Exhibit 10.25

 

EMPLOYMENT AGREEMENT

BETWEEN

NEW CENTURY ENERGIES, INC.

AND

PAUL J. BONAVIA

 

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Contents

 

Section 1.

Term of Employment

 

 

Section 2.

Position and Responsibilities

 

 

Section 3.

Executive to Devote Full Time

 

 

Section 4.

Compensation

 

 

Section 5.

Expenses

 

 

Section 6.

Disability

 

 

Section 7.

Termination of Employment

 

 

Section 8.

Compensation Upon Termination

 

 

Section 9.

Offset for Compensation Earned Subsequent to Termination

 

 

Section 10.

Covenants

 

 

Section 11.

Indemnification

 

 

Section 12.

Assignment

 

 

Section 13.

Income Tax

 

 

Section 14.

Dispute Resolution and Notice

 

 

Section 15.

Miscellaneous

 

 

Section 16.

Governing Law

 

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This Employment Agreement is made and entered into this 28 day of September,
1998, and is effective retroactive to December 15, 1997, by and between New
Century Energies, Inc., (hereinafter referred to as “NCE” or, as defined in
Section 12, below, as the “Company”), having its principal offices at 1225 17th
Street, Denver, Colorado, and Paul J. Bonavia (hereinafter referred to as the
“Executive”):

 

WHEREAS, Executive possesses considerable experienced in, and knowledge of, the
electric and natural gas utility industries, and

 

WHEREAS, the Company desires to employ Executive in an executive capacity for
the Company;

 

NOW, THEREFORE, in consideration of the foregoing and of the mutual covenants
and agreements of the parties set forth in this Agreement, and for other good
and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto, intending to be legally bound, agree as
follows:

 

Section 1.  Term of Employment

 

The Company hereby agrees to employ Executive, and Executive herby agrees to
serve the Company, in accordance with the terms and conditions set forth herein,
commencing as of the effective date of this Agreement, as indicated above, and
ending on December 14, 2000, unless earlier terminated as provided herein.

 

Section 2.  Position and Responsibilities

 

Executive shall serve as Senior Vice President and General Counsel of the
Company, or in any other similar executive capacity for the Company, if so
elected by the Board of Directors, and shall report to either the Chief
Executive Officer or Chief Operating Officer of the Company.  Any change in
these terms will be by mutual agreement of the Executive and the Board of
Directors.

 

Section 3.  Executive to Devote Full Time

 

During the term of this Agreement, Executive agrees to devote substantially his
full time, attention, and energies to the Company’s business and shall not be
engaged directly or indirectly in any other business activity, whether or not
such business activity is pursued for gain, profit, or other pecuniary advantage
without prior approval of the Board of Directors, as expressed by formal
resolution.  This prohibition does not include charitable, civic, nonprofit, or
other community service activities, nor shall it be construed as preventing the
Executive from investing assets in such form or manner as will not require his
services in the daily operations of the affairs of the companies in which such
investments are made, or serving as a director of other companies (subject to
the covenants of Section 10 herein).

 

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Section 4.  Compensation

 

4.1                                 Base Salary.                              
The Company shall pay Executive a salary at a rate (hereinafter referred to as
“Base Salary”) that shall be established from time to time by the Board of
Directors of the Company or the Board’s designee; provided, however, that such
Base Salary shall not be less than Two Hundred and Seventy Thousand Dollars
($270,000.00) per year.  This Base Salary shall be paid to Executive in equal
semi-monthly installments throughout the year, consistent with the normal
payroll practices of the Company.  Base Salary shall be reviewed periodically by
the Board of Directors or the Board’s designee following the effective date of
this Agreement, while this Agreement is in force, to ascertain whether in the
judgment of the Board or the Board’s designee, such Base Salary should be
increased (but not decreased).  If so increased, that salary shall become the
Base Salary for all purposes of this Agreement.

 

4.2                                 Incentive Compensation.

 

(a)                                  Annual Bonus.  During the term of this
Agreement, the Executive shall be eligible to participate in the New Century
Energies, Inc. Annual Incentive Plan.  Executive’s annual target bonus potential
shall not be less that forty-five percent (45%) of Base Salary.  Awards under
this Plan may be made in cash or stock, at the election of Executive, and are
conditioned upon the attainment of certain goals established by Company
management and approved by the Compensation Committee of the Board.  In
addition, upon the commencement of Executive’s employment with the Company,
Executive shall receive a guaranteed award of $20,000 under the Annual Incentive
Plan for the plan year 1997, payable not earlier than January 5, 1998.  This is
in addition to Executive’s actual participation in the Plan for the month of
December 1997.

 

(b)                                 Long Term Incentive Plan.  Executive will
participate in the New Century Energies, Inc., Long Term Incentive Plan with a
target award of not less than 65% of Base Salary.  As currently designed,
two-thirds of the awards under this Plan are provided through the issuance of
non-qualified stock options and the remaining one-third is provided through a
Value Creation Plan Executive’s initial stock option grant under this Plan is
88,000 share of New Century Energies, Inc. stock, which shall vest on December
15, 1998.  This grant covers the years 1998, 1999, and 2000.  The grant price
will be the fair market value (the closing price) of New Century Energies Inc.,
common stock on December 15, 1997.  The Company reserves the right to amend or
modify the design of the Long Term Incentive Plan subject to approval of the
Compensation Committee.

 

4.3                                 Executive
Benefits.                                           The Company shall provide to
the Executive all benefits which other officers and employees of the Company are
entitled to receive, as commensurate with the Executive’s position, pursuant and
subject to the terms and conditions of all then applicable plans.  Such benefits
shall include, but not be limited to, group term life insurance, comprehensive
health and major medical insurance, long-term disability, accidental death and
dismemberment insurance, travel accident insurance, and

 

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participation in any supplemental benefit plans (including a supplemental
executive retirement plan), employee savings plans, supplemental savings plan,
all employee welfare benefit plans, and employee pension benefit plans.

 

4.4                                 Supplemental Retirement
Benefit.                Executive shall be entitled under this Agreement to a
supplemental retirement benefit.  Assuming full vesting and accrual, such
benefit shall be equal each year to fifty-five percent (55%) of Executive’s
Annual Compensation, minus any benefit received by Executive in that year
pursuant to any Company qualified retirement plan, Company SERP Plan, or Social
Security.  “Annual Compensation” is defined as the average of the highest three
of Executive’s last five years of both annual Base Salary and annual incentives
earned in the corresponding year.  The Company may modify its salary and
incentive compensation structure after the date hereof, provided that no such
modification shall have the effect of reducing the monetary value of Executive’s
benefit under this Section.  So long as Executive shall be employed by the
Company, the benefit shall accrue at the rate of five percent (5%) of Annual
Compensation per year of service, to reach fifty-five (55%) of Annual
Compensation not later than December 15, 2008.  The benefit shall become one
hundred percent (100%) vested in December 15, 2002, or upon a Change in Control
as that term is defined in the Change in Control Agreement, whichever occurs
earlier.  Yearly benefit payments shall commence at age 60 or at separation from
service, whichever occurs later.  The benefit shall be funded in a mutually
acceptable manner through a rabbi trust or other funding vehicle.

 

4.4A                       SERP Plan.                                     
Executive shall be participant in the Supplemental Executive Retirement Plan for
key management employees, which may be amended or revised from time to time by
the Company (“SERP Plan”).  Terms and conditions applicable to any benefit to
which Executive may be entitled thereunder shall be governed by the SERP Plan
documents.

 

4.5                                 Executive Life Insurance.           The
Company shall provide Executive with a life insurance policy with a death
benefit equal to 400% of Base Salary if death occurs during employment, and
equal to 200% of final Base Salary if death occurs during retirement.

 

4.6                                 Paid Time Off.                     Executive
shall be entitled each calendar year to paid vacation in accordance with the
standard vacation policy of the Company with regard to vacations of Executive
Officers.  Executive shall receive a sick leave accrual according to standard
Company policy with regard to sick leave for Executive Officers as of the date
hereof.

 

4.7                                
Perquisites.                                  The Company shall provide to
Executive at the Company’s cost, all perquisites to which other officers of the
Company are entitled.  The Company also shall provide such other perquisites
which are suitable to the character of Executive’s position with the Company and
adequate for the performance of his duties hereunder, including, but not limited
to: (i) a monthly flexible perquisite allowance of $750.00; (ii) an annual
allowance for financial/estate planning and tax preparation of

 

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$3,500.00; (iii) an annual medical examination at the Company’s expense; and
(iv) a furnished executive office and a full-time secretary located at the
Company’s corporate headquarters.  Executive shall likewise have the benefit of
any additional benefits, as may be established during the term of this
Agreement, by written policy of the Company.

 

4.8                                 Participation in Programs.        In
addition, and without limiting the generality of the foregoing, during the term
hereof:  (A) the Executive shall be entitled to participate in all applicable
incentive, savings and retirement plans, practices, policies and programs of the
Company and its affiliates to the same extent as other senior executives of the
Company; and (B) the Executive and/or the Executive’s family, as the case may
be, shall be eligible for participation in, and shall receive all benefits
under, all applicable welfare benefit plans, practices, policies and programs
provided by the Company and it affiliates, other than severance plans,
practices, policies and programs but including, without limitation, medical,
prescription, dental, disability, sick leave, employee life insurance, group
life insurance, accidental death and travel accident plans and programs, to the
same extent as other senior executives of the Company.

 

4.9                                 Modifications to
Programs.                                               Sections 4.2, 4.3, 4.4A,
and 4.5 herein refer to plans or programs in effect or under consideration as of
the date hereof.  By reason of such sections, the Company shall not be obligated
to institute, maintain, or refrain from changing, amending, or discontinuing any
benefit plan, program, or perquisite, so long as such changes are similarly
applicable to the Company’s senior executive employees generally.  However,
notwithstanding any change or amendment to, discontinuance of, or benefit
limitation set forth in any plan or program, Executive shall be entitled under
this Agreement (a) during Executive’s term of employment under this Agreement,
to incentive compensation opportunities at least equal in monetary value to
those provided for in Section 4.2, above, and (b) during and after Executive’s
term of employment, to the supplemental retirement benefit as provided in
Section 4.4, above.

 

Section 5. Expenses

 

5.1                                 Moving and Relocation Expenses.          The
Company shall pay, or reimburse Executive, for reasonable and necessary moving
and relocation expenses incurred in the relocation of Executive’s principal
residence, in accordance with the Company’s existing relocation policy.

 

5.2                                 Ongoing
Expenses.                                         The Company shall pay, or
reimburse Executive in accordance with Company policies, for all ordinary and
necessary expenses, in a reasonable amount, which Executive incurs in performing
his duties under this Agreement, including, but not limited to travel,
entertainment, professional dues and subscriptions, and all dues, fees, and
expenses associated with membership in various professional, business, social,
and civic associations and societies in which Executive’s participation is in
the best interests of the Company.

 

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Section 6.                                            Disability

 

6.1                                 Long Term
Disability.                             The Company will provide to the
Executive benefits pursuant and subject to the terms and conditions of the Long
Term Disability Plan then in effect.

 

Section 7.                                            Termination of Employment

 

7.1                                 Termination for Good Reason.    “Good
Reason” means the occurrence, on or after the date of a Change in Control (as
that term is defined in the Change in Control Agreement between Paul J. Bonavia
and New Century Energies, Inc., effective December 15, 1997, referred to in this
Agreement as the “Change in Control Agreement”) and which is Executive’s written
consent, of any of the following events or circumstances, as determined in good
faith by Executive:

 

(a)                                  A reduction in executive’s base salary in
effect immediately prior to the Change in Control.

 

(b)                                 A material reduction in Executive’s target
opportunity, measured as a percentage of base salary, to earn annual or
long-term incentives or bonuses.

 

(c)                                  A failure to provide to Executive employee
benefits and perquisites (other than amounts described in subsection (a) and
(b)) which are reasonably equivalent in the aggregate to those provided to
Executive immediately prior to the Change in Control.

 

(d)                                 A material reduction by NCE of Executive’s
job duties and responsibilities that existed immediately prior to the Change in
Control, including but not limited to the assignment to Executive of duties and
responsibilities which are materially inconsistent with those of Executive’s
position immediately prior to the Change in Control.

 

(e)                                  Assignment or reassignment of Executive to
another place of employment that is more than 50 miles (measured by the shortest
paved highway route) from Executive’s place of employment immediately prior to
the Change in Control.

 

(f)                                    A failure by NCE to pay to Executive when
due any deferred compensation that was deferred by Executive prior to the Change
in Control.

 

(g)                                 A failure by NCE to comply with the terms
and conditions of this Agreement.

 

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Notwithstanding the foregoing:

aa)                                An event or circumstance shall not constitute
Good Reason unless Executive provides written notice to NCE specifying the basis
for Executive’s determination that Good Reason exists within six months after
the first day on which such Good Reason existed.  If NCE cures the event or
circumstance within 30 days of receiving such written notice (including
retroactive restoration of any lost compensation or benefits, where reasonably
possible), Good Reason shall be deemed never to have existed.

 

bb)                              NCE and Executive may, upon mutual written
agreement waive any provision of this Section which would otherwise constitute
Good Reason.

 

7.2                                 Termination by Notice.                     
Either the Company or the Executive may terminate this Agreement without cause
by delivering proper written notice to the other party, as follows:

 

(a)                                  Notice by
Executive.                                   Executive may terminate this
Agreement at any time by giving the Company’s Board of Directors a minimum of
ninety (90) days’ prior written notice of his intent to terminate.  In such
case, the Company shall pay Executive his full Base Salary through the ninety
(90) day period, with the termination being effective on whatever date during
that period is designated by the Board of Directors, but in any event not later
than the last day of the ninety (90) day period.  As of the last day of the
ninety (90) day period.  Executive shall forfeit all rights and benefits (other
than vested benefits) he would otherwise have been entitled to receive under
this Agreement (including, if applicable, the Executive’s annual expected target
bonus for that year).  The Company and Executive thereafter shall have no
further obligations under this Agreement.

 

(b)                                 Notice by the Company.               The
Company may terminate this Agreement at any time by the Board of Directors
giving Executive written notice of the Company’s intent to terminate.  Subject
to the consulting requirements of Section 8 herein, Executive’s obligation to
serve the Company, and the Company’s obligation to employ Executive under the
terms of this Agreement shall terminate simultaneously on the date specified in
the written notice, and the Executive shall receive those benefits specified in
Section 8 herein.

 

7.3                                 Termination for Cause.                      
Nothing in this Agreement shall be construed to prevent the Company’s Board of
Directors from terminating Executive’s employment under this Agreement for
cause.  “Termination for cause” shall have the same definition herein as the
term “Discharge for Cause” in the Change in Control Agreement.

 

In the event this Agreement is terminated by the Company for cause, the Company
shall pay Executive his full Base Salary through the date of termination, and
Executive shall immediately thereafter forfeit all rights and benefits (other
than vested benefits) he would otherwise have been entitled to receive under
this Agreement

 

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(including, if applicable, the Executive’s annual expected target bonus for that
year).  The Company and Executive thereafter shall have no further obligations
under this Agreement, except as set forth in Section 15.6.

 

7.4                                 Termination After a Change in Control.    In
the event of a Change in Control (as defined in Executive’s Change in Control
Agreement), the Executive shall be entitled to the greater of:  (a) the payments
he would otherwise be entitled to receive for the remaining term of employment
under this Agreement; or (b) those payments provided for under the Change in
Control Agreement.  If it is determined that payments will be made pursuant to
this Agreement following a Change in Control, the executive shall be entitled to
tax-free reimbursements of any excise taxes that may arise as a result of such
payments.

 

Section 8.                                            Compensation Upon
Termination

 

In the event this Agreement is terminated for Good Reason (as provided in
Section 7.1 herein) or by notice by the Company as provided in Section 7.2 (b)
herein, the Company shall continue the Executive’s total compensation package
for the remaining term of this Agreement which shall constitute the following
amounts upon the effective date of such termination, or as otherwise specified:

 

(a)                                  Executive’s annual Base Salary (as stated
in Section 4.1 herein and adjusted by the Board from time to time), continued
for the remaining term of this Agreement, paid to the Executive in equal
semi-monthly installments consistent with the normal payroll practices of the
Company;

 

(b)                                 For annual incentive plans(s) in place and
operational on the date of termination, the greater of target or actual bonus
paid for the year in which employment termination occurs, as provided in the
annual incentive plan and subject to the authority of the Board under such plan,
continued for the remaining term of this Agreement;

 

(c)                                  For long-term incentive plans(s) in place
and operational on the date of termination, an immediate vesting of all
outstanding long-term incentive awards held by the Executive, plus the economic
equivalent value of any long-term incentive awards the Executive would have
received had the Executive remained employed for the remaining term of this
Agreement, as provided in the long-term incentive plan and subject to the
authority of the Board under such plan;

 

(d)                                 For the supplemental retirement benefit
provided for in Section 4.4 and the SERP Plan (or any successor plan) in place
and operational on the date of termination, payment, in accordance with the
terms of the plan, of the Executive’s accrued benefits, vested or otherwise;
plus, Executive shall receive credit for such additional years of service under
this Agreement at the time of termination;

 

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(e)                                  For the Supplemental Savings Plan (or any
successor plan) in place and operational on the date of termination, payment, in
accordance with the terms of the plan, within thirty (30) days of termination,
of the Executive’s account balances therein; plus credit for the maximum
additional Company contributions the Executive would have been entitled to
receive had the Executive remained employed for the remaining term of this
Agreement;

 

(f)                                    For welfare benefit plan(s) in place and
operational on the date of termination, Executive shall receive full benefit
coverage for the remaining term of this Agreement;

 

(g)                                 For all qualified retirement plans in place
and operational on the date of termination, Executive shall receive, by direct
payment from the Company, the present value of the benefits that would have been
paid under the qualified plans if the Executive had received credit for
additional years of service equal to the number of years remaining under this
Agreement at the time of termination; plus the maximum Company matching
contributions and accruals under any such retirement plans Executive would have
been entitled to receive had his employment continued for the remaining term of
this Agreement; and

 

(h)                                 For all perquisite programs in place and
operational on the date of termination, Executive shall receive full perquisites
for the remaining term of this Agreement.

 

As consideration for the continuation of the above-stated benefits, Executive
agrees to make himself available during the remaining term of the Agreement, at
reasonable times and location, to the Company and/or to the successor to his
position at the Company, to provide consulting advice (as requested).

 

Section 9.  Offset for Compensation Earned Subsequent to Termination

 

In the event this agreement is terminated for good reason (as provided in
Section 7.1 herein) or by notice by the Company as provided in Section 7.2
herein, the continuation of the Executive’s Base Salary (as provided in Section
8(a) herein), any annual incentive award, if applicable (as provided in Section
8(b) herein), long-term incentive plan(s) awards, if any (as provided in Section
8(c) herein), the SERP Plan and supplemental retirement benefit, if any (as
provided in Section 8(d) herein), and the Supplemental Savings Plan, if any (as
provided in Section 8(e) herein), shall not be offset by compensation earned
from a subsequent employer during the remaining term of employment under this
Agreement.

 

Section 10.  Covenants

 

10.1                           Non-competition.   Without the prior written
consent of the Company, for the greater of twenty-four (24) months following the
termination of Executive’s employment under Section 7 of this Agreement, or the
remaining term of employment under this Agreement, the Executive shall not, as a
shareholder, employee, officer,

 

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director, partner, consultant, or otherwise, engage directly or indirectly in
any business or enterprise which is “in competition” with the Company or its
successors or assigns.

 

A business or enterprise is deemed to be “in competition” if it is engaged in
the business of generation, purchase, transmission, distribution, or sale of
electricity, or in the purchase, transmission, distribution, sale or
transportation of natural gas, within the states of Colorado, Wyoming or Texas.

 

10.2                           Disclosure of Information.     Executive
recognizes that he will have access to and knowledge of certain confidential and
proprietary information of the Company and its subsidiaries which is essential
to the performance of his duties under this Agreement.  Executive will not,
during or after the term of his employment by the Company, in whole or in part,
disclose such information to any person, firm, corporation, association, or
other entity for any reason or purpose whatsoever, nor shall he make any use of
any such information for his own purposes.

 

10.3                           Covenants Regarding Other
Employees.                           For the greater of twenty-four (24) months
following a termination under Section 7 of this Agreement, or the remaining term
of employment under this Agreement, the Executive agrees not to induce any
employees of the Company to terminate their employment, accept employment with
anyone else, or to interfere in a similar manner with the business of the
Company.

 

Section 11.  Indemnification

 

The Company hereby covenants and agrees to indemnify and hold harmless Executive
fully, completely, and absolutely against, and in respect to any and all
actions, suits, proceedings, claims, demands, judgments, costs, expenses
(including attorneys’ fees), losses, and damages resulting from Executive’s good
faith performance of his duties and obligations under the terms of this
Agreement.

 

Section 12.  Assignments and Successors

 

This Agreement shall be binding upon and shall inure to the benefit of any
successor to or assign of NCE.  The term “Company” as used in this Agreement is
defined as NCE and any successor or assign.  The term “successor” is defined to
include any person, firm, corporation or entity which at any time and by any
means, directly or indirectly (a) merges or consolidates with NCE; (b) acquires
all or the majority of NCE’s voting shares or assets; or (c) obtains control of
NCE, its voting shares, assets or business activities.  NCE (if it should
continue to exist following the occurrence of any such event) shall remain
jointly and severally liable for all of its obligations hereunder.

 

Except as herein provided, this Agreement may not be assigned by the Company
without the written consent of the Executive.

 

This Agreement shall inure to the benefit of, and be enforceable by, Executive’s
personal or legal representatives, executors, and administrators, successors,
heirs,

 

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distributees, devises and legatees.  If Executive should die while any amounts
payable to Executive hereunder remain outstanding, all such amounts, unless
otherwise provided herein, shall be paid in accordance with the terms of this
Agreement to Executive’s devisee, legatee, or other designee or, in the absence
of such designee, the Executive’s estate.

 

Other than a transfer by reason of death, the rights and duties of Executive
hereunder are personal and may not be assigned or transferred.

 

Section 13.  Income Tax

 

The Company may withhold, from any benefits payable under this Agreement, all
federal, state, city or other taxes as may be required pursuant to any law or
governmental regulation or ruling.

 

Section 14.  Dispute Resolution and Notice

 

14.1                           Dispute
Resolution.                                      The parties agree that any
dispute or controversy arising under or in connection with this Agreement shall
be submitted to arbitration as the exclusive forum; provided that if a party
gives notice to the other party of his or its desire that the arbitration
hearing be held forthwith and a hearing is not conducted within ninety (90) days
following said notice, the party having given such notice may initiate
litigation, in which case the Court’s jurisdiction shall supersede and replace
that of the arbitrators.  The arbitrators shall have all powers of a court to
grant legal or equitable relief to remedy any breach of this Agreement.

 

Arbitration proceedings shall be conducted before a panel of three (3)
arbitrators sitting in a location selected by the Executive within fifty (50)
miles from the location of his principal place of employment, in accordance with
the rules of the American Arbitration Association then in effect.  Judgment may
be entered on the award of the arbitrators in any court having competent
jurisdiction.

 

The arbitrators’ fees shall be divided and paid equally by Executive and the
Company.  Executive and the Company shall pay his/its own costs and attorneys’
fees, if any, in the arbitration proceedings, preliminary and ancillary
proceedings, and any court proceedings to enforce or vacate an arbitration
award, provided that if Executive recovers through such action some amount or
benefit (regardless of size or value) in excess of what NCE had offered prior to
commencement of the proceeding, NCE will pay or reimburse Executive for all
arbitration expenses, costs and attorney’s fees.

 

14.2                           Notice.          Any notices, requests, demands
and other communications provided for by this Agreement be sufficient if in
writing and if sent by registered or certified mail to Executive at the last
address he has filed in writing with the Company or, in the case of the Company,
at its principal executive offices.

 

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Section 15.                                      Miscellaneous

 

15.1                           Waiver.      A waiver of any breach of this
Agreement, or a failure to enforce any provision hereof, shall not be a waiver
of any subsequent breach of the Agreement.

 

15.2                           Modification.                        This
Agreement shall not be varied, altered, modified, canceled, changed, or in any
way amended except by mutual agreement of the parties in a written instrument
executed by the parties hereto or their legal representatives.

 

15.3                           Severability.                              In the
event that any provision or portion of this Agreement shall be determined to be
invalid or unenforceable for any reason, the remaining provision of this
Agreement shall be unaffected thereby and shall remain in full force and effect.

 

15.4                           Integration
Clause.                                           This Agreement and the Change
in Control Agreement set forth the complete agreement between the parties, and
supersede all prior statements, stipulations, representations, promises, or
agreements, if any, between the parties.  No other consideration, other than
that set forth in this Agreement and the Change in Control Agreement is due
between the parties.

 

15.5                           Counterparts.                       This
Agreement may be executed in one (1) or more counterparts, each of which shall
be deemed to be an original, but all of which together will constitute one (1)
and the same Agreement.

 

15.6                           Survival of Obligations According to Their
Terms.                     The provisions of Sections 4.4, 4.9, 8, 9, 10, 11,
12, 13 and 14 shall survive the termination of this Agreement for any reason,
whether such termination is by NCE, by Executive, or otherwise, and shall
survive the expiration of Executive’s term of employment.  Such obligations
shall continue thereafter in full force and effect.

 

15.7                           No Attachment.  Except as required by law, no
right to receive payments under this Agreement shall be subject to anticipation,
commutation, alienation, sale, assignment, encumbrance, charge, pledge or
hypothecation or to execution, attachment, levy or similar process or assignment
by operation of law, and any attempt, voluntary or involuntary, to effect such
action shall be null, void and of no effect.

 

Section 16.                                      Governing Law

 

This Agreement shall be construed and enforced in accordance with the laws of
the State of Colorado.  The parties understand and intend that this Agreement is
a fully enforceable contract and not a benefit plan within the meaning of ERISA.

 

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IN WITNESS WHEREOF, Executive has executed, and the Company (pursuant to a
resolution adopted at a duly constituted meeting of its Board of Directors) has
executed this Agreement, effective as December 15, 1997.

 

 

ATTEST:

NEW CENTURY ENERGIES, INC.

 

 

 

 

/s/ Cathy Hart

 

/s/ Wayne H. Brunetti

 

By: Cathy Hart

By:

 

 

lts: Corporate Secretary

Its:

 

 

 

 

 

 

 

EXECUTIVE

 

 

 

 

 

/s/ Paul J. Bonavia

 

 

Paul J. Bonavia

 

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Amendment One to Employment Agreement Between New Century Energies, Inc.

and Paul J. Bonavia

 

This Amendment One to the Employment Agreement Between New Century Energies,
Inc. and Paul J. Bonavia, effective December 15, 1997, is effective as of the
date described below.  The employment agreement, as amended, will be referred to
as the “Agreement”.

 

WHEREAS, New Century Energies, Inc. has completed a Merger, pursuant to which
the surviving corporation, Xcel Energy, Inc., has succeeded to all rights and
obligations under the Agreement.  The term “Company” will hereafter mean Xcel
Energy, Inc.; and

 

WHEREAS, at the Company’s direction, Executive ceased to serve as either the
Company’s Senior Vice President and General Counsel or President of its
International Business Unit as of the Effective Time; and

 

WHEREAS, as of the Effective Time, the Company requested Executive to serve as
President of its Energy Markets Business Unit pursuant to terms set forth in a
letter attached hereto as Exhibit A;

 

NOW THEREFORE, in consideration of the mutual promises set forth herein, the
parties hereby amend the Agreement as follows:

 

1.                                       Section 17 is added, which provides:

 

Section 17.  Definitions.  For all purposes of this Agreement, the following
terms shall have the following respective meanings:

 

17.1                           Determination.                  A decision made
by Executive in his sole discretion, after consultation with the Chief Executive
Officer, concerning the items set forth in paragraph 1 of Section 4.4B of this
Agreement.

 

17.2                           Determination
Date.                                      January 6, 2003.

 

17.3                           Development Objective.   Development of the Xcel
Energy marketing organization into a multi-regional energy merchant by having
implemented one of the following means; (a) joining a consortium of energy
marketing organizations; (b) acquiring other energy marketing organizations; or
(c) building such attributes internally.

 

17.4                           Diminished.                                
Materially and adversely diminished in comparison to the duties and
responsibilities enjoyed by the Executive on the effective date of the Merger
Agreement, within the meaning of Section 4.2(a)(iii) of the Severance Policy.

 

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

 

17.5                           Effective Time.                 The Effective
Time of the Merger, as defined in the Merger Agreement.

 

17.6                           Integration.                                 
Combination of the existing NSP and NCE energy marketing organization (excluding
NRG Energy, Inc.) to create one Xcel energy marketing organization with
principal operations in one location and one set of processes for trading, risk
management and reporting, financial reporting and back office functions.

 

17.7                           Merger.   The merger contemplated by the Merger
Agreement.

 

17.8                           Merger
Agreement.                                        This Agreement and Plan of
Merger by and between Northern States Power Company (“NSP”) and New Century
Energies, Inc. (“NCE”), dated as of March 24, 1999.

 

17.9                           Severance Policy.  The Xcel Energy Senior
Executive Severance Policy, effective as of the Effective Time.

 

2.                                       Section 2 is amended to provide:

 

Executive shall serve as President of the Company’s Energy Markets Business Unit
or in any other capacity which the Company, in its sole discretion, may direct
and shall report to the Chief Executive Officer.

 

3.                                       Section 4.4B is added, which provides:

 

4.4B                         Separation Benefits.  Executive agrees that,
notwithstanding any changes to his duties and responsibilities which the Company
in its sole discretion has made or might make, he will not assert at any time
before the Determination Date that his duties and responsibilities have been
Diminished.  In consideration of such agreement and the other agreements
contained herein, the Company agrees to pay Executive separation benefits under
this Agreement upon the occurrence or satisfaction of all of the following
conditions:

 

1.                                       Executive shall have made a
Determination that, as of the Determination Date (a) integration of the NSP and
NCE energy marketing organizations has been satisfactorily accomplished; and (b)
either the Development Objective has not been satisfactorily accomplished or it
has been satisfactorily accomplished but Executive has not been employed on
mutually acceptable terms to head the organization or consortium designated to
perform the larger role created by the Development Objective;

 

2.                                       During the period commencing on the
Determination Date and ending at the close of the seventh business day
thereafter, Executive shall have given written notice of the Determination and
the consequent termination of his employment; and

 

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

 

3.                                       Executive shall have executed and not
revoked a release agreement substantially in the form described in the Severance
Policy.

 

The separation benefits to which Executive shall be entitled hereunder will be
calculated determined and paid in accordance with the provisions of Section 4.3,
4.4, 4.5, 4.6 and Schedule I of the Severance Policy.

 

Notwithstanding any other provision of this Agreement or any other plan,
program, practice or policy of the Company or its predecessors or successors,
any cash Separation Benefits that Executive becomes entitled to receive under
Section 4.4B of this Agreement, shall be reduced (but not below zero) by the
aggregate amount of cash severance, separation, Change in Control or similar
benefits that the Executive may be entitled to receive under any other plan,
program, policy, contract, agreement or arrangement of the Company, its
predecessors or successors (including without limitation the Xcel Senior
Executive Severance Policy), except to the extent the Executive waives his right
thereto.

 

4.                                       Section 4.9 is amended to provide:

 

Sections 4.2, 4.3, 4.4A, 4.4B, and 4.5 herein refer to plans or programs in
effect as of the Effective Time, by reason of such sections, the Company shall
not be obligated to institute, maintain, or refrain from changing, amending or
discontinuing any benefit plan, program or perquisite, so long as such changes
are similarly applicable to the Company’s senior executive employees generally. 
However, notwithstanding any change or amendment to, discontinuance of, or
benefit limitation set forth in any plan or program, Executive shall be entitled
under this Agreement (a) during Executive’s term of employment under Section 1
of this Agreement, to incentive compensation opportunities at least equal in
monetary value to those provided for in Section 4.2 above, and (b) during and
after such term of employment to the supplemental retirement benefit as provided
in Section 4.4 above, and separation benefits as provided in Section 4.4B,
above.

 

5.                                       Section 15.6 is amended to provide:

 

The provisions of Section 4.4, 4.4B, 4.9, 8, 9, 11, 12, 13, 14, and 17 shall
survive the termination of this Agreement for any reason, whether by the
Company, by Executive, or otherwise, and shall survive the expiration of
Executive’s term of employment.  Such obligations shall continue thereafter in
full force and effect.

 

6.                                       All other terms and provisions of this
Agreement remain in full force and effect, without modification.  Except as
expressly stated herein, Executive reserves all rights arising under law, under
any agreement, plan or policy (including but not limited to the Severance
Policy), or otherwise.

 

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

 

IN WITNESS WHEREOF, the parties have executed this Amendment One to the
Agreement, effective as of the Effective Time of the Merger.

 

 

ATTEST:

XCEL ENERGY, INC.

 

 

 

 

By:

/s/ Cathy Hart

 

By:

/s/ Wayne H. Brunetti

 

 

Cathy Hart, Corporate Secretary

 

Wayne H. Brunetti, President and CEO

 

 

 

 

 

EXECUTIVE

 

 

 

 

 

/s/ Paul J. Bonavia

 

 

Paul J. Bonavia

 

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

 

Amendment Two to Employment Agreement Between Xcel Energy Inc.

and Paul J. Bonavia

 

This Amendment One to the Employment Agreement (“Agreement”) between Xcel
Energy, Inc. as successor employer to New Century Energies, Inc. and Paul J.
Bonavia (“Participant”).  Said Agreement was first effective December 15, 1997,
and later amended with the First Amendment thereto, and is now amended with the
following Amendment Two:

 

1.                                       Section
17.2                                Determination Date, is hereby amended by
substituting “January 13, 2003” for “January 6, 2003” as it appears therein.

 

IN WITNESS WHEREOF, the parties have executed this Amendment Two to the
Agreement, effective as of the Effective December 31, 2002.

 

 

ATTEST:

XCEL ENERGY, INC.

 

 

 

 

By:

 

 

By:

/s/ Wayne H. Brunetti

 

lts:

 

 

 

Wayne H. Brunetti

 

 

President and CEO

 

 

 

 

 

EXECUTIVE

 

 

 

 

 

/s/ Paul J. Bonavia

 

 

Paul J. Bonavia

 

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

 

Amendment Three to Employment Agreement Between Xcel Energy, Inc.

and Paul J. Bonavia

 

This Amendment Three to the Employment Agreement Between Xcel Energy, Inc. (as
successor to New Century Energies, Inc.) and Paul J. Bonavia, effective as of
January 6, 2003.  The employment agreement, as amended, will be referred to as
the “Agreement”.

 

WHEREAS, Executive has made a Determination pursuant to Section 4.4B.1 of the
Agreement that, as of the Determination Date, integration of the NSP and NCE
energy marketing organizations has been satisfactorily accopmplished and the
Development Objective has not been satisfactorily accomplished; and

 

WHEREAS, the Company has asked Executive to continue in its employ through
August 31, 2003, notwithstanding such Determination, and Executive has agreed to
do so; and

 

WHEREAS, the Company hereby waives the conditions set forth in Section 4.4B.2;

 

NOW THEREFORE, in consideration of the mutual promises set forth herein, the
parties hereby amend the Agreement as follows:

 

1.                                       The first sentence of Section 4.4B is
amended to provide:

 

4.4B                         Separation
Benefits.                                     Executive agrees that,
notwithstanding any changes to his duties and responsibilities which the Company
in its sole discretion has made or might make, he will not assert at any time
that his duties and responsibilities have been Diminished.

 

2.                                       Section 4.4C is added, which provides:

 

4.4C                         Entitlement to Separation Benefits.    The parties
agree that the conditions of Section 4.4B.1 and 4.4B.2 have been satisfied or
waived.  The Company will pay Executive separation benefits pursuant to Section
4.4B as set out in Attachment 1, adjusted for inflation from January 6, 2003,
if:  (a) Company terminates Executive’s employment at any time for any reason
other than for Cause, as defined in Section 4.2(b) of the Severance Policy; or
(b) Executive terminates his employment at any time after August 31, 2003.  In
either event, payment is conditioned on Executive executing and not revoking a
release agreement in accordance with Section 4.4B.3.

 

3.                                       The first sentence of Section 15.6 is
amended to provide:

 

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

 

The provisions of Sections 4.4, 4.4B, 4.4C, 4.9, 8, 9, 11, 12, 13, 14 and 17
shall survive the termination of this Agreement for any reason whether by the
Company, by Executive, or otherwise, and shall survive the expiration of
Executive’s term of employment.

 

4.                                       All other terms and provisions of this
Agreement remain in full force and effect, without modification.

 

IN WITNESS WHEREOF, the parties have executed this Amendment Three to the
Agreement.

 

 

ATTEST:

XCEL ENERGY, INC.

 

 

 

 

By:

/s/ Cathy Hart

 

By:

/s/ Wayne H. Brunetti

 

 

Cathy Hart, Corporate Secretary

 

Wayne H. Brunetti

 

 

President and CEO

 

 

 

 

 

EXECUTIVE

 

 

 

 

 

/s/ Paul J. Bonavia

 

 

Paul J. Bonavia

 

 

 

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

 

ATTACHMENT I

 

Paul Bonavia

Termination Date: January 7, 2003 – Through – July 7, 2005

Salary = $385,000

 

 

 

2.5X Package

 

 

 

 

 

2.5 years of Base Salary

 

$

962,500

 

 

 

 

 

2.5 years of Annual Incentive

 

$

657,300

 

 

 

 

 

2.5 years of Long Term Incentives

 

$

1,585,938

 

 

 

 

 

2003 Prorated Annual Incentive Award

 

$

3,473

 

 

 

 

 

2003 Prorated Long Term Incentives

 

$

10,404

 

 

 

 

 

2.5 years of 401(k) Match

 

$

36,458

 

 

 

 

 

2.5 years of Pension Credit

 

$

60,950

 

 

 

 

 

2.5 years of SERP Credit

 

$

657,611

 

 

 

 

 

2.5 years of Perquisite (car) Allowance

 

$

45,000

 

 

 

 

 

 

Severance Lump Sum Sub Total

 

$

4,019,633

 

 

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