TXU's executive compensation policies affirm the company's commitment to sound corporate governance practices. Examples of actions taken since 2004 to achieve this include:

• Maintaining compensation structures based on targeting median competitive pay;
• Redefining TXU's peer group in order to effect more stringent, market-based comparisons;
Holding salaries for named executive officers flat since 04 and shifting compensation to variable, at-risk pay linked to meeting annual performance goals and long-term shareholder value creation
Freezing or eliminating many perquisites;
Phasing out or eliminating other programs that do not support the company's pay-for-performance culture or long-term shareholder interest;
Adopting stringent change-in-control provisions that prohibit the triggering of automatic or accelerated payments to the Named Executive Officers (NEOs);
Strengthening the role of the independent Chair of the Organization and Compensation Committee and the Committee itself; and
Prohibiting hedging against TXU securities.

TXU's executive compensation programs are overseen by a Committee composed of 5 non-employee, independent directors, each of whom satisfies the requirements for independence under applicable law and regulations of the SEC and the New York Stock Exchange (NYSE). The Committee has retained Towers Perrin as its external compensation advisor. There are no other relationships between TXU and Towers Perrin, one if the world's top compensation and benefits consulting firms, as its external advisor on executive compensation.

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TXU Energy (REP Certificate No. 10004) and Luminant are not the same company as Oncor Electric Delivery and are not regulated by the Public Utility Commission of Texas, and you do not have to buy TXU Energy's or Luminant's products to continue to receive quality regulated services from Oncor Electric Delivery.