursuant to the Settlement Agreement dated as of January -, 2008 (the

"Agreement" ') and the Preliminary Approval of Settlement and Scheduling Order ("Scheduling

Order") entered in accordance therewith, a hearing was held before this Court on

2008, due and proper notice of said hearing having been given in

accordance with the Scheduling Order; the respective parties having appeared by their attorneys

of record; the Court having heard and considered the submission and evidence presented in

support of the proposed Federal Settlement and any opposition thereto; the attorneys for the

respective parties having been heard; an opportunity to be heard having been given to all other

persons requesting to be heard in accordance with the Agreement and Scheduling Order; the

Unless otherwise indicated, all capitalized terms retain the meanings assigned in theAgreement.

Court having determined that notice to the Settlement Class pursuant to the Scheduling Order

was proper, adequate and sufficient; the Court having considered, among other matters, the

benefits of the proposed Federal Settlement to the Settlement Class and the risks, complexity,

expense and probable duration of further litigation; and the entire matter of the proposed Federal

Settlement having been heard and considered by the Court;

IT IS HEREBY ORDERED, ADJUDGED AND DECREED this

day of_ , 2008 that:

1. The Notice and the Summary Notice have been given to the Settlement Class

pursuant to and in the manner directed by the Scheduling Order, proof of mailing of the Notice

and publication of the Summary Notice was filed with the Court by counsel for Plaintiff

Schipper and full opportunity to be heard has been offered to all parties, the Settlement Class and

persons in interest. The form and manner of the Notice and the Summary Notice are hereby

determined to have been the best notice practicable under the circumstances and to have fully

complied with each of the requirements of the Constitution of the United States and any other

applicable law and constitutes due and sufficient notice to all persons entitled thereto, and it is

further determined that all members of the Settlement Class are bound by the Federal Judgment

herein.

2. The Court finds that the requirements of Federal Rule of Civil Procedure 23 have

been satisfied. Accordingly, pursuant to Federal Rule of Civil Procedure 23:

a. the Court specifically finds that (i) the Settlement Class is so numerous

that joinder of all members is impracticable, (ii) there are questions of law and fact common to

the Settlement Class, (iii) the claims of Plaintiff Schipper are typical of the claims of the

Settlement Class, and (iv) Plaintiff Schipper will fairly and adequately protect the interests of the

Settlement Class;

2

b. the Court finds that final injunctive or corresponding declaratory relief is

appropriate since the parties opposing the Settlement Class acted or refused to act on grounds

generally applicable to the Settlement Class;

the Court finds that Plaintiff Schipper and Plaintiffs' counsel ("Lead

Counsel") have adequately represented the interests of the Settlement Class with respect to this

action and the claims asserted herein;

d. this action is hereby certified, for purposes of the Federal Settlement only,

as a class action on behalf of a nonopt out class consisting of all members of the Settlement

Class; and

C. Plaintiff Schipper is hereby certified as representative of the Settlement

Class, and his counsel certified as Lead Counsel.

3. The Court finds and concludes that the Federal Settlement is fair, reasonable and

adequate and in the best interests of the Settlement Class, and hereby approves the Federal

Settlement and all transactions preliminary or incident thereto. The parties to the Agreement are

hereby authorized and directed to comply with and to consummate the Federal Settlement in

accordance with its terms and provisions; and the Clerk of Court is directed to enter and docket

this Federal Judgment in this action.

4. This Federal Judgment shall not be deemed a presumption, concession, or

admission by any Released Person of any fault, liability or wrongdoing as to any facts or claims

that have been or might be alleged or asserted in the Settled Actions, or any other action or

proceeding that has been, will be, or could be brought, and shall not be interpreted, construed,

deemed, invoked, offered, or received in evidence or otherwise used by any person in the Settled

Actions, or in any other action or proceeding, whether civil, criminal or administrative, for any

purpose other than as provided expressly herein.

3

5. In the event that the Federal Settlement fails to become effective in accordance

with its terms, or if the terms of this Federal Judgment are reversed, vacated, or materially

modified on appeal (and, in the event of material modification, if any party elects to terminate

the Federal Settlement), this Federal Judgment (except this Paragraph) shall be null and void, the

Federal Settlement shall be deemed terminated and the parties shall return to their positions as

provided for in the Agreement.

6. Plaintiff Schipper and each of the Settlement Class Members shall be deemed to

have, and by operation of this Federal Judgment shall have, fully, finally, and forever released,

relinquished and discharged all Released Claims (including claims that Plaintiff Schipper and

each of the Settlement Class Members do not know or suspect to exist at the time of the release,

which if known, might have affected such party' s decision to enter into the release) against the

Released Persons. By operation of the entry of this Federal Judgment, Plaintiff Schipper and the

Settlement Class Members, for themselves and their respective heirs, executors, administrators,

predecessors, representatives, agents, successors, and assigns, agree to waive and shall be

deemed to have waived any and all provisions, rights and benefits which they now have, or in the

future may have by virtue of the provisions of § 1542 of the California Civil Code and any other

similar, comparable or equivalent law or provision with respect to the Released Claims, which

section provides as follows: "A general release does not extend to claims which the creditor

does not know or suspect to exist in his favor at the time of executing the release, which if

known by him must have materially affected his settlement with the debtor."

The Settling Defendants mailed notices of the Federal Settlement to the

appropriate federal and state officials pursuant to the Class Action Fairness Act ("CAFA"). The

CAFA notices fully comply with 28 U.S.C. § 1715 and were timely served.

4

8. This Federal Judgment will permanently bar and enjoin the institution and

prosecution by Plaintiff Schipper and any Settlement Class Members of any action against any

Released Person in any court asserting any Released Claims.

9. Upon the Effective Date, each of the Released Persons shall be deemed to have,

and by operation of this Federal Judgment shall have, fully, finally, and forever released,

relinquished and discharged Plaintiff Schipper, each and all of the Settlement Class Members,

and Plaintiffs' counsel in the Settled Actions from any and all claims, based upon or arising out

of the institution, prosecution, assertion, settlement or resolution of the actions or the Released

Claims.

10. This action is hereby dismissed with prejudice against the Released Persons, with

each party to bear its own costs and fees.

11. Without affecting the finality of this Federal Judgment, the Court reserves

jurisdiction of any matters relating to the consummation and administration of the Federal

Settlement.

IT IS SO ORDERED

This day of , 2008.

Judge [ I

5

EXHIBIT C

CAUSE NO. 07-01779

IN THE DISTRICT COURT OFIn re TXU Corp. Derivative Litigation DALLAS COUNTY, TEXAS

44th JUDICIAL DISTRICT

[PRELIMINARY APPROVAL OF SETTLEMENT AND] SCHEDULING ORDER

WHEREAS, the Settling Parties have entered into a Settlement Agreement dated

as of January _, 2008 (the "Agreement"') which sets forth the tenns and conditions for the State

Settlement, and the Settling Parties have consented to the entry of this Order, upon review and

consideration of the Agreement,

IT IS ORDERED, this day of , 2008, upon application of the

Settling Parties as follows:

The Court preliminary finds that the proposed State Settlement : (i) appears to be

the product of serious, informed, non-collusive negotiations ; (ii) has no obvious deficiencies; (iii)

does not improperly grant preferential treatment to Plaintiff Goldmann or TXU Shareholders;

(iv) falls within the range of possible approval ; and (v) warrants notice to TXU Shareholders of

the Settlement Hearing, at which evidence may be presented in support of and in opposition to

the proposed State Settlement.

2. The Settlement Hearing shall be held on , 2008 , at .m. in this

Court to determine, inter alia, whether the Agreement and the State Settlement are fair,

reasonable, adequate and in the best interests of TXU and TXU Shareholders, whether the

Agreement and the State Settlement should finally be approved by the Court in a judgment

entered thereon, whether the State Judgment dismissing this action with prejudice and releasing

Unless otherwise indicated, all capitalized terms are defined in the Agreement.

the Released Claims should be entered, whether any application by Lead Counsel for fees and

reimbursement of out-of-pocket expenses (the "Fee Application") should be approved and to

hear and determine any objections to the State Settlement or to the Fee Application. The Court

reserves the right to adjourn the Settlement Hearing or any adjournment thereof without further

notice to TXU Shareholders other than by announcement at the Settlement Hearing or any

adjournment thereof.

3. Plaintiff Goldmann's counsel shall submit any papers in support of the Fee

Application, including any affidavits, declarations , deposition transcripts or other materials

which Plaintiffs' counsel believes may assist the Court in determining the fairness and

reasonableness of the Fee Application, and the State Settlement, including any affidavits,

declarations, deposition transcripts or other confirmatory discovery materials which Plaintiff

Goldmann's counsel believes may assist the Court in determining the fairness, reasonableness

and adequacy of the terms of the State Settlement, no fewer than twenty (20) days before the date

of the Settlement Hearing.

4. The Court reserves the right to approve the State Settlement at or after the

Settlement Hearing with such modifications as may be expressly consented to by the parties to

the Agreement and without further notice to TXU Shareholders, and will retain jurisdiction over

this action to consider all further applications arising out of or connected with the Agreement.

The Court approves, in form and content, the Notice (attached to the Agreement

as Exhibit E) and the Summary Notice (attached to the Agreement as Exhibit F) and finds that

the giving of notice substantially in the manner set forth below meets the requirements of the

Constitutions of the United States and the State of Texas, Texas Business Organizations Code

21.560(b) and all other applicable laws, is the best notice practicable under the circumstances,

2

and shall constitute due and sufficient notice of the matters set forth therein for all purposes to all

persons entitled to such notice.

6. No later than sixty (60) days prior to the Settlement Hearing, Plaintiff Goldmann

shall cause the Notice to be mailed to TXU Shareholders (as shown on the stock records

maintained by or on behalf ofTXU) by first-class mail (or international mail, if necessary),

postage prepaid . Furthermore , Plaintiff Goldmann shall use reasonable efforts to give notice to

beneficial holders of'l'XU Shareholders ' common shares (i) by mailing additional copies of the

Notice to any record holder requesting the Notice for the purpose of distribution to any beneficial

holders of TXU Shareholders ' common shares who are entitled to the Notice , or (ii) at the

request of such record holder, by mailing the Notice directly to such beneficial holders at the

addresses provided by such record holder.

7. No later than sixty (60) days prior to the Settlement Hearing, Plaintiff Goldmann

shall cause the Summary Notice to be published one time each in the National Edition of The

Wall Street Journal and the Dallas Morning News.

Plaintiff Goldmann shall, no later than five (5) business days before the date of

the Settlement Hearing, file with the Court proof of mailing of the Notice as required by

Paragraph 6 and publication of the Summary Notice as required by Paragraph 7.

9. EFH shall pay all reasonable costs and expenses incurred in providing the Notice

and Summary Notice when and as billed by the Settlement Administrator, with the understanding

that notice shall be effected as set forth in Paragraphs 6 and 7.

10. Any TXU Shareholder who objects to the Agreement, the State Settlement, the

State Judgment to be entered herein, the Fee Application, or who otherwise wishes to be heard

with respect to any or all of the foregoing , may appear in person or by his or her or its attorney at

the Settlement Hearing and present any evidence or argument that may be proper and relevant;

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provided, however, that any such objector must provide: (i) written notice of the intention to

appear, (ii) a detailed statement of each objection being made, (iii) all of the grounds therefor or

the reasons for such persons desiring to appear and to be heard, and (iv) proof of being a TXU

Shareholder, as well as all documents and writings which such person desires the Court to

consider, to the Clerk of the Court and, simultaneously with or before such filing, to the

following counsel of record fifteen (15) days before the date of the Settlement Hearing:

Michael D. Donovan

Donovan Searles, LLC

1845 Walnut Street , Suite 1100

Philadelphia , Pennsylvania 19103

Attorneysfor Plaintiff Goldmann

David P. PooleTXU Corp.1601 Bryan St., 6`h Floor

Dallas, Texas 75201Attorneyfor TXU Corp.

John C. Wander

Vinson & Elkins LLP3700 Trammell Crow Center

2001 Ross Avenue

Dallas, Texas 75201-2975Attorneys for Kohlberg Kravis Roberts

& Co. and Texas Pacific Group

The Settling Parties shall file any response to any such objection no later than five (5) days

before the Settlement Hearing.

11. Any person who fails to object in the manner prescribed above shall be deemed to

have waived such objection and forever shall be barred from raising such objection or otherwise

contesting the State Settlement in this or any other action or proceeding.

12. Pending final determination of whether the State Settlement should be approved,

Plaintiff Goldmann and all TXU Shareholders, and any of them, are barred and enjoined from

commencing, prosecuting , instigating or in any way participating in the commencement or

4

prosecution of any action asserting any Released Claims, either directly, representatively,

derivatively or in any other capacity, against any Released Person.

13. If the State Settlement provided for in the Agreement is approved by the Court

following the Settlement Hearing, the State Judgment shall be entered.

14. In the event that the conditions in Paragraph 2.7 of the Agreement are not

satisfied in full or the Settlement Agreement is terminated in accordance with its terms, the

Agreement shall be null and void and of no force or effect and the Settling Parties shall be

restored to their respective positions in the State Action as of July 22, 2007, unless otherwise

agreed to by the Settling Parties pursuant to Paragraph 2.8 of the Agreement. In such event, (i)

the existence of this Settlement Agreement, its contents, and the negotiations leading to it (a)

shall have no further force and effect with respect to the Settling Parties, and (b) shall not be

admissible in evidence, nor referred to for any purpose, in this action or in any other litigation or

proceeding, and (ii) any judgment or order entered by any court in accordance with the terms of

the Agreement shall be treated as vacated, nunc pro tune. Settling Defendants reserve the right

to oppose certification of any class in future proceedings in such event and further reserve all

other rights and defenses that Settling Defendants could have raised had the State Settlement not

been entered into by the Settling Parties.

15. The Agreement shall not be deemed a presumption, concession, or admission by

any Released Person of any fault, liability or wrongdoing as to any facts or claims that have been

or might be alleged or asserted in this action, or any other action or proceeding that has been,

will be, or could be brought, and shall not be interpreted, construed, deemed, invoked, offered, or

received in evidence or otherwise used by any person in the this action, or in any other action or

proceeding, whether civil, criminal or administrative, for any purpose other than as provided

expressly herein.

IT IS SO ORDERED

This day of 92008.

Judge [

EXHIBIT D

CAUSE NO. 07-01779

IN THE DISTRICT COURT OF

In re TXU Corp . Derivative Litigation DALLAS COUNTY, TEXAS

44`h JUDICIAL DISTRICT

FINAL ORDER AND JUDGMENT

Pursuant to the Settlement Agreement dated as of January __, 2008 (the

"Agreement"') and the Scheduling Order entered in accordance therewith, a hearing was held

before this Court on , 2008, due and proper notice of said hearing having

been given in accordance with the Scheduling Order; the respective parties having appeared by

their attorneys of record; the Court having heard and considered the submission and evidence

presented in support of the proposed State Settlement and any opposition thereto; the attorneys

for the respective parties having been heard; an opportunity to be heard having been given to all

other persons requesting to be heard in accordance with the Agreement and Scheduling Order;

the Court having determined that notice to TXU Shareholders pursuant to the Scheduling Order

was proper, adequate and sufficient; the Court having considered, among other matters, the

benefits of the proposed State Settlement to TXU Shareholders and the risks, complexity,

expense and probable duration of further litigation; and the entire matter of the proposed State

Settlement having been heard and considered by the Court;

IT IS HEREBY ORDERED, ADJUDGED AND DECREED this

day of , 2008 that:

The Notice and the Summary Notice have been given to TXU Shareholders,

pursuant to and in the manner directed by the Scheduling Order, proof of mailing of the Notice

Unless otherwise indicated, all capitalized terms retain the meanings assigned in theAgreement.

and publication of the Summary Notice was filed with the Court by counsel for Plaintiff

Goldmann and full opportunity to be heard has been offered to all parties , TXU Shareholders and

persons in interest . The form and manner of the Notice and the Summary Notice are hereby

detennined to have been the best notice practicable under the circumstances and to have fully

complied with each of the requirements of the Constitutions of the United States and the State of

Texas , Texas Business Organizations Code 21 . 560(b) and all other applicable laws, and

constitutes due and sufficient notice to all persons entitled thereto , and it is further determined

that all TXU Shareholders are bound by the State Judgment herein.

3. The Court finds and concludes that the State Settlement is fair, reasonable and

adequate and in the best interests of TXU and TXU Shareholders , and hereby approves the State

Settlement and all transactions preliminary or incident thereto. The Court further finds and

concludes that Plaintiffs Walter and Rita Goldmann were TXU shareholders at all relevant times.

The parties to the Agreement are hereby authorized and directed to comply with and to

consummate the State Settlement in accordance with its terms and provision; and the Clerk of

Court is directed to enter and docket this State Judgment in this action.

4. This State Judgment shall not be deemed a presumption , concession, or admission

by any Released Person of any fault, liability or wrongdoing as to any facts or claims that have

been or might be alleged or asserted in the Settled Actions, or any other action or proceeding that

has been, will be, or could be brought, and shall not be interpreted , construed, deemed, invoked,

offered, or received in evidence or otherwise used by any person in the Settled Actions, or in any

other action or proceeding , whether civil , criminal or administrative , for any purpose other than

as provided expressly herein.

5. In the event that the State Settlement fails to become effective in accordance with

its teens , or if the terms of this State Judgment are reversed, vacated , or materially modified on

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appeal (and, in the event of material modification, if any party elects to terminate the State

Settlement), this State Judgment (except this Paragraph) shall be null and void, the State

Settlement shall be deemed terminated and the parties shall return to their positions as provided

for in the Agreement.

6. Plaintiff Goldmann and each TXU Shareholder shall be deemed to have, and by

operation of this State Judgment shall have , fully, finally , and forever released , relinquished and

discharged all Released Claims (including claims that Plaintiff Goldmann and each of the TXU

Shareholders do not know or suspect to exist at the time of the release, which if known, might

have affected such party's decision to enter into the release) against the Released Persons. By

operation of the entry of this State Judgment, Plaintiff Goldmann and the TXU Shareholders, for

themselves and their respective heirs, executors, administrators, predecessors, representatives,

agents, successors, and assigns , agree to waive and shall be deemed to have waived any and all

provisions, rights and benefits which they now have, or in the future may have by virtue of the

provisions of § 1542 of the California Civil Code and any other similar, comparable or

equivalent law or provision with respect to the Released Claims, which section provides as

follows: A general release does not extend to claims which the creditor does not know or

suspect to exist in his favor at the time of executing the release, which if known by him must

have materially affected his settlement with the debtor.

7. This State Judgment will permanently bar and enjoin the institution and

prosecution by Plaintiff Goldmann and any TXU Shareholder of any action against any Released

Person in any court asserting any Released Claims.

8. Upon the Effective Date, each of the Released Persons shall be deemed to have,

and by operation of this State Judgment shall have, fully, finally, and forever released,

relinquished and discharged Plaintiff Goldmann, each and all of the TXU Shareholders, and

Plaintiffs' counsel in the Settled Actions from any and all claims, based upon or arising out of

the institution, prosecution, assertion, settlement or resolution of the actions or the Released

Claims.

9. Plaintiffs' counsel are hereby awarded in fees and expenses.

EFH shall pay on its own behalf and for the benefit of the other defendants in the Settled Actions

and Released Persons the attorneys' fees and expenses awarded to Plaintiffs' counsel in the

Settled Actions within five (5) business days as provided in the Settlement Agreement. The

award of attorneys' fees shall be allocated among Plaintiffs' counsel in a fashion which, in the

opinion of Plaintiffs' lead counsel, fairly compensates Plaintiffs' counsel for their respective

contributions to the prosecution and settlement of the Actions. In the event that an award of fees

and expenses to Plaintiffs' counsel is reversed or modified on appeal, or in the event that the

conditions in Paragraph 2.7 of the Settlement Agreement are not satisfied in full or the settlement

set forth in the Settlement Agreement is terminated in accordance with its terms, Plaintiffs'

counsel shall refund to EFH any advanced amount and all interest accrued or accumulated

thereon.

10. This action is hereby dismissed with prejudice against the Released Persons, with

each party to bear its own costs and fees , except as determined in connection with the fee

application above.

11. Without affecting the finality of this State Judgment, the Court reserves

jurisdiction of any matters relating to the consummation and administration of the State

Settlement.

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IT IS SO ORDERED

This day of , 2008.

Judge

EXHIBIT E

IN THE UNITED STATES DISTRICT COURTNORTHERN DISTRICT OF TEXAS

DALLAS DIVISION

Harry Schipper, Individually and on Behalf

of All Others Similarly Situated,

Plaintiff,V.

TXU CORP., C. JOHN WILDER, JAMESOESTERREICHER, KERNEY LADAY, SR.,JACK LITTLE, GLENN TILTON, LEONARDROBERTS, E. GAIL DE PLANQUE,LELDON E. ECHOLS, GERARDO LOPEZ,and MICHAEL RANGER,

CIVIL ACTION NO. 3-07CV1281-G

Defendants.

CAUSE NO. 07-01779

In re TXU Corp. Derivative Litigation

§ IN THE DISTRICT COURT OF§ DALLAS COUNTY, TEXAS

44TH JUDICIAL DISTRICT

NOTICE TO CLASS MEMBERS AND TXU SHAREHOLDERS OFPROPOSED SETTLEMENT OF CLASS ACTION AND DERIVATIVE ACTION

TO: ALL PERSONS WHO HELD TXU CORP. ("TXU") COMMON STOCK AT ANYTIME FROM NOVEMBER 27, 2006, TO OCTOBER 10, 2007 (THE "TXUSHAREHOLDERS").

PLEASE READ THIS NOTICE CAREFULLY AND IN ITS ENTIRETY. YOURRIGHTS WILL BE AFFECTED BY THESE LEGAL PROCEEDINGS. IF THECOURT APPROVES THE PROPOSED SETTLEMENT, YOU WILL BEFOREVER BARRED FROM CONTESTING THE FAIRNESS,REASONABLENESS AND ADEQUACY OF THE PROPOSED SETTLEMENTAND RELATED MATTERS, AND FROM PURSUING THE RELEASEDCLAIMS (AS DEFINED HEREIN).

IF YOU HELD TXU COMMON STOCK FOR THE BENEFIT OF ANOTHER,PLEASE PROMPTLY TRANSMIT THIS DOCUMENT TO SUCH BENEFICIALOWNER.

Notice is hereby given to you of a Proposed Settlement in the above entitled and

numbered lawsuits. This Notice is sent to you by orders of the United States District Court for

the Northern District of Texas, Dallas Division, ("the Federal Court") and the 44th Judicial

District Court of Dallas County, Texas ("the State Court") (collectively the "Courts"). It is not

an expression of any opinion by either of the Courts. It is to notify you of the terms of a

Proposed Settlement of both actions.

1. WHY YOU HAVE RECEIVED THIS NOTICE

You received this Notice to Class Members and TXU Shareholders of Proposed

Settlement of Class Action and Derivative Action (the "Notice") because you have been

identified as a member of the Settlement Class (which is defined in Part II below) in a lawsuit

styled Harry Schipper, Individually and on Behalf of All Others Similarly Situated, v. TXU

Corp., C. John Wilder, James Oesterreicher, Kerney Laday, Dr., Jack Little, Glenn Tilton,

Leonard Roberts, E. Gail De Planque, Leldon E. Echols, Gerardo Lopez, and Michael Ranger,

pending in the Federal Court (the "Class Action") and/or as a TXU Shareholder affected by the

settlement of a derivative action styled In re TXU Corp. Derivative Litigation, Consolidated

Cause No. 07-01779, pending in the State Court (the "Derivative Action"). The Proposed

Settlement arises from the agreement and plan of merger (the "Merger Agreement") whereby an

acquisition entity formed by Kohlberg Kravis Roberts & Co. and Texas Pacific Group

(collectively, "the Sponsors"), along with certain financial institutions, agreed to acquire TXU by

paying $69.25 per share for all of the outstanding shares of common stock of TXU (the

"Proposed Acquisition").

Plaintiff Harry Schipper, individually and on behalf of all Settlement Class

Members ("Plaintiff Schipper"), and Plaintiffs Walter and Rita Goldmann, individually and

derivatively on behalf of TXU (collectively, "Plaintiff Goldmann" and, along with Plaintiff

2

Schipper, "Plaintiffs "), and the Sponsors and TXU (collectively the "Settling Defendants" and

together with plaintiffs, the "Settling Parties") have agreed upon terms to settle the Class Action

and the Derivative Action (collectively, the "Settled Actions") and have signed a written

settlement agreement (the "Settlement Agreement") setting forth those settlement terms (the

"Proposed Settlement").

On the - day of , 2008, at- .in., the Federal Court will hold a hearing (the

"Fairness Hearing") to consider whether to finally approve the Proposed Settlement, and on the

day of 2008, at ___ _.m., the State Court will hold a hearing (the "Settlement

Hearing") to consider whether to dismiss the Derivative Action pursuant to the Proposed

Settlement.

II. DESCRIPTION OF TXU SHAREHOLDERS AND THE SETTLEMENT CLASS

If you received this Notice, then you have been identified as a TXU Shareholder and/or a

member of the Settlement Class (a "Settlement Class Member"). All persons who held TXU

common stock at any time from November 27, 2006 to October 10, 2007 are defined as TXU

Shareholders. The Settlement Class consists of all holders of TXU common stock at any time

from February 23, 2007, through and including October 10, 2007, other than Defendants,

members of the immediate family of any such Defendant, any entity in which such a Defendant

has or had a controlling interest, officers of TXU, and their legal representatives, agents,

executors, heirs, successors or assigns of any such excluded person.

III. SUMMARY OF THE LITIGATION

On February 26, 2007, TXU announced that its Board had unanimously approved the

Merger Agreement providing for the Proposed Acquisition.

Between February 27, 2007, and March 20, 2007, three derivative actions were filed in

state district courts in Dallas County, Texas, on behalf of TXU against the Sponsors, the

3

directors of TXU and various financial institutions alleging that those Defendants breached their

fiduciary duties, or aided and abetted other Defendants' breaches of their fiduciary duties, by

failing to conduct a proper sale process in connection with the Proposed Acquisition and to

obtain adequate consideration for TXU' s shareholders . On March 26, 2007, these actions were

consolidated into the Derivative Action in the State Court.

On May 18, 2007, the State Court stayed the Derivative Action so that a Derivative

Demand Committee appointed by TXU' s Board could investigate the allegations asserted in the

Derivative Action and in similar derivative actions filed in Federal Court. On July 18, 2007, the

Derivative Demand Committee filed a motion in the State Court to extend the stay of the

Derivative Action, which motion is still pending.

Between March 5, 2007, and March 8, 2007, three derivative actions were filed in federal

court in Dallas making claims similar to those asserted in the Derivative Action. On March 27,

2007, the defendants moved to dismiss those actions , which motions are still pending. These

federal derivative actions will be dismissed pursuant to the Proposed Settlement.

Between February 25, 2007, and March 7, 2007, eight shareholder class actions were

filed in state district courts in Dallas County, Texas, against the Sponsors, the directors of TXU

and various financial institutions alleging that those Defendants breached their fiduciary duties,

or aided and abetted other Defendants' breaches of their fiduciary duties, by failing to conduct a

proper sales process in connection with the Proposed Acquisition and to obtain adequate

consideration for TXU's shareholders. On March 26, 2007, those actions were consolidated in

the State Court. On May 25, 2007, the State Court dismissed those class actions. On May 31,

2007, the plaintiffs in the state class actions filed a motion for reconsideration and new trial. On

July 25, 2007, in connection with the Proposed Settlement , the plaintiffs in the state class actions

withdrew the motion for reconsideration and new trial. They did not subsequently appeal.

4

On June 14, 2007, TXU filed a preliminary proxy statement with the Securities and

Exchange Commission ("SEC") relating to a shareholder vote on the Merger Agreement ("the

Preliminary Proxy Statement"). After reviewing the Preliminary Proxy Statement and certain

documents produced by the Settling Defendants, counsel for Plaintiff Schipper in the Class

Action and counsel for Plaintiff Goldmann in the Derivative Action jointly wrote to counsel for

the Sponsors on July 13, 2007, setting forth terms upon which Plaintiffs would consider a

settlement of claims arising from the Merger (the "Settlement Demand Letter").

On July 19, 2007, the Class Action was filed against TXU and its directors on behalf of

TXU's common shareholders alleging that the Preliminary Proxy Statement contains material

misrepresentations and omissions in violation of the Federal Securities laws. Counsel for

Plaintiffs and counsel for the Sponsors engaged in extensive negotiations based on the

Settlement Demand Letter, pursuant to which the Sponsors agreed, subject to TXU's approval,

to: (1) make supplemental disclosures to TXU Shareholders, and (2) modify the Termination Fee

(as that teen is defined in the Merger Agreement). TXU subsequently agreed to these terms.

Consequently, on July 23, 2007, the Settlement Parties reached an agreement in principle

providing for the settlement of the Class Action and the Derivative Action and dismissal of the

federal derivative actions, subject to Plaintiffs conducting discovery concerning the fairness,

reasonableness and adequacy of the Proposed Settlement . On July 25, 2007, TXU filed a

definitive proxy statement which set September 7, 2007, as the date for the shareholder vote on

the Merger Agreement and which included certain disclosures requested by Plaintiffs in the

Settlement Demand Letter (the "Definitive Proxy Statement"). On September 7, 2007, the

shareholders of TXU approved the Merger. On October 10, 2007, the Merger was

consummated.

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IV. WHO ARE DERIVATIVE COUNSEL

Derivative Counsel are the attorneys who represent Plaintiff Goldmann in the Derivative

Action. The law fines Donovan Searles, LLC and Payne Mitchell Law Group are the Derivative

Counsel.

V. WHO ARE CLASS COUNSEL

Class Counsel are the attorneys who represent the interests of the Settlement Class as a

whole, which includes members of the Settlement Class. Plaintiff Schipper's counsel are the

Class Counsel: the law firms of Wolf Haldenstein Adler Freeman & Hertz LLP and Stanley,

Mandel & Iola, L.L. P. Class Counsel are obligated to represent you, but they are not permitted

to represent the interests of an individual Settlement Class Member in a way that adversely

effects the Settlement Class as a whole. You may seek the advice of your own private attorney,

at your own expense, if you desire.

VI. BENEFITS OF THE PROPOSED SETTLEMENT

A. The Disclosures.

The Settling Defendants agreed to, and did, include in the Definitive Proxy Statement the

following disclosures requested in the Settlement Demand Letter:

1. Information detailing whether members of the Sponsors or their management and

TXU's Board or management had any material , pre-existing relationships , including joint board

service or business relationships, which allowed shareholders to assess potential conflicts of

interest in the transaction.

2. Infonnation concerning TXU's and the Sponsors' efforts to garner support for the

Merger from both the environmental lobby and the Legislature.

3. Information pertaining to TXU's future environmental efforts.

4. Information pertaining to the "go-shop" process, which allowed shareholders to

6

evaluate the effectiveness of the process.

5. Information detailing how TXU' s financial advisor concluded that the discount

rates and other financial metrics it employed were accurate and appropriate relative to its

analysis of TXU's weighted average cost of capital and internal rates of return, which allowed

shareholders to evaluate the reasonableness of the analysis.

6. Information pertaining to changes to the opinion of the financial advisor since the

date of the Merger Agreement based on subsequent earnings announcements, modifications to

projections, or changes in assumptions stemming from either financial, global, industry specific,

or company specific occurrences.

7. Information pertaining to the actions taken by the Derivative Demand Committee

in response to the litigation and claims asserted therein , including the demand made on the TXU

Board.

B. The Reduction in the Termination Fee.

Notwithstanding Section 8.5(b) of the Merger Agreement, the Termination Fee would

have been in the amount of $1,000,000,000.00 (one billion dollars) if the Termination Fee had

become payable in connection with a termination pursuant to Section 8.4(a) of the Merger

Agreement that was not made in respect of a Superior Proposal (as that term is defined in the

Merger Agreement), but otherwise, as a result of the Proposed Settlement, the Termination Fee

would have been an amount equal to $925,000,000.00 (nine hundred twenty five million dollars).

VIL REASONS FOR THE SETTLEMENT

Counsel for the Settling Parties believe that the Proposed Settlement is in the best

interests of the parties and TXU's public shareholders.

A. Why Did Plaintiffs Agree to Settle?

Plaintiffs' counsel conducted an investigation relating to the claims and the underlying

7

events and transactions alleged in the Class Action and the Derivative Action. Among other

things , this included the production of non-public documents by the Settling Defendants to

Plaintiffs.

Plaintiffs' counsel have analyzed the evidence adduced during their investigation, and

have researched the applicable law with respect to the claims of Plaintiffs, TXU Shareholders

and TXU against the Defendants and the potential defenses thereto. Plaintiffs' counsel have also

retained a financial advisor and consulted with this advisor throughout the course of this

litigation.

Based upon their investigation as set forth above, Plaintiffs and their counsel have

concluded that the terms and conditions of this Settlement Agreement are fair, reasonable and

adequate to Plaintiffs, TXU Shareholders and TXU, and in their best interests, and have agreed

to settle the claims raised in the Class Action and the Derivative Action pursuant to the terms and

provisions of the Settlement Agreement, after considering (a) the substantial benefits that TXU

Shareholders and TXU have received from the Proposed Settlement , (b) the attendant risks of

litigation, and (c) the desirability of permitting the Proposed Settlement to be consummated

pursuant to the terms of this Settlement Agreement.

In particular, Plaintiffs and their counsel considered the availability of credit for

corporate acquisitions and the market's subsequent evaluation of the Proposed Acquisition in

light of that downturn. Regardless of the sale process used, it appeared unlikely to Plaintiffs that

a higher price would be offered for TXU in the foreseeable future. Likewise, it appeared highly

debatable as to whether continued operation ofTXU by its current management would result in a

higher share price than that offered by the Sponsors in the foreseeable future.

As a consequence , Plaintiffs and their counsel determined that it was advisable for TXU's

shareholders to vote on the Proposed Transaction once the shareholders were given full and

8

complete information via the Definitive Proxy Statement containing the supplemental disclosures

obtained by Plaintiffs. Additionally, to facilitate the possibility that a superior proposal might be

made for TXU prior to closing, the Termination Fee was reduced.

Plaintiffs and their counsel believe that, under the circumstances, they obtained the best

possible relief for TXU Shareholders and TXU.

B. Why Did the Defendants Agree to Settle?

The Settling Defendants, and the defendants in all the actions, have strenuously denied,

and continue strenuously to deny each and every allegation of liability and wrongdoing made

against them in the Class Action and the Derivative Action and all the other actions, and assert

that they have meritorious defenses to those claims, that their conduct has, at all times, been

lawful and proper in all respects, and that judgment or judgments should be entered dismissing

all claims against them with prejudice. The Settling Defendants have thus entered into this

Settlement Agreement solely to avoid the continuing additional expense, inconvenience, and

distraction of this burdensome litigation and to avoid the risks inherent in any lawsuit, and

without admitting any wrongdoing or liability whatsoever.

VIII. FAIRNESS HEARING AND SETTLEMENT HEARING

On the day of , 2008, at _.m., the Federal Court will hold a

Fairness Hearing at the United States District Courthouse for the Northern District of Texas,

Dallas Division, 1100 Commerce Street , Room 1312, Dallas , Texas 75242. At the Fairness

Hearing, the Federal Court will consider whether the Proposed Settlement is fair, reasonable and

adequate and thus should be finally approved.

On the day of , 2008, at -.m., the State Court will hold a

Settlement Hearing at the Dallas County Courthouse, 44th District Court, George L. Allen, Sr.

Courts Bldg., 600 Commerce St., 5th Floor , Dallas, Texas 75202. At the Settlement Hearing, the

9

State Court will consider whether to dismiss the Derivative Action pursuant to the Proposed

Settlement . The State Court also will consider Plaintiffs ' counsel ' s application for attorneys'

fees and expenses . The Settling Defendants will not oppose any application to the State Court by

Plaintiffs ' counsel for an award of attorneys ' fees and reimbursement of their reasonable out-of-

pocket expenses up to $3,500 , 000 (three million five hundred thousand dollars ). Any attorneys'

fees and expenses awarded will in no way reduce the amount that you have received for your

TXU stock.

IX. RIGHT TO ATTEND FAIRNESS HEARING AND/OR SETTLEMENTHEARING

Any TXU Shareholder may appear in person and observe the Fairness Hearing and/or the

Settlement Hearing . BUT YOU DO NOT HAVE TO ATTEND EITHER HEARING OR TAKE

ANY OTHER ACTION TO PARTICIPATE IN THE PROPOSED SETTLEMENT. If you want

to be heard at the Fairness Hearing and/or the Settlement Hearing in opposition to the Proposed

Settlement, then you must first comply with the procedures for objecting to the Proposed

Settlement, which are set forth below . The Courts have the right to change the hearing dates or

times without further notice. Thus, if you are planning to attend either hearing, you should

confirm the date and time before going to either Court.

X. RIGHT TO OBJECT TO THE PROPOSED SETTLEMENT ANDPROCEDURES FOR DOING SO

You have the right to object to any aspect of the Proposed Settlement . You must object

in writing, and you may request to be heard at the Fairness Hearing and/or at the Settlement

Hearing. If you choose to object, then you must follow these procedures. If you timely and

properly object, but either of the Courts overrules your objections, you still will be covered by

the Proposed Settlement.

10

A. You Must Make Detailed Objections in Writing

Any objections must be presented in writing and must contain the following information:

1. Notice of intent to appear at the Fairness Hearing and/or theSettlement Hearing;

2. Proof of being a TXU Shareholder;

3. A statement of each objection being made; and

4. The grounds for each objection or the reasons for such persons desiring to

appear and to be heard;

The Court will not consider any objection that does not substantially comply with these

requirements.

B. You Must Timely Deliver Written Objections to the Court, Plaintiffs' ClassCounsel, and Defendants' Counsel

YOUR WRITTEN OBJECTIONS MUST BE ON FILE WITH THE CLERKS OF THE

COURTS NO LATER THAN ]insert actual date] ]. The Court Clerks' addresses are:

U.S. District Clerk

Northern District of Texas, Dallas Division

1100 Commerce Street, Room 1452

Dallas, Texas 75242

Dallas County Courthouse

44th District Court

George L. Allen, Sr. Courts Bldg.600 Commerce St., Suite 643

Dallas, Texas 75202

YOU ALSO MUST DELIVER COPIES OF THE MATERIALS TO PLAINTIFFS'

COUNSEL AND COUNSEL FOR DEFENDANTS AT THE FOLLOWING ADDRESSES SO

THEY ARE RECEIVED NO LATER THAN [[insert date]].

Roger L. MandelSTANLEY, MANDEL & IOLA., L.L.P3100 Monticello Ave., Suite 750Dallas, Texas 75205Class Counsel

David PooleGeneral CounselTXU Corp.1601 Bryan Street , Suite 600Dallas, Texas 75201Counselfor TXU Corp.

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Michael D . Donovan

DONOVAN SEARLES, LLC1845 Walnut Street , Suite 1100

Philadelphia, PA 19103Counselfor Derivative Plaintiffs

John C. WanderVinson & Elkins, LLPTrammell Crow Center

2001 Ross AvenueSuite 3700

Dallas, Texas 75201Counselfor Kohlberg Kravis Roberts &

Co. and Texas Pacific Group

The Court will not consider any objection that is not timely filed with the Court or not timely

delivered to Plaintiffs' counsel and counsel for Defendants.

Any person or entity who fails to object or otherwise request to be heard in the manner

prescribed above will be deemed to have waived the right to object or otherwise request to be

heard (including the right to appeal) and will be forever barred from raising such objection or

request to be heard in this or any other action or proceeding.

XI. RELEASE OF CLASS MEMBERS' CLAIMS AND DISMISSAL OF THESETTLED ACTIONS

If the Courts approve the Proposed Settlement, the Settled Actions shall be dismissed on

the merits with prejudice as to all Defendants, without costs, except as provided in the Settlement

Agreement. Additionally, Plaintiffs and each of the TXU Shareholders, including the Settlement

Class Members, shall be deemed to have, and by operation of the Courts' approval of the

Proposed Settlement shall have, fully, finally, and forever released, relinquished and discharged

all Released Claims (including claims that Plaintiffs and each of the TXU Shareholders,

including the Settlement Class Members, do not laiow or suspect to exist at the time of the

release, which if known, might have affected such party's decision to enter into the release)

against the Released Persons . By operation of the entry of the Judgments, upon the Effective

Date, Plaintiffs and each of the TXU Shareholders, including the Settlement Class Members, for

themselves and their respective heirs, executors, administrators, predecessors, representatives,

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agents, successors, and assigns, agree to waive and shall be deemed to have waived any and all

provisions, rights and benefits which they now have, or in the future may have by virtue of the

provisions of § 1542 of the California Civil Code and any other similar, comparable or

equivalent law or provision with respect to the Released Claims, which section provides as

follows:

A general release does not extend to claims which the creditor doesnot know or suspect to exist in his favor at the time of executingthe release, which if known by him must have materially affectedhis settlement with the debtor.

The Courts' approval of the Proposed Settlement also will permanently bar and enjoin the

institution and prosecution by Plaintiffs and any TXU Shareholder, including the Settlement

Class Members, of any other action against any Released Person in any court asserting any

Released Claims.

Upon the Courts' approval of the Proposed Settlement, each of the Released Persons shall

be deemed to have, and by operation of the Courts' approval of the Proposed Settlement shall

have , fully, finally, and forever released , relinquished and discharged Plaintiffs, each and all of

the TXU Shareholders , including the Settlement Class Members, and Plaintiffs' counsel in the

Settled Actions from any and all claims, based upon or arising out of the institution, prosecution,

assertion, settlement or resolution of the actions or the Released Claims.

"Released Claims" means any and all claims, demands, rights, actions or causes of

action, liabilities, damages, losses, obligations, judgments, suits, injunctions, fees, expenses,

costs, matters and issues of any kind or nature whatsoever, whether known or unknown,

contingent or absolute, suspected or unsuspected, disclosed or undisclosed, hidden or concealed,

matured or unmatured, that have been, could have been, or in the future can or might be asserted

in the Settled Actions, or in any court, tribunal or proceeding (including, but not limited to, any

claims arising under federal or state statutory or common law relating to alleged fraud, breach of

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any duty, negligence, violations of the federal securities laws or otherwise), including claims by

or on behalf of any TXU Shareholder, including members of the Settlement Class (whether

individual, class, derivative, representative, legal, equitable or any other type or in any other

capacity), against the Released Persons whether or not any such Released Persons were named,

served with process or appeared in the Settled Actions, which have arisen, could have arisen,

arise now or hereafter arise out of, or relate in any manner to the Merger, the Proposed

Acquisition, or the allegations, facts, events, matters, statements, representations,

misrepresentations, omissions, or any other matter, thing or cause whatsoever, or any series

thereof, embraced, involved or set forth in, or referred to or otherwise related to: (i) the Merger

Agreement or the Proposed Acquisition, or any amendment thereto; (ii) the fiduciary obligations

of any of the Released Persons in connection with the Merger Agreement or the Proposed

Acquisition, or any amendment thereto; (iii) the negotiations in connection with the Merger

Agreement or the Proposed Acquisition, or any amendment or supplement thereto; and (iv) the

disclosure obligations of any of the Released Persons in connection with the Merger Agreement

or the Proposed Acquisition, or any amendment thereto, including any allegations of

misrepresentations and/or omissions in the Preliminary Proxy Statement and/or the Definitive

Proxy Statement and exhibits thereto or any amendment thereto; provided however, that the

Released Claims shall not include any appraisal right of the Plaintiffs or TXU Shareholders,

including the Settlement Class Members, or the rights of the Plaintiffs or TXU Shareholders,

including the Settlement Class Members, to enforce the terms of this Settlement Agreement in

the Federal Court or the State Court, as the case may be.

"Released Persons" means Kohlberg Kravis Roberts & Co., Texas Pacific Group, TPG

Capital, L.P. (f/k/a Texas Pacific Group), TXU Corp., Leldon E. Echols, Kerney Laday, Jack E.

Little, Gerardo I. Lopez, J.E. Oesterreicher, Michael W. Ranger, Leonard H. Roberts, Glenn F.

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Tilton, C. John Wilder, E. Gail de Planque, Goldman, Sachs & Co., Goldman Sachs Credit

Partners L.P., GS Capital Partners VI Fund, L.P., GSCP VI Offshore TXU Holdings, L.P., GS

Capital Partners VI Offshore, L.P., GSCP VI Germany TXU Holdings, LP, GS Capital Partners

VI GmbH & Co. KG, GS Capital Partners VI Parallel, L.P., GS Global Infrastructure Partners I,

LP, GS Infrastructure Offshore TXU Holdings, LP, GS International Infrastructure Partners I,

L.P., GS Institutional Infrastructure Partners I, LP, KKR 2006 Fund, L.P., KKR PEI

Investments, L.P., KKR Partners III, L.P., TPG Partners V, L.P., TPG Partners IV, L.P., TPG

FOF V-A, L.P., TPG FOF V-B, L.P., Texas Energy Future Co-Invest, LP, Citigroup Global

Markets Inc., Citigroup Alternative Investments LLC, Citigroup Global Markets Inc., JPMorgan

Chase Bank , N.A., J.P . Morgan Securities Inc., J . P. Morgan Ventures Corporation, Lehman

Brothers , Inc., Lehman Brothers Commercial Bank, Lehman Commercial Paper Inc ., Lehman

Brothers Co-Investment Partners L . P., Lehman Brothers Co-Investment Capital Partners L.P.,

Lehman Brothers Co-Investment Group L . P., Lehman Brothers PEP Investments I, L.P.

(Incorporated), Lehman Brothers Fund of Funds XVIII - Co- Investment Holdings, LP, Lehman

Brothers Secondary Opportunities Pooling, LP, Lehman Brothers Real Assets Fund, LP, LB I

Group, Inc., Morgan Stanley & Co. Incorporated, Morgan Stanley Senior Funding, Inc., Energy

Future Holdings Corp. ("EFH"), Texas Energy Future Holdings Limited Partnership, Texas

Energy Future Capital Holdings LLC and Texas Energy Future Merger Sub Corp and/or their

respective families, parent entities, associates, affiliates or subsidiaries, and each and all of their

respective past, present or future officers, directors, stockholders, agents, representatives,

employees, attorneys, financial or investment advisors, advisors, consultants, accountants,

investment bankers, commercial bankers, trustees, engineers, agents, insurers, co-insurers and

reinsurers, heirs, executors, trustees, general or limited partners or partnerships, limited liability

companies, members, investors, heirs, executors, personal or legal representatives, estates,

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administrators, predecessors, successors and assigns.

XII. HOW TO OBTAIN ADDITIONAL INFORMATION

This Notice summarizes the Settled Actions and the provisions of the Settlement

Agreement. It is not a complete statement of the Settled Actions or the Settlement Agreement.

Although Plaintiffs' counsel and counsel for the Settling Defendants believe that the descriptions

about the Proposed Settlement that are contained in this Notice are accurate in all material

respects, in the event of any inconsistencies between the descriptions in this Notice and the

Settlement Agreement, the Settlement Agreement will control.

Copies of the operative complaint for the Class Action, the operative petition for the

Derivative Action, the Settlement Agreement, the Preliminary Approval Order entered by the

Federal Court in the Class Action, the Scheduling Order entered by the State Court in the

Derivative Action, this Notice, and Answers to Frequently Asked Questions are available for

review and printing at www. . In addition, copies of any of these documents may be

obtained by leaving a message at 1-888- - . In addition, you may leave a message at

that number asking for a return phone call from Plaintiffs' counsel.

You may inspect the Settlement Agreement and other papers in the Class Action at the

United States District Clerk's office at any time during nonnal business hours, Monday through

Friday, 9:00 a . m. to 4 : 00 p.m., Central time . The Clerk's office is located at 1100 Commerce

Street , Room 1452, Dallas, Texas 75242. However , you must appear in person to inspect these

documents . The Clerk 's office cannot mail copies to you.

You may inspect the Settlement Agreement and other papers in the Derivative Action at

the Clerk's Office at any time during normal business hours, Monday through Friday, 8:00 a.m.

to 4:00 p.m., Central time. The Clerk's office is located at George L. Allen, Sr. Courts Bldg.,

600 Commerce St., Suite 103, Dallas , Texas 75202. However, you must appear in person to

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inspect these documents . The Clerk' s office cannot mail copies to you.

While you may review documents on file at either Clerk's office, the Clerks' offices

cannot answer any questions about these documents. Do not direct any questions that you have

about the matters in this Notice to either Clerk's office or either Court. Instead, you may direct

any questions to, or obtain further information from, the phone number listed above.

PLEASE DO NOT CALL, WRITE, OR OTHERWISE DIRECT QUESTIONS TO

EITHER COURT OR EITHER CLERK'S OFFICE.

XIII . NOTICE TO PERSONS OR ENTITIES HOLDING OWNERSHIP ON BEHALFOF OTHERS

Brokerage firins, banks and/or other persons or entities who held shares of TXU common

stock for the benefit of others are requested to immediately send this Notice to all of their

respective beneficial owners. If additional copies of the Notice are needed for forwarding to

such beneficial owners, any requests for such additional copies or provision of a list of names

and mailing addresses of beneficial owners may be to TXU Corporation Shareholder Litigation,

Notice Administrator, [address). If TXU Shareholders have questions or comments about the

Proposed Settlement, they should contact follow the procedures listed in Section XII.

Such brokerage firms, banks and/or other persons or entities requesting additional copies

or providing a list of names and mailing addresses of beneficial owners will be reimbursed for

documented reasonable out-of-pocket expenses incurred in providing such additional copies or

providing a list of names and mailing addresses of beneficial owners.

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EXHIBIT F

IN THE UNITED STATES DISTRICT COURTNORTHERN DISTRICT OF TEXAS

DALLAS DIVISION

Harry Schipper, Individually and on Behalf §of All Others Similarly Situated, §

Plaintiff, §V. §

TXU CORP., C. JOHN WILDER, JAMES §OESTERREICHER, KERNEY LADAY, SR., §JACK LITTLE, GLENN TILTON, LEONARD §ROBERTS, E. GAIL DE PLANQUE, §LELDON E. ECHOLS, GERARDO LOPEZ, §and MICHAEL RANGER, §

Defendants. 8

CIVIL ACTION NO. 3-07CV1281-G

CAUSE NO. 07-01779

§ IN THE DISTRICT COURT OFIn re TXU Corp. Derivative Litigation § DALLAS COUNTY, TEXAS

44TH JUDICIAL DISTRICT

SUMMARY NOTICE OF PENDENCY OF SHAREHOLDER DERIVATIVEAND CLASS ACTION PROPOSED SETTLEMENT THEREOF AND HEARINGS

TO: ALL PERSONS WHO HELD TXU CORP. COMMON STOCK AT ANY TIMEFROM NOVEMBER 27, 2006, TO OCTOBER 10, 2007 (THE "TXUSHAREHOLDERS").

YOU ARE HEREBY NOTIFIED , that hearings will be held on , 2008 at

-:00 _.m. at the United States District Court for the Northern District of Texas (the "Federal

Court"), Courtroom 1312, United States Courthouse, Dallas Division, I100 Commerce Street,

Dallas, Texas 75242, and on 2008 at -:00 _.m. at the Dallas County

Courthouse, 44'" Judicial District ("the "State Court"), George L. Allen, Sr. Courts Building, 600

Commerce Street, 5'h Floor, Dallas Texas 75202, in connection with the proposed settlement (the

"Settlement") of the above-entitled class action and shareholder derivative action . The Federal

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Court will determine whether to approve the Settlement of the class action before it as fair,

reasonable, and adequate . The State Court will determine whether to dismiss the derivative

action before it pursuant to the Settlement and whether the application of Plaintiffs' counsel for

an award of attorneys ' fees and reimbursement of expenses should be approved.

IF YOU HELD TXU CORP. COMMON STOCK AT ANY TIME FROM NOVEMBER

27, 2006 , TO OCTOBER 10, 2007, YOUR RIGHTS MAY BE AFFECTED BY THE

SETTLEMENT OF THESE ACTIONS.

The above-captioned actions are shareholder derivative and class actions alleging breach

of fiduciary duty or violations of the federal securities laws by certain directors and/or officers of

TXU and/or the purchasers of TXU. Plaintiffs have alleged that Defendants breached their

fiduciary duties and/or issued materially false and misleading proxy solicitations in connection

with the proposed buyout of TXU's public shareholders by an acquisition entity formed by

Kohlberg Kravis Roberts & Co. and Texas Pacific Group . Among other things, the proposed

Settlement provides for the modification of the Termination Fee set forth in the Merger

Agreement in certain circumstances and the disclosure of additional information in the Definitive

Proxy Statement pertaining to the Merger.

Any TXU Shareholder may object to any aspect of the Settlement . Any such Person

must submit a written notice of objection by , 2008 , in the manner and form

explained in the detailed Notice referred to below.

If you have not yet received the detailed Notice, which more completely describes the

Settlement and your rights thereunder, you may obtain a copy of that document by visiting

www. ; by calling 1-888 ; or by identifying yourself as a TXU

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Shareholder and writing to: TXU Corporation Shareholder Litigation, Notice Administrator,

[address].

Inquiries should NOT be directed to TXU, the Courts , or the Clerks of the Courts.

Dated: , 2008.BY ORDER OF THE COURTS

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