TXU CORP /TX/
EXHIBIT10A
<DOCUMENT>
<TYPE>EX-10
<SEQUENCE>3
<FILENAME>exh10a.txt
<DESCRIPTION>EXHIBIT10A
<TEXT>
<PAGE>

                                                                Exhibit 10(a)

This document constitutes part of the Prospectus covering securities that have
been registered under the Securities Act of 1993 (US)















TXU Australia Services Pty Ltd
ACN 081 074 160



Employee Share Plan Rules
Established                 21 December          2001









<PAGE>


Contents
<TABLE>
<CAPTION>


<S>     <C>                                                    <C>
Provisions                                                1    11.  Amendment                                    7
1.      Purpose                                           1    ---------------------------------------------------
-----------------------------------------------------------    12.  Powers of the Board of TXU Australia         8
                                                               ---------------------------------------------------
2.      Eligibility                                       1         12.1. Powers of the Board                    8
-----------------------------------------------------------         12.2. Indemnification                        8
        2.1. Eligible Employee                            1         12.3. Commencement of Plan                   8
        2.2. Minimum Service Period                       1         12.4. Termination or Suspension of Plan      8
                                                                    12.5. Resolution to Terminate, Suspend,
3.      Participation                                     1               Supplement or Amend                    8
-----------------------------------------------------------
        3.1. Invitation to Participate                    1     13. Powers of the Administrator                  9
        3.2. Application Form                             1     ---------------------------------------------------
        3.3. Enrolment in an Offering Period              2         13.1. Appointment of Administrator           9
        3.4. Participant Bound by Application Form,                 13.2. Role of Administrator                  9
             Rules and Constitution                       2         13.3. Shares Held on Trust                   9

4.      Offering Periods                                  2     14. Contracts of Employment and Other
-----------------------------------------------------------     -------------------------------------
        4.1. Offering Period                              2          Employment Rights                           9
        4.2. Duration of Offering Period                  2     --------------------------------------------------
                                                                    14.1. Discretion of the Board                9
5.      Pre-Tax Contributions                             2         14.2. No Right to Shares                     9
-----------------------------------------------------------         14.3. No Right to Future Employment          9
        5.1. Pre-Tax Contributions                        2         14.4. Acknowledgement by Participant        10
        5.2. Limit on Contribution Under Tax Exempt
             Plan                                         3         15.   Connection with Other Plans           10
        5.3. Reduction in Weekly, Fortnightly or Monthly            ----------------------------------------------
             Pay                                          3         16.   Replacement of TXU Australia          10
        5.4. Reduction in Annual Bonus                    3         ----------------------------------------------
        5.5. Holding account                              3         17.   Notices                               10
        5.6. No Interest on Contributions in Account      3         ----------------------------------------------
                                                                    18.   General                               10
6.      Withdrawal from Offering Period                   4         ----------------------------------------------
-----------------------------------------------------------         19.   Plan Costs                            10
        6.1. Exceptional Circumstances                    4         ----------------------------------------------
        6.2. Immediate Withdrawal                         4         20.   Overseas Eligible Employees           11
                                                                    ----------------------------------------------
7.      Share Acquisition                                 4         21.   Governing Law                         11
-----------------------------------------------------------         ----------------------------------------------
        7.1. Transfer of Contributions to Trustee         4         Schedule 1 - Interpretation                 12
        7.2. Share Acquisition                            5         1.    Definitions and Interpretation        12
        7.3. Number of Purchasable Shares                 5         ----------------------------------------------
        7.4. Purchase Price                               5               1.1.  Definitions                     12
        7.5. Limit on Number of Shares Under Tax                          1.2   Interpretation                  15
             Exempt Plan                                  5               1.3   Schedules                       15
        7.6. Refund                                       5         Schedule 2 - Adoption                       16

8.      Restrictions on Transfer                          6
-----------------------------------------------------------
        8.1.    Disposal Restrictions                     6
        8.2.    Transfer or Sale of Shares                6
        8.3.    Shares Sold                               6

9.      Compliance                                        6
-----------------------------------------------------------

10.     Shares Subject to Plan                            7
-----------------------------------------------------------
        10.1.   Common Stock                              7
        10.2.   Shares Rank Equally                       7
        10.3.   Quotation on NYSE                         7
                                                                                                               i
</TABLE>
<PAGE>

Provisions

The interpretation provisions of this document are in Schedule 1.

1.     Purpose
--------------------------------------------------------------------------------
       The purpose of the Plan is to assist in the development of the corporate
       culture and to align employee values with those of the TXU group by
       enabling employees to make a personal commitment through this Plan in
       return for a stake in TXU USA.

2.     Eligibility
--------------------------------------------------------------------------------
2.1.   Eligible Employee

       An individual must be an Eligible Employee:

       (a) at the start date of an Offering Period to be invited to participate
           in the Offering Period under the Plan; and

       (b) at the end of an Offering Period for shares to be purchased on the
           Participant's behalf in that Offering Period.

2.2.   Minimum Service Period

       Unless determined otherwise by the Board, an Eligible Employee, must have
       at least three months of service (either full time or part-time) with a
       Participating Company on the start date of an Offering Period in order to
       be invited to participate in that Offering Period.

3.     Participation
--------------------------------------------------------------------------------
3.1.   Invitation to Participate

       Subject to rule 2, the Board may from time to time invite Eligible
       Employees to participate in an Offering Period to accumulate pre-tax
       Salary and/or Annual Bonus over the Offering Period to acquire Shares at
       the Purchase Price.

3.2.   Application Form

       Any invitation must be accompanied by an Application Form applying to the
       Offering Period. The Application Form must display, or have attached, the
       following:

       (a)    an election for participating in the Plan under the Tax Exempt
              Plan or Tax Deferred Plan;

       (b)    an election in relation to the amount or percentage of pre-tax
              contribution of Salary and/or amount or percentage of pre-tax
              contribution of Annual Bonus into the Plan;

       (c)    the nomination of the Deferral Period to apply to Shares under the
              Tax Deferred Plan;

                                                                       Page 1

<PAGE>

        (d)   any other terms imposed by the Board in relation to the award;

        (e)   in respect of the initial application made by an Eligible
              Employee, a summary of, or a copy of, these rules; and

        (f)   any other information or documents that the Corporations Act 2001
              require TXU Australia to give to the Participant.

3.3.   Enrolment in an Offering Period

       Each Eligible Employee invited to participate may become a Participant by
       executing and submitting an Application Form to TXU Australia by the
       closing date noted in the invitation to Eligible Employees.

3.4.   Participant Bound by Application Form, Rules and Constitution

       By completing and returning the Application Form, a Participant agrees to
       be bound by the terms of the Application Form, these Rules and the
       Constitution.

4.     Offering Periods
--------------------------------------------------------------------------------
4.1.   Offering Period

       Eligible Employees will be offered participation in the Plan through a
       series of successive Offering Periods until such time as:

       (a) the number of shares available for allotment under the Plan have been
           allotted; or

       (b) the Plan is suspended or terminated;

       whichever is earlier.

4.2.   Duration of Offering Period

       Each Offering Period will have a duration of six months as follows:

       (a) 1 January to 30 June; and

       (b) 1 July to 31 December;

       of each calendar year.

5.     Pre-Tax Contributions
--------------------------------------------------------------------------------
5.1.   Pre-Tax Contributions

       Subject to rule 5.2, the amounts applied to the Plan for each Offering
       Period as nominated on the Application Form and in accordance with rule
       3.2(b) will be a pre-tax contribution:

       (a)    in the case of pre-tax contribution of Salary, the amount or
              percentage nominated shall not exceed 10% of the Participant's
              Salary; and
                                                                        Page 2
<PAGE>

       (b)    in the case of pre-tax contribution of Annual Bonus, the
              percentage nominated may be any proportion up to a maximum of 100%
              of the Participant's Annual Bonus.

5.2.   Limit on Contribution Under Tax Exempt Plan

       Where a Participant has elected for the Tax Exempt Plan on the
       Application Form, the maximum pre-tax contribution is AUD$850 per tax
       year.

5.3.   Reduction in Weekly, Fortnightly or Monthly Pay

       The pre-tax contribution of Salary for each Offering Period as nominated
       by the Participant on the Application Form will be made via equal
       reductions in the Participant's weekly, fortnightly or monthly pay (as
       appropriate) commencing on the first Pay Day in the Offering Period and
       ending:

       (a)    in the case of a Participant who is paid weekly, the
              pre-penultimate Pay Day in the Offering Period;

       (b)    in the case of a Participant who is paid fortnightly, the
              penultimate Pay Day in the Offering Period; or

       (c)    in the case of a Participant who is paid monthly, the final Pay
              Day in the Offering Period.

5.4.   Reduction in Annual Bonus

       The pre-tax contribution of Annual Bonus will be made via reduction in
       the Participant's entitlement to the Annual Bonus (if any) by the amount
       or percentage nominated by the Participant on the Application Form.

5.5.   Holding account

       All amounts of pre-tax contributions applied are to be held by
       Participating Companies in trust for the Participant in an account of an
       Australian authorised deposit taking institution which is established
       and kept by the Participating Companies solely for the purpose of
       depositing the contributions of Salary and/or Annual Bonus.

5.6.   No Interest on Contributions in Account

       No interest shall accrue for the benefit of or to be paid to any
       Participant with respect to funds held in the holding account.

                                                                        Page 3

<PAGE>

6.     Withdrawal from Offering Period
--------------------------------------------------------------------------------
6.1.   Exceptional Circumstances


       Subject to this rule, the pre-tax contribution authorised by the
       Participant in accordance with rule 3.2 will continue in effect for the
       entire Offering Period and may not be withdrawn without the approval of
       the Board. Any approval to withdraw will only be granted in exceptional
       circumstances as determined by the Board.

       Where the Board grants approval for a Participant to withdraw from the
       Offering Period, the Participant shall be paid a cash amount equivalent
       to his or her pre-tax contribution through the payroll subject to
       deduction of any applicable withholding taxes.

6.2.   Immediate Withdrawal

       Notwithstanding rule 6.1, a Participant's pre-tax contribution is
       immediately terminated during an Offering Period and the Participant will
       be paid a cash amount equivalent to his or her pre-tax contribution
       through the payroll, subject to deduction of any applicable withholding
       taxes, if the following occurs during the Offering Period but prior to
       the allotment and issue of Shares for that Offering Period:

       (a)   a Participant ceases employment with the TXU group; or

       (b)   a Control Event occurs in relation to TXU USA;

       (c)   the Participant is employed by a Participating Company and a
             Control Event occurs in relation to that Participating Company or a
             company that directly or indirectly Controls that Participating
             Company.

7.     Share Acquisition
--------------------------------------------------------------------------------
7.1.   Transfer of Contributions to Trustee

       Following the Pay Day where final contributions are made in the Offering
       Period the Participating Companies shall pay the accumulated
       contributions to the Trustee to enable the Trustee to acquire Shares on
       behalf of Participants.

                                                                        Page 4
<PAGE>

7.2.   Share Acquisition

       Following the Pay Day where final contributions are made in the Offering
       Period in accordance with rule 5.3, the Trustee will cause Shares to be
       purchased on behalf of Participants in accordance with rule 7.3 and the
       Shares will be held on trust for Participants by the Trustee under the
       terms of the Trust Deed.

7.3.   Number of Purchasable Shares

       Subject to rules 7.5 and 7.6, the number of Shares purchasable by a
       Participant is equal to the number of Shares (rounded down to the nearest
       whole number of shares) obtained by dividing:

       (a)    the accumulated pre-tax contributions during the Offering Period
              converted to US dollars on the on exchange rate on the Nominated
              Date by;

       (b)    the Purchase Price for that Offering Period.

7.4.   Purchase Price

       The Purchase Price per Share is equal to 85% of the lower of:

       (a)   the Fair Market Value per Share on the first business day of the
             Offering Period; or

       (b)   the Fair Market Value per Share on a date nominated (Nominated
             Date) by the Board shortly after the Pay Day where final
             contributions are made in the Offering Period in accordance with
             rule 5.3 and before the end of the Offering Period.

7.5.   Limit on Number of Shares Under Tax Exempt Plan

       The maximum number of Shares purchasable on behalf of a Participant who
       has elected for the Tax Exempt Plan shall not exceed in value, based on
       the Market Value of the Shares on the date the Shares are allotted and
       issued, AUD$500 per Offering Period where Salary only is contributed or
       AUD$1,000 in a tax year in any event.

7.6.   Refund

       Any pre-tax contributions not applied to the purchase of Shares by reason
       of the limitation on the maximum number of shares purchasable or would
       otherwise result in the purchase of a fraction of a Share will be paid to
       the Participant as a cash amount through the payroll subject to deduction
       of any applicable withholding taxes following the end of the Offering
       Period.


                                                                        Page 5

<PAGE>

8.     Restrictions on Transfer
--------------------------------------------------------------------------------
8.1.   Disposal Restrictions

       A Participant must not sell, transfer or otherwise dispose of any Shares
       allotted and issued, or transferred, to the Participant under the Plan
       or, if the Participant's Shares are held on trust as contemplated by rule
       13.3, the Administrator must not sell any Shares on behalf of any
       Participant or transfer any Shares to or at the direction of any
       Participant, until the earlier of:

       (a)    the end of the Deferral Period;

       (b)    the time when the Participant ceases to be employed by a
              Participating Company, including the circumstance where a Control
              Event occurs in relation to the Participating Company or a company
              that directly or indirectly Controls that Participating Company.

8.2.   Transfer or Sale of Shares

       Following the expiry of the Disposal Restrictions, a Participant may
       within one month direct the Administrator to:

       (a)    transfer legal title in the Shares to the Participant (if the
              Shares are held on trust as contemplated by rule 13.3); or

       (b)    sell the Shares on the Participant's behalf at the prevailing
              market price and pay to the Participant the sale proceeds subject
              to deduction of any costs associated with the sale, including but
              not limited to brokerage fees;

       failing which, the Shares shall continue to be held on trust for the
       Participant until such time as the Participant gives notice to the
       Administrator requesting that the Shares be transferred or sold.

8.3.   Shares Sold

       In any event, Shares will be sold in accordance with paragraph (b) of
       rule 8.2 if:

       (a)    the Participant ceases employment with a Participating Company,
              including the circumstance where a Control Event occurs in
              relation to the Participating Company or a company that directly
              or indirectly controls that Participating Company; and

       (b)    the Participant fails to provide directions to the Administrator
              in accordance with rule 8.2.

9.     Compliance
--------------------------------------------------------------------------------
       The Board must not invite an Eligible Employee to complete an Application
       Form or allot and issue or procure the transfer of Shares to a
       Participant unless:
                                                                       Page 6
<PAGE>

       (a)    the disclosure provisions of Chapter 6D of the Corporations Act
              2001 do not apply to the invitation or the allotment and issue
              or the transfer; or

       (b)    the invitation or the allotment and issue or the transfer does
              not need disclosure to investors because of section 708 of the
              Corporations Act 2001; or

       (c)    an exemption from Parts 6D.2 and 6D.3 of the Corporations Act 2001
              applies to the invitation or the allotment and issue or the
              transfer and all conditions and requirements of that exemption are
              satisfied; or

       (d)    the invitation or the allotment and issue or the transfer complies
              with Parts 6D.2 and 6D.3 of the Corporations Act 2001.

10.    Shares Subject to Plan
--------------------------------------------------------------------------------
10.1.  Common Stock

       The Shares purchasable under the Plan are Shares of authorised but
       unissued or reacquired common stock in TXU USA, including Shares
       purchased on the open market.

10.2.  Shares Rank Equally

       Subject to the Disposal Restrictions, Shares allotted and issued under
       the Scheme must rank equally in all respects with all other Shares from
       the date of allotment and issue, including:

       (a) voting rights; and

       (b) entitlements to participate in:

           (i)  distributions and dividends; and

           (ii) future rights issues and bonus issues,

       where the record date for determining entitlements falls on or after the
       date of allotment and issue.

10.3.  Quotation on NYSE

       TXU USA must apply for quotation on the official list of the NYSE of
       Shares allotted and issued under the Scheme as soon as practicable after
       the allotment and issue of those Shares, so long as its Shares are quoted
       on the official list of NYSE at that time.

11.    Amendment
--------------------------------------------------------------------------------
       These rules may be amended or supplemented at any time by resolution of
       the Board.

                                                                        Page 7
<PAGE>

12.    Powers of the Board of TXU Australia
--------------------------------------------------------------------------------
12.1.  Powers of the Board

       The Plan will be managed by the Board, which will have power to:

       (a)    determine appropriate procedures for the administration of the
              Plan consistent with these rules;

       (b)    resolve conclusively all questions of fact or interpretation
              arising in connection with the Plan;

       (c)    determine matters falling for determination under these rules in
              its discretion having regard to the interests of and for the
              benefit of the TXU group;

       (d)    exercise the discretions conferred on it by these rules or which
              may otherwise be required in relation to the Plan;

       (e)    delegate to any one or more persons (for such period and on such
              conditions as it may determine) the exercise of any of its powers
              or discretions arising under the Plan; and

       (f)    establish a trust to acquire, hold and deliver Shares under the
              Plan and appoint a trustee as contemplated by rule 13.3, if
              required.

12.2.  Indemnification

       TXU Australia must indemnify, and keep indemnified, to the full extent
       permitted by law, each person who is or has been a director or alternate
       director of TXU Australia against all proceedings, actions, claims,
       demands, losses, liabilities, damages, costs and expenses which may be
       made, brought against, suffered or incurred by the person arising
       directly or indirectly out of or in connection with the administration of
       the Scheme.

12.3.  Commencement of Plan

       The Plan will take effect on and from such date as the Board may resolve.

12.4.  Termination or Suspension of Plan

       The Board may terminate or suspend the operation of the Plan at any time.
       In the event of a suspension or termination, these rules (including rule
       12.1) will continue to operate with respect to any Shares allotted and
       issued, or transferred, under the Plan prior to that suspension or
       termination.

12.5.  Resolution to Terminate, Suspend, Supplement or Amend

       In passing a resolution to terminate or suspend the operation of the Plan
       or to supplement or amend these rules, the Board must consider and
       endeavour to ensure that there is fair and equitable treatment of all
       Participants, subject to rule 14.

                                                                         Page 8
<PAGE>

13.    Powers of the Administrator
--------------------------------------------------------------------------------
13.1.  Appointment of Administrator

       The Board may appoint an Administrator to administer the Plan and may
       determine the terms and conditions of the Administrator's appointment.
       The Board may remove the Administrator.

13.2.  Role of Administrator

       The Administrator must administer the Plan in accordance with these rules
       and any procedures determined by the Board and agreed to as between the
       Board and the Administrator.

13.3.  Shares Held on Trust

       The Board may determine, at its discretion, that Shares to be allotted
       and issued, or transferred, under the Plan should be held in the name of
       the Administrator or a trustee for the benefit of Participants. If the
       Board so determines:

       (a)    it may make rules relating to the casting of votes (and such other
              matters as it thinks fit) in respect of Shares held by the
              Administrator or trustee; and

       (b)    the Disposal Restrictions will apply equally to Shares held by the
              Administrator or Trustee.

14.    Contracts of Employment and Other Employment Rights
--------------------------------------------------------------------------------
14.1.  Discretion of the Board

       It is a condition of these rules that the Plan may be terminated at any
       time at the discretion of the Board and that no compensation under any
       employment contract will arise as a result.

14.2.  No Right to Shares

       Participation in the Plan does not confer on any Eligible Employee any
       future right to enrol in future Offering Periods.

14.3.  No Right to Future Employment

       Participation in the Plan does not confer on any Participant any right to
       future employment and does not affect any rights which his or her
       Employer may have to terminate the employment of any Participant.


                                                                        Page 9
<PAGE>

14.4.  Acknowledgement by Participant

       In making an application to participate in the Plan, it is acknowledged
       and accepted by each Participant that the terms of the Plan do not form
       part of the terms and conditions of the Participant's employment
       contract, nor do the terms of the Plan constitute a contract or
       arrangement (including any related condition or collateral arrangement)
       in relation to the Participant's employment contract.

15.    Connection with Other Plans
--------------------------------------------------------------------------------
       Unless the Board otherwise determines, participation in the Plan does not
       affect, and is not affected by, participation in any other incentive or
       other plan or scheme operated by the TXU group unless the terms of that
       other plan or scheme provide otherwise.

16.    Replacement of TXU Australia
--------------------------------------------------------------------------------
       TXU USA may replace TXU Australia with another Australian Subsidiary in
       the event of a corporate reorganisation, reconstruction or similar event
       whereby it is thought desirable or necessary to do so and all references
       in the Plan to TXU Australia and the Board shall be read and construed
       as references to the replacement company and its board. Any Australian
       Subsidiary to be appointed to act in place of TXU Australia shall be
       required to confirm in writing its willingness to so act and to meet the
       obligations of TXU Australia under the Plan.

17.    Notices
--------------------------------------------------------------------------------
       Any notice or direction given under these rules is validly given if it is
       handed to the person concerned or sent by ordinary prepaid post to the
       person's last known address or given in any reasonable manner which the
       Board from time to time determines.

18.    General
--------------------------------------------------------------------------------
       Notwithstanding any rule, Shares may not be allotted and issued,
       acquired, transferred or otherwise dealt with under the Plan if to do so
       would contravene the Corporations Act 2001, or any other applicable laws.

19.    Plan Costs
--------------------------------------------------------------------------------
       Unless otherwise determined by the Board or any other agreement, TXU
       Australia must pay all costs, charges and expenses relating to the
       establishment and operation of the Plan, including all costs incurred in
       or associated with an allotment, issue or acquisition of Shares.

                                                                        Page 10
<PAGE>

20.    Overseas Eligible Employees
--------------------------------------------------------------------------------
       TXU Australia at the Board's discretion may:

       (a)    allot and issue, or transfer, Shares to Eligible Employees and
              Participants who are resident outside Australia;

       (b)    make regulations for the operation of the Plan which are not
              inconsistent with these rules to apply to Eligible Employees and
              Participants who are resident outside Australia; and

       (c)    make changes to the Plan to comply with tax, legal and other
              regulatory matters in respect of Participants who are resident
              outside of Australia.

21.    Governing Law
--------------------------------------------------------------------------------
       The laws of Victoria, Australia, govern these rules.
























                                                                      Page 11
<PAGE>

Schedule 1 - Interpretation
--------------------------------------------------------------------------------

1.     Definitions and Interpretation
--------------------------------------------------------------------------------
1.1.   Definitions

       In this document, unless the context otherwise requires, the following
       words have these meanings.


      Administrator        means the person (if any) selected by the Board to
                           carry out the day to day administration of the
                           Plan as contemplated by rule 13.1;

      Annual Bonus         means the TXU Annual Performance Incentive which
                           may be payable to employees in respect of the
                           calendar year preceding an Offering Period;

      Application Form     means the form that the Board determines is to be
                           used by an Eligible Employee to apply for
                           participation in an Offering Period under the Plan;

      AUD                  means Australian dollars;

      Board                means the board of directors of TXU Australia or a
                           committee appointed by the board of directors of
                           TXU Australia;

      Constitution         means the constitution or equivalent document of
                           TXU USA;

      Control              has the meaning given to it under Corporations Act
                           2001;

      Control Event        means any of the following:

                           (a)   an offer is made by a person for the
                                 whole of the issued ordinary share
                                 capital of the Participating Company
                                 or TXU USA (or any part as is not at
                                 the time owned by the offeror or any
                                 person acting in concert with the
                                 offeror) and after the announcement of
                                 the offer the offeror (being a person
                                 who did not control the Participating
                                 Company or TXU USA prior to the offer)
                                 acquires Control of the Participating
                                 Company or TXU USA;


                                                                      Page 12
<PAGE>


                           (b)   any other event occurs which causes a
                                 change of Control of the Participating
                                 Company or TXU USA; or

                           (c)   any other event which the Board
                                 reasonably considers should be
                                 regarded as a Control Event;

      Deferral Period      means:

                           (a)  in relation the Tax Exempt Plan the
                                three year period from allotment and
                                issue or transfer of Shares under the
                                Plan; and

                           (b)  in relation to the Tax Deferred Plan,
                                the period nominated by the Participant
                                on the Application Form submitted in
                                accordance with rule 3.2, subject to a
                                minimum period of three years and a
                                maximum period of ten years from the
                                allotment and issue or transfer of
                                Shares under the Plan;

      Disposal Restrictions     mean the restrictions applying to the Shares
                                acquired under the Plan in accordance with rule
                                8.1;

      Eligible Employee         means each Permanent Employee of each
                                Participating Company and any other
                                employee or a director of a Participating
                                Company who is determined by the Board to be
                                an Eligible Employee for the purposes of the
                                Plan;

      Fair Market Value         means the closing selling price per Share on the
                                date in question on the NYSE, or if there is no
                                closing selling price on the date in question,
                                then it means the closing selling price on the
                                last preceding date for which such quotation
                                exists;

      Market Value              in relation to a Share, has the meaning ascribed
                                to that term in Section 139FA of the Income Tax
                                Assessment Act 1936;

      NYSE                      means the New York Stock Exchange;

      Offering Period           means the period during which Participants make
                                pre-tax contributions of Salary and/or Annual
                                Bonus to be accumulated towards the acquisition
                                of Shares in accordance with rules 4 and 5;

                                                                  Page 13
<PAGE>

      Participant           means an Eligible Employee who has been invited to
                            participate in the Plan and has accepted the
                            invitation;

      Participating         means an Australian Subsidiary of TXU USA
      Company               and for the avoidance of doubt shall
                            include TXU Australia Services Pty Ltd ACN
                            081 074 160, TXU Electricity Limited ACN 064
                            651 118, and TXU Torrens Island
                            Pty Ltd ACN 081 074 197;

      Pay Day               means the day when employees are paid on a weekly,
                            fortnightly or monthly basis;

      Permanent Employee    has the meaning ascribed in section 139GB of the
                            Income Tax Assessment Act 1936;

      Plan                  means the TXU Australia Employee Share Plan
                            established and operated in accordance with these
                            rules;

      Purchase Price        means the price at which Shares may be acquired
                            under the Plan in accordance with rule 7.4;

      Salary                means a Participant's gross annual salary at the
                            start of each Offering Period;

      Share                 means a share of TXU USA's common stock;

      Subsidiary            means a subsidiary within the meaning in the
                            Corporations Act 2001;

      Tax Deferred Plan     means that plan as nominated by an
                            Eligible Employee in their Application
                            Form which is governed by these rules in
                            their entirety save for those portions
                            specifically referenced only to the Tax
                            Exempt Plan;

      Tax Exempt Plan       means that plan as nominated by an
                            Eligible Employee in their Application
                            Form which is governed by these rules in
                            their entirety save for those portions
                            specifically referenced only to the Tax
                            Deferred Plan;

      Trust Deed            means the trust deed establishing the
                            TXU Australia Employee Share Plan Trust;

      Trustee               means the trustee appointed under the Trust Deed;

                                                                        Page 14
<PAGE>


      TXU Australia         means TXU Australia Services Pty Ltd
                            (ACN 081 074 160); and

      TXU USA               means TXU Corp.

1.2    Interpretation

       In these rules, unless the context otherwise requires:

       (a)    words of one gender include the other genders;

       (b)    words importing the singular include the plural and vice versa;

       (c)    reference to a person includes the legal personal representatives,
              successors and assigns of that person and also corporations and
              other entities recognised by law;

       (d)    a reference to the Constitution includes a reference to any
              provision having substantially the same effect which is
              substituted for or replaces the Constitution;

       (e)    references to any law includes that law as amended, re-enacted or
              replaced and any law that supersedes that law;

       (f)    a reference to a "rule" or "these rules" is to the rule or these
              rules (as the case may be) as amended from time to time;

       (g)    headings are for convenience only and do not affect the
              interpretation of these rules;

       (h)    "including" and similar expressions are not and must not be
              treated as words of limitation;

       (i)    if a period of time is specified and dates from a given day or the
              day of an act or event, it is to be calculated exclusive of that
              day; and

       (j)    a reference to a day is to be interpreted as the period of time
              commencing at midnight and ending 24 hours later.

       1.3    Schedules

       The schedules form part of this document.


                                                                       Page 15


<PAGE>


Schedule 2 - Adoption
--------------------------------------------------------------------------------

These Rules were adopted by the directors of TXU Australia Services Pty Ltd, TXU
Electricity Limited and TXU Torrens Island Pty Ltd under a resolution of the
Board of Directors of TXU Australia Services Pty Ltd, TXU Electricity Limited
and TXU Torrens Island Pty Ltd on 21 December 2001 .



(signed) A. Kelly                                            21 December 2001

------------------------                                     ----------------

Secretary                                                     Date















                                                                       Page 16

</TEXT>
</DOCUMENT>
