Document:

Exhibit
10.01

 

UNITED STATES
DISTRICT COURT

 

DISTRICT
OF MINNESOTA

 

	
  In Re Xcel Energy, Inc., Securities, Derivative

  	
   

  	
  Master File: Civil 02-2677 (DSD/FLN)

  
	
  & “ERISA” Litigation

  	
   

  	
  MDL No. 1511

  
	
   

  	
   

  	
   

  
	
  This document relates to Case Nos. 02-2677, 02-2774,
  02-2787, 02-2832, 02-2889, 02-2921, 02-2933, 02-3053, 02-3508, 02-3574,
  02-3715, 02-3755, and 02-3798, the Securities Actions.

  	
   

  	
   

  

 

SECURITIES LITIGATION

 

SETTLEMENT AGREEMENT

 

 

TABLE
OF CONTENTS

 

	
  I. 

  	
  DESCRIPTION
  AND HISTORY OF THE ACTION

  	
   

  
	
   

  	
   

  	
   

  
	
  II.

  	
  BENEFITS
  OF SETTLEMENT TO THE SETTLEMENT CLASS

  	
   

  
	
   

  	
   

  	
   

  
	
  III.

  	
  THE
  SETTLING DEFENDANTS’ REASONS FOR SETTLEMENT

  	
   

  
	
   

  	
   

  	
   

  
	
  IV.

  	
  THE
  SETTLING DEFENDANTS’ DENIALS OF WRONGDOING

  	
   

  
	
   

  	
   

  	
   

  
	
  V. 

  	
  TERMS OF THE AGREEMENT

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  A.

  	
  Definitions

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  B.
  

  	
  The
  Court’s Order Preliminarily Approving the Settlement

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  C.
  

  	
  Judgment
  To Be Entered by the Court Approving the Settlement

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  D. 

  	
  Escrow Agreement

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  E. 

  	
  Settlement Fund

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  F. 

  	
  Notice Fund

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  G.
  

  	
  Supervision
  and Distribution of the Settlement Fund

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  H. 

  	
  The Fee and Expense
  Petition

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  I.
  

  	
  Conditions
  of Settlement; Effect of Disapproval, Cancellation and Termination

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  J.

  	
  Miscellaneous Provisions

  	
   

  

 

ii

 

EXHIBITS

 

	
  Exhibit A:

  	
   

  	
  Order Preliminarily Approving Settlement

  
	
   

  	
   

  	
   

  
	
  Exhibit A-1:

  	
   

  	
  Notice of Class Action Determination, Proposed
  Settlement, and Hearing on Settlement

  
	
   

  	
   

  	
   

  
	
  Exhibit A-2:

  	
   

  	
  Summary Notice of Class Action Settlement

  
	
   

  	
   

  	
   

  
	
  Exhibit A-3:

  	
   

  	
  Proof of Claim Form and Release

  
	
   

  	
   

  	
   

  
	
  Exhibit B:

  	
   

  	
  Order for Final Judgment

  
	
   

  	
   

  	
   

  
	
  Exhibit C:

  	
   

  	
  Escrow Agreement

  
	
   

  	
   

  	
   

  
	
  Exhibit D:

  	
   

  	
  Tax Election Statement

  

 

iii

 

SETTLEMENT
AGREEMENT

 

This Settlement Agreement (“Agreement”) is made as of
December 31, 2004, by and among the following parties (as defined in this
Agreement in Paragraph V (A)): (1) the Representative Plaintiffs, by and
through Plaintiffs’ Co-Lead Counsel on behalf of Class Counsel in the Action;
and (2) Xcel Energy, Inc. and the Individual Defendants, by and through their
attorneys in the Action.

 

I.              DESCRIPTION
AND HISTORY OF THE ACTION

 

Beginning on or about July 31, 2002, a series of
fourteen complaints was filed in the United States District Court for the
District of Minnesota on behalf of proposed classes of securities holders. The
complaints generally alleged that defendants Xcel Energy, Inc. and certain
current and former officers and directors of Xcel and also of Xcel’s troubled
then-subsidiary, NRG Energy, Inc. (“NRG”) violated the federal securities laws
by making misstatements regarding Xcel’s business and prospects, including,
among other things, by not properly disclosing (i) certain assertedly improper
energy trading practices that had the claimed effect of boosting reported
revenue, and (ii) the terms and conditions of Xcel’s revolving credit agreements,
in particular that those agreements contained cross-default provisions tying
Xcel’s access to credit to the financial fortunes of NRG, and similarly
connecting NRG’s financial health and expectations to Xcel’s credit
circumstances. As a result of these misstatements, the complaints alleged, the
price of Xcel common stock and NRG Senior Notes was artificially inflated,
causing damages to the members of the proposed classes. 

 

1

 

On November 13, 2002, the Court entered an order
consolidating the securities cases for all purposes and appointing the “CHIPS
Group” as lead plaintiffs and its attorneys as lead counsel in the Action. On
January 24, 2003, a consolidated amended complaint was filed (the “Complaint,”
as subsequently amended and corrected). The Complaint alleged that Xcel and the
Individual Defendants violated §§ 10(b) and 20(a) of the Securities Exchange
Act of 1934 (“Exchange Act”) (15 U.S.C. §§ 78j(b) and 78t(a) and Rule 10b-5
promulgated thereunder) and §§ 11 and 15 of the Securities Act of 1933 (“Securities
Act”) (15 U.S.C. §§ 77k and 77o), causing damages to defined groups of
purchasers of Xcel stock and NRG Senior Notes.

 

In March 2003, the Judicial Panel on Multidistrict
Litigation issued an order coordinating the Action, for pretrial purposes only,
with shareholder derivative and ERISA lawsuits filed against certain current
and former directors and officers of Xcel (and, as to the ERISA actions, also
against Xcel itself). That coordinated proceeding was captioned In re Xcel
Energy, Inc. Securities, Derivative and “ERISA” Litigation, MDL No. 1511.
This Agreement resolves only the securities lawsuits (the “Action,” as defined
below at Paragraph V (A) (1)) that are part of that coordinated proceeding, and
does not resolve the Derivative Action or the ERISA Action. However, because of
the interrelationship among the insurance policies that are funding a portion
of this Settlement and the pending settlements in the Derivative Action and the
ERISA Action, the effectiveness of this Settlement is conditioned upon the
final approval of the pending settlements of the Derivative Action and the
ERISA Action, as set forth below in Paragraph V (A) (10).  

 

2

 

By order dated September 30, 2003, the Honorable David
Doty granted in part and denied in part defendants’ motion to dismiss the
Complaint. See  In Re Xcel Energy, Inc. Securities, Derivative & “ERISA”
Litigation, 286 F. Supp. 2d 1047 (D. Minn.  2003). The Court denied the motion to dismiss
as it related to claims under the Exchange Act brought on behalf of those who
purchased or acquired Xcel common stock during the proposed class period. The
Court granted the motion as it related to all claims brought on behalf of
purchasers of NRG Senior Notes, which were advanced under both Rule 10b-5 and
the Securities Act. The Court dismissed the NRG Senior Note claims with
prejudice, concluding as a matter of law that the prospectuses under which the
NRG Senior Notes had been offered did not contain material omissions or
misstatements, and that the Rule 10b-5 claim on behalf of NRG noteholders was “too
attenuated to withstand the scrutiny required by the [Private Securities
Litigation Reform Act],” failing to raise any inference of fraud as to any of
the defendants. Before the beginning of settlement negotiations that ultimately
led to this Agreement, counsel focusing on the claims regarding the NRG Senior
Notes had concluded independently that an appeal of the Court’s dismissal order
as to those claims would not be pursued. 
Moreover, the discovery taken during the months following the Court’s order
on the motion to dismiss did not uncover evidence that would support any of the
claims that had been raised on behalf of the NRG Senior Noteholders in the
Complaint.

 

On May 14, 2003, after commencement of this Action,
NRG filed a petition for reorganization under Chapter 11 of the United States
Bankruptcy Code. On November 24, 2003, following notice and hearing in
accordance with the provisions of the Bankruptcy Code and Rules, the United
States Bankruptcy Court for the Southern

 

3

 

District of New
York entered an order confirming NRG’s plan of reorganization and authorizing
its entry into a settlement agreement with Xcel. One combined effect of the
confirmation order, the plan and the Xcel agreement was to release various NRG related
claims against Xcel and present and former Xcel directors and officers, including
all claims alleged in the Complaint relating to the NRG Senior Notes as against
Xcel and the majority of the Individual Defendants. 

 

The parties, after engaging in substantial discovery,
were ordered by the court (see Order dated October 9, 2004) to engage in
mediation. Through the mediation and follow-up contacts, the parties to the
Action agreed to a settlement, the terms of which are embodied in this
Settlement Agreement. A prerequisite to any settlement of this Action is the
full and final resolution and release of all claims asserted in the Complaint,
including those asserted in respect of Xcel common stock and those asserted in
respect of NRG Senior Notes (which full and final resolution is accomplished by
this Agreement), as well as full and final resolution of both the Derivative
Action and ERISA Actions (which are the subjects of separate settlement
agreements).

 

II.            BENEFITS
OF SETTLEMENT TO THE SETTLEMENT CLASS

 

The Representative Plaintiffs and their attorneys have
carefully weighed the benefits to the Settlement Class of a prompt settlement
of the Action for the consideration being offered by the Settling Defendants,
against the significant cost, risk and delay that continued prosecution of the
Action would involve. The Representative Plaintiffs and their attorneys
recognize the expense and length of continued proceedings necessary to continue
the Action against Xcel and the Individual Defendants through trial and
appeals, and also are mindful of the asserted defenses to

 

4

 

their claims. The
Representative Plaintiffs and their attorneys also have taken into account the
anticipated difficulty of proving damages, as well as the fact that the Court has
dismissed with prejudice the claims relating to the NRG Senior Notes, the considered
determination by plaintiffs’ counsel focusing on the claims regarding the NRG
Senior Notes that an appeal of the dismissal order would not be pursued in view
of the very limited prospect for a reversal of the order, and the fact that the
NRG bankruptcy independently resulted in a release of a substantial portion of
the NRG Senior Note claims. In light of the foregoing, the Representative
Plaintiffs and Class Counsel believe that the settlement set forth in this
Agreement confers substantial benefits on the Settlement Class and Class
Members.

 

III.           THE
SETTLING DEFENDANTS’ REASONS FOR SETTLEMENT

 

Xcel and the Individual Defendants have concluded that
the further conduct of the Action against them would be protracted and
expensive. Substantial amounts of time, energy and resources have been, and
unless this settlement is made will continue to be, devoted to the defense of
the claims asserted by the Representative Plaintiffs and the Settlement Class
in the Action. While denying liability as to any of the claims raised in the
Action, and any wrongdoing of any kind whatsoever, Xcel and the Individual
Defendants also recognize that there are risks attendant to any litigation.  Xcel and the Individual Defendants have,
therefore, determined that it is desirable and beneficial to them that the
Action be settled in the manner and upon the terms and conditions set forth in
this Agreement to eliminate the burden, expense and inconvenience of further
protracted litigation. 

 

5

 

IV.           THE
SETTLING DEFENDANTS’ DENIALS OF WRONGDOING

 

Xcel and the Individual Defendants have denied and
continue to deny each and all of the claims and contentions alleged in the
Action. Xcel and the Individual Defendants repeatedly have asserted, and
continue to assert, many defenses thereto, and have expressly denied and
continue to deny any wrongdoing or legal liability arising out of any of the
conduct alleged in the Action. Neither this Agreement, nor any document
referred to herein, nor any action taken to carry out this Agreement, is, may
be construed as, or may be used as an admission by or against Xcel or the Individual
Defendants of any fault, wrongdoing or liability whatsoever. Pursuant to
Fed.R.Evid. 408, entering into or carrying out this Agreement, the exhibits
hereto, and any negotiations or proceedings related thereto, shall not in any
event be construed as, or deemed to be evidence of, an admission or concession
by any of the undersigned parties, and shall not be offered or received into
evidence in any action or proceeding against any of the Settling Defendants in
any court, administrative agency or other tribunal for any purpose whatsoever,
other than to enforce the provisions of this Agreement or the provisions of any
related agreement or exhibit hereto. 

 

V.            TERMS
OF THE AGREEMENT

 

NOW, THEREFORE, it is hereby stipulated and agreed,
by and among the undersigned parties, that the Action shall be settled, subject
to the approval of the Court pursuant to Fed.R.Civ.P. 23(e), upon and subject
to the following terms and conditions: 

 

6

 

A.            Definitions

 

(1)           “Action”
means the securities fraud lawsuits originally filed in the United States
District Court for the District of Minnesota under the case numbers listed in
the caption of this Agreement, consolidated by the Court by order dated
November 12, 2002, and proceeding under the caption “In re Xcel Energy, Inc.
Securities Litigation,”  Master File
No. 02-2677 (DSD/FLN).

 

(2)           “Authorized
Claimant” means a Claimant who has filed a timely and adequate proof of claim,
pursuant to Paragraphs V (B) (11) and (14) of this Agreement, who is entitled
to share in the Settlement Fund in accordance with the plan of distribution
described in the notice to the Settlement Class, and whose claim has been
approved for payment by Plaintiff’s Settlement Counsel. 

 

(3)           “Claimant”
means any Class Member who files a proof of claim in such form, in such manner,
and within such times as the Court shall prescribe. 

 

(4)           “Claims
Administrator” means Analytics, Inc.

 

(5)           “Class
Counsel” means the law firms of Chestnut & Cambronne, P.A.; Berger &
Montague, P.C.; Heins, Mills & Olson; Kaplan Fox & Kilsheimer; Much
Shelist; Reinhardt, Wendorf & Blanchfield; and Spector, Rosman &
Kodroff. 

 

(6)           “Class
Member(s)” means a member of the Settlement Class.

 

(7)           “Class
Period” means the period beginning January 31, 2001 through July 25, 2002,
inclusive. 

 

7

 

(8)           “Derivative
Action” means the case captioned Edith Gottlieb v. Xcel Energy, Inc., et al.,
Civil No. 02-2931 (DSD/FLN) (D. Minn.). 

 

(9)           “ERISA
Action” means, collectively, the cases captioned Newcome and Banks v. Xcel
Energy, Inc., et al., Civil No. 03-2218 (DSD/FLN) (D. Minn.) and Barday
v.  Xcel Energy, Inc., et al., Civil
No. 03-2219 (DSD/FLN) (D. Minn.).

 

(10)         “Effective
Date” means the third court day following the date on which the Court’s
judgment approving this Agreement and dismissing the Action with prejudice and
on the merits, substantially in the form attached hereto as Exhibit B, becomes
Final; provided, however, that the Effective Date shall not occur unless and
until the pending settlements of the Derivative Action and the ERISA Action
become Final. If the pending settlements of the Derivative Action and the ERISA
Action do not become Final, then the Effective Date shall not occur and this
Agreement shall terminate in accordance with the provisions of Section I below.
As used in this Agreement, “Final” means the date upon which the Court’s
judgment becomes not subject to further appeal or review.  Thus, “Final” means, without limitation, the
date of expiration of the time for the filing or noticing of any appeal from
the final judgment of the Court without any appeal being filed therein; or, if
an appeal is filed in this Action, the Derivative Action or the ERISA Action,
the latest of the dates upon which the judgment in this Action, the Derivative Action
or the ERISA Action is finally affirmed on appeal, or the appeal is finally dismissed
without any request for further discretionary review of such appellate decision;
or, if further discretionary review of such appellate decision is sought, the latest
date upon which such discretionary review is denied or, if granted, results in
final affirmance of the judgment in this Action, the Derivative Action or the
ERISA Action. 

 

8

 

(11)         “Escrow
Agent” means TCF National Bank Minnesota, which bank or institution shall
perform its duties as set forth in this Agreement and in the Escrow Agreement
attached hereto as Exhibit C. 

 

(12)         “Individual
Defendants” means Wayne Brunetti, James J. Howard, Edward J. McIntyre, David H.
Peterson, Leonard A. Bluhm, William T. Pieper, Gary R. Johnson, Richard C.
Kelly, and Luella G. Goldberg, all and each of them, and all and each of their respective
assigns, successors, agents, representatives, spouses, heirs, executors, administrators,
insurers and reinsurers. 

 

(13)         “NRG” means
NRG Energy, Inc.

 

(14)         “NRG Senior
Notes” means Senior Notes issued by NRG Energy, Inc. pursuant to a registration
statement and prospectus filed with the SEC on or about January 26, 2001 and
supplemented on or about April 3, 2001 (consisting of 7.75% notes due 2011 and
8.625% notes due 2031). 

 

(15)         “Notice Fund”
means a fund of $250,000, to be established as specified in Paragraph V (F) (1)
of this Agreement, and any interest accrued thereon.

 

(16)         “Person”
means any individual, corporation, partnership, association, joint stock
company, trust, employee benefit plan, unincorporated organization, government
and any political subdivision thereof, or any other type of entity.

 

(17)         “Plaintiffs’
Co-Lead Counsel” means the law firms of Chestnut & Cambronne, P.A. and
Berger & Montague, P.C.

 

(18)         “Representative
Plaintiffs” means Chips Investments Limited Partnership, Steven Aanenson,
Beverly K. Aanenson, Harry C. Andrews, Thomas R. Perry, Jr., Lloyd

 

9

 

and Barbara Amundson Charity Foundation, Lake Benton
Bancorporation, Inc., L.A.  Amundson
Scholarships, Inc. and Catholic Workman.

 

(19)         “Settled
Claims” means any and all claims, actions, causes of action, rights or
liabilities, whether arising out of state or federal law, including Unknown Claims,
of any Class Member, which exist or may exist against any of the Settling Defendants,
their respective past and present parents, subsidiaries, and affiliated corporations
and entities, the predecessors and successors in interest of any of them, and
all of their respective past and present officers, directors, employees,
agents, partners, representatives, spouses, heirs, executors, administrators,
insurers, reinsurers, attorneys, and assigns, by reason of any matter, event,
cause or thing whatsoever arising out of, relating to, or in any way connected
with: (a) the purchase, acquisition, sale or disposition of any Xcel Securities
or NRG Senior Notes; (b) any claims that a Class Member may have for recovery
to or for that Class Member as a shareholder of Xcel or holder of NRG Senior
Notes; and (c) any of the facts, circumstances, transactions, events,
occurrences, acts, omissions or failures to act that have been alleged or
referred to in any pleading or other paper filed with the Court in the Action;
or (d) any facts, circumstances, transactions, events, occurrences, acts, omissions
or failures to act that could have been alleged in the Action and that relate
to the Class Member’s investment or potential investment in Xcel and/or NRG
securities of any kind or nature.

 

(20)         “Settlement
Class” or “Class” means the Representative Plaintiffs and all other Persons,
including Xcel employees, who purchased or otherwise acquired for value any
common stock of Xcel or NRG Senior Notes during the Class Period, whether

 

10

 

pursuant to prospectus, in open-market transactions,
or otherwise, except for (a) any Person who files a valid and timely request
for exclusion pursuant to the Notice of Settlement Hearing as provided in
Paragraph V (B) (7); (b) the defendants in the Action; (c) any member of the
immediate family of any Individual Defendant; and (d) any legal representative,
heir, controlling person, successor, predecessor in interest or assign of any
defendant.

 

(21)         “Settlement
Counsel” means Chestnut & Cambronne, P.A. on behalf of plaintiffs and each
of Briggs & Morgan, P.A. and Jones Day on behalf of defendants.

 

(22)         “Settlement
Fund” means the sum of $80 Million, to be paid by or on behalf of the Settling
Defendants as specified in Paragraph V(E)(1) of this Agreement, plus any
interest accrued pursuant to Paragraph V(E)(4) below, of which $250,000 is to be
allocated to the Notice Fund pursuant to Paragraph V(F)(1) below.

 

(23)         “Settling
Defendants” means, collectively, Xcel and the Individual Defendants. 

 

(24)         “Unknown
Claims,” as used in the definition of Settled Claims in Paragraph V(A)(19),
means claims which the Class Members do not know or suspect to exist in their
favor at the time of their granting a release of the Settled Claims, which if known
by them might have affected their settlement of the Action. Solely with respect
to any and all Settled Claims, it is the intention of the parties hereto that,
upon the Effective Date, as defined above, each of the Class Members shall be
deemed to have, and by operation of the Final Judgment shall have, expressly
waived and relinquished, to the fullest extent permitted by law, the
provisions, rights and benefits of any statute or law that might otherwise
render a general release unenforceable with respect to

 

11

 

Unknown Claims, including the provisions, rights and
benefits of § 1542 of the California Civil Code, which provides: “A general
release does not extend to claims which the creditor does not know or suspect
to exist in his favor at the time of executing the release, which if known by
him must have materially affected his settlement with the debtor.” The
Representative Plaintiffs and each of the Class Members shall be deemed to have
acknowledged, and by operation of the Final Judgment acknowledges, that he is
aware that he may hereafter discover facts in addition to or different from
those which he now knows or believes to be true with respect to the subject
matter of this release, but that it is his intention to fully, finally and
forever settle and release, and each Class Member shall be deemed, upon the
Effective Date, to have, fully, finally, and forever settled and released, any
and all Settled Claims, known or unknown, suspected or unsuspected, contingent
or noncontingent, whether or not concealed or hidden, which now exist, may
hereafter exist or may heretofore have existed, without regard to the subsequent
discovery or existence of such different or additional facts. All of the
foregoing is the definition of “Unknown Claims.”

 

(25)         “Xcel” means
Xcel Energy, Inc.

 

(26)         “Xcel
Securities” means the common stock of Xcel.

 

B.            The Court’s Order Preliminarily Approving the
Settlement

 

As soon as practicable after execution of this
Agreement, counsel for the undersigned parties shall apply jointly to the Court
for an order in form and substance substantially identical to the proposed
Order attached hereto as Exhibit A (“Order of Preliminary Approval”), which
shall specifically include provisions which:

 

12

 

1.             Preliminarily
approve the settlement as embodied in this Agreement as being fair, reasonable,
and adequate to the Settlement Class;

 

2.             For
purposes of settlement only, certify the Settlement Class pursuant to
Fed.R.Civ.P. 23(a) and 23(b)(3) and determine that the interests of Class Members
in enforcing their rights in the Action will be fairly and adequately
represented by the Representative Plaintiffs and by Class Counsel.

 

3.             Provide
that Plaintiffs’ Co-Lead Counsel is authorized to enter into the Agreement on
behalf of all Class Counsel and on behalf of the Settlement Class, and to bind
them all to the duties and obligations contained herein, subject to final approval
by the Court following the Settlement Hearing;

 

4.             Approve
the form of Notice of Pendency of Class Action and Derivative Action, Proposed
Settlements, Motions for Attorneys’ Fees and Settlement Fairness Hearing (“Notice
of Settlement Hearing”), substantially in the form attached hereto as Exhibit
A-1, for mailing to Class Members and Xcel shareholders in order to provide
notice of the hearing for approval of the settlement, and direct that
Plaintiffs’  Settlement Counsel mail or
cause to be mailed such Notice of Settlement Hearing to those Class Members and
Xcel shareholders who can be identified through reasonable effort, such mailing
to be accomplished at least 45 days prior to the date of the Settlement
Hearing;

 

5.             Approve
the form of Summary Notice, substantially in the form attached hereto as
Exhibit A-2, to be published to provide notice of the Settlement Hearing, and
direct that Plaintiffs’ Settlement Counsel cause such Summary Notice to be
published once in the national edition of The Wall Street Journal, Minneapolis
Star

 

13

 

Tribune, and the St. Paul Pioneer
Press no more than 10 days after the mailing described in Paragraph V(B)(4)
above, and at least 35 days prior to the Settlement Hearing;

 

6.             Find
that mailing and publication pursuant to Paragraphs V(B)(4)  and V(B)(5) above constitute the best notice
practicable under the circumstances, constitute due and sufficient notice of
the matters set forth in said Notices to all persons entitled to receive
notice, and fully satisfy the requirements of due process, of 15 U.S.C. §78u-4(a)
(7), and of Fed.R.Civ.P. 23 and 23.1;

 

7.             Require
any Class Member who desires to request exclusion from the Settlement Class to
so notify the Claims Administrator and counsel for the undersigned parties in
the manner set forth in the Notice of Settlement Hearing, and to provide the information
required therein;

 

8.             Schedule
a hearing to be held by the Court (“Settlement Hearing”)  to determine: (a) whether the settlement of
this Action should be approved as fair, reasonable, adequate, and in the best
interests of the Settlement Class; (b) whether a final judgment should be
entered substantially in the form attached hereto as Exhibit B (“Final Judgment”);
(c) whether the Representative Plaintiffs’ proposed plan of distribution of the
settlement proceeds that is described in the Notice of Settlement Hearing (“Plan
of Distribution”) should be approved as fair and reasonable to the Settlement
Class; and (d) whether to approve the application of Plaintiffs’ Co-Lead Counsel,
on behalf of lead plaintiffs and Class Counsel, for an award of attorneys’
fees, costs, and expenses (“Fee and Expense Petition”);

 

14

 

9.             Provide
that any objections to the settlement, the Plan of Distribution, or the Fee and
Expense Petition shall be heard, and any papers submitted in support of said
objections shall be received and considered by the Court at the Settlement
Hearing (unless, in its discretion, the Court shall direct otherwise), only if,
on or before a date to be specified in the Court’s Notice of Settlement Hearing,
persons making objections give notice of their intention to appear, and submit
copies of such papers as they propose to submit, to Analytics, Inc. and, on or
before such date, submit such papers to Settlement Counsel;

 

10.           Approve
the form of Proof of Claim Form and Release, substantially in the form attached
hereto as Exhibit A-3, and direct that Plaintiffs’ Settlement Counsel mail or
cause to be mailed such Proof of Claim Form and Release at the same time and in
the same manner to Class Members, as provided in Paragraph V (B) (4) above with
respect to the Notice of Settlement Hearing;

 

11.           Provide
that, in order to share in the Settlement Fund, a Class Member must execute and
submit a Proof of Claim Form and Release in the manner provided therein within
such time as is allowed by the Court;

 

12.           Provide
that all Class Members, whether or not they submit a Proof of Claim Form and
Release within the time provided, shall be permanently enjoined and barred from
asserting any claims (except through the proof of claim procedures) arising
from the Settled Claims, and that all Class Members conclusively shall be
deemed to have released any and all such Settled Claims; 

 

15

 

13.           Provide
that, if this Agreement becomes Effective, only persons who are Authorized
Claimants shall have rights in the distribution of the Settlement Fund;

 

14.           Provide
that a Proof of Claim Form and Release filed by mail shall be deemed to have
been submitted when postmarked, if mailed by first class mail, registered mail,
or certified mail, postage prepaid, addressed in accordance with the
instructions given in the Proof of Claim Form and Release, and that all other
Proofs of Claim Forms and Release shall be deemed to have been submitted at the
time they are actually received by the Claims Administrator; and

 

15.           Provide
that the Settlement Hearing may, from time to time and without further notice
to Class Members, be continued or adjourned by order of the Court.

 

C.            Judgment
To Be Entered by the Court Approving the Settlement

 

Upon approval by the Court of the settlement set forth
in this Agreement, a final judgment shall be entered by the Court, pursuant to
an Order for Final Judgment in form and substance substantially identical to
the one attached hereto as Exhibit B, which shall specifically include
provisions that:

 

1.             Approve
the settlement set forth in this Agreement as fair, reasonable, adequate, and
in the best interests of the Settlement Class, and direct consummation of the
settlement in accordance with the terms and provisions of this Agreement;

 

16

 

2.             Fully
and finally dismiss the Action with prejudice and on the merits, and without
costs (except as may be provided herein) to any undersigned party as against
any other;

 

3.             Adjudge
that the Representative Plaintiffs and all Class Members shall conclusively be
deemed to have released any claims, actions, causes of action, rights or
liabilities against the Settling Defendants, their respective past and present parent,
subsidiary, and affiliated corporations and entities, the predecessors and successors
in interest of any of them, and all of their respective past and present officers,
directors, employees, agents, partners, representatives, spouses, heirs, executors,
administrators, insurers, reinsurers, attorneys, and assigns, arising out of, based
upon, or otherwise related in any way to the Settled Claims;

 

4.             Bar and
permanently enjoin the Representative Plaintiffs and all Class Members from
instituting, asserting or prosecuting, either directly, representatively,
derivatively or in any other capacity, any and all claims which they, or any of
them, had, have or may have against the Settling Defendants, their respective past
and present parent, subsidiary, and affiliated corporations and entities, the predecessors
and successors in interest of any of them, and all of their respective past and
present officers, directors, employees, agents, partners, representatives,
spouses, heirs, executors, administrators, insurers, reinsurers, attorneys, and
assigns, arising out of, based upon or otherwise related in any way to the
Settled Claims;

 

5.             Determine,
pursuant to 15 U.S.C. §78u-4(c) (1), that all counsel appearing in this Action
have complied with the requirements of Rule 11(b) of the Federal Rules of Civil
Procedure;

 

17

 

6.             Approve
the Plan of Distribution;

 

7.             Award
Class Counsel and lead plaintiffs from out of the Settlement Fund such
attorneys’ fees, costs, and expenses as the Court may allow; and

 

8.             Reserve
jurisdiction over: (a) implementation of this settlement and any distribution
to Authorized Claimants, pursuant to further orders of the Court; (b)  disposition of the Settlement Fund; (c) the
Action, until the Effective Date of the Final Judgment contemplated in this
Agreement, and until each and every act agreed to be performed by the
undersigned parties shall have been performed pursuant to this Agreement; (d)
the Agreement, for the purpose of implementing the Plan of Distribution;  and (e) all undersigned parties, for the
purpose of enforcing and administering this Agreement. 

 

D.            Escrow
Agreement

 

1.             It is
agreed that all of the parties to this Agreement are bound by all the terms and
conditions of the Escrow Agreement with TCF National Bank Minnesota, attached
hereto as Exhibit C, as though said persons had physically executed said
agreement.

 

2.             Plaintiffs’
Settlement Counsel is authorized to execute such transactions on behalf of the
Representative Plaintiffs and Class Counsel as are consistent with the terms of
this Agreement and the Escrow Agreement attached hereto as Exhibit C.

 

E.             Settlement
Fund

 

1.             Within
ten (10) business days after the Court enters its Order Preliminarily Approving
Settlement, Xcel shall deposit with the Escrow Agent, pursuant

 

18

 

to the terms of the Escrow Agreement, the sum of
Eighty Million Dollars ($80,000,000), which amount shall be used to fund the
Settlement Fund described in the Escrow Agreement.

 

2.             None of
the Settling Defendants shall be liable, under any circumstance, to pay any
amount pursuant to this Agreement except the $80,000,000 set forth in Paragraph
V(E)(1) above.

 

3.             As of
the Effective Date, all rights of the Settling Defendants in or to the
Settlement Fund shall be extinguished.

 

4.             Except
as provided by Paragraph V(F)(2) and V(I)(3) of this Agreement, all interest
earned on the Settlement Fund shall be for the benefit of the Settlement Class
and be added to the Settlement Fund.

 

F.             Notice Fund

 

1.              The
Escrow Agent shall, on behalf of the Representative Plaintiffs, establish a
segregated fund as the Notice Fund, and shall pay into the Notice Fund the sum
of $250,000 from the Settlement Fund. The Notice Fund shall be used to pay the
initial costs of administering this settlement, including without limitation
the costs of providing notice to Class Members and Xcel shareholders of the
settlement of this Action and of the related Derivative Action, and the taxes
incurred, if any, as a result of interest accrued on the Notice Fund. Funds for
such purposes may be disbursed by Plaintiffs’ Settlement Counsel without the
requirement of any court order.

 

2.             If the
Effective Date does not occur, or if this Agreement is voided, terminated or
cancelled for any reason, the Representative Plaintiffs shall have no

 

19

 

obligation to repay any amount actually disbursed out
of the Notice Fund. Any amounts remaining in the Notice Fund after payment of
outstanding obligations for notice, including all interest earned on the Notice
Fund net of any tax liability, shall be returned to the entities responsible
for the deposit in proportion to their respective payments into the Notice Fund
within ten (10) business days, and no other undersigned party shall have any
further claim whatsoever to such amounts.

 

3.             On the
Effective Date, any balance then remaining in the Notice Fund, less expenses
incurred by it but not yet paid, shall be made part of the Settlement Fund.

 

G.            Supervision
and Distribution of the Settlement Fund

 

1.             Plaintiffs’
Settlement Counsel, acting on behalf of the Settlement Class, and subject to
the jurisdiction of the Court, shall calculate the claims submitted by Class
Members and shall oversee distribution of the Settlement Fund to Class Members.
Plaintiffs’ Settlement Counsel shall employ the Claims Administrator to assist in
such tasks. The Settling Defendants shall have no responsibility, financial
obligation, or liability whatsoever with respect to the investment or
distribution of the Settlement Fund, with respect to the processing, payment or
denial of claims against the Settlement Fund, or otherwise with respect to the
administration of this settlement or the Settlement Fund.

 

2.             On and
after the Effective Date, the Settlement Fund shall be applied, subject to the
approval of the Court, as follows:

 

(a)           To pay the
Escrow Agent its reasonable fees and expenses; 

 

20

 

(b)           To pay
taxes due and owing on the Settlement Fund, if any, including any federal,
state, or local taxes paid by any Settling Defendant that are attributable to
interest earned by the Settlement Fund;

 

(c)           To pay to
the Plaintiffs’ Settlement Counsel, on behalf of lead plaintiffs and Class
Counsel, such attorneys’ fees, costs, and expenses as the Court may allow;

 

(d)           To pay all
unpaid costs and expenses incurred in connection with providing notice to Class
Members, locating Class Members, administering and distributing the Settlement
Fund, and processing Proof of Claim Forms and Releases, including without
limitation the fees of the Claims Administrator, and the fees of accountants
for preparing tax returns for the Settlement Fund;  

 

(e)           To create
a $75,000 reserve fund to be used to pay court-approved late claims, to adjust
any errors in payment, to make other equitable adjustments, and to pay costs,
expenses and attorneys’ fees associated with dealing with such matters, subject
to Court approval on notice to the Settling Defendants but without further notice
to the Settlement Class, with any remainder to be paid to such charitable
organizations as Plaintiffs’ Settlement Counsel recommends and the Court
approves; and

 

(f)            To pay
the claims of all Authorized Claimants.

 

21

 

3.             Concurrently
with submission of this Agreement to the Court, the Plaintiffs’ Co-Lead
Counsel, on behalf of the Settlement Class, is submitting a proposed Plan of
Distribution of settlement proceeds to the Court for its approval. The proposed
Plan of Distribution is described in the Notice of Settlement Hearing. It is
agreed by the undersigned parties that Court approval of the proposed Plan of
Distribution is not a condition of this Agreement, and the proposed Plan of
Distribution is to be considered by the Court separately from the Court’s
consideration of the fairness, reasonableness and adequacy of the settlement
set forth in this Agreement. Any order or proceedings relating to the proposed
Plan of Distribution shall not operate to terminate or cancel this Agreement or
to affect its finality.  

 

4(a).        The
Settling Defendants and the Escrow Agent agree to treat the Settlement Fund as
being at all times a “qualified settlement fund” within the meaning of Treas.
Reg. Section 1.468B-1. In addition, the Escrow Agent and, as required, the Settling
Defendants shall jointly and timely make such elections as are necessary or advisable
to carry out the provisions of this ¶ V(G)(4), including the “relation-back election”
(as defined in Treas. Reg. Section 1.468B-1) back to the earliest permitted date.
Such elections shall be made in compliance with the procedures and requirements
contained in such regulations. It shall be the responsibility of the Escrow
Agent timely and properly to prepare and deliver the form of election and any other
necessary documentation for signature by all necessary parties, and thereafter
to cause the appropriate filing or filings to occur. The election statement for
the “relation-back election” is attached hereto as Exhibit D and incorporated
herein and shall be signed by

 

22

 

or on behalf of
each transferor and TCF National Bank Minnesota either before or simultaneous
with the deposits of Settlement Funds into Escrow.  

 

(b)           For the
purpose of Section 468B of the Internal Revenue Code of 1986, as amended, and
the regulations promulgated thereunder, the “administrator” shall be the Escrow
Agent. The Escrow Agent shall timely and properly file all informational and
other tax returns necessary or advisable with respect to the Settlement Fund
(including, without limitation, the returns described in Treas. Reg. Section
1.468B-2(k)). Such returns (as well as the election described in ¶ V(G)(4)(a)) shall
be consistent with this ¶ V(G)(4) and in all events shall reflect that all
taxes (including any interest or penalties) on the income earned by the
Settlement Fund shall be paid out of the Settlement Fund as provided in ¶
V(G)(4)(c) hereof.  

 

(c)           All (i)
taxes (including any interest or penalties) arising with respect to the income
earned by the Settlement Fund, including any taxes or tax detriments that may
be imposed upon the Settling Defendants and their related parties with respect
to any income earned by the Settlement Fund for any period during which the
Settlement Fund does not qualify as a “qualified settlement fund” for Federal
or state income tax purposes (“Taxes”); and (ii) expenses and costs incurred in
connection with operating and implementing this ¶ V(G)(4) (including, without
limitation, expenses of tax attorneys and/or accountants and mailing and
distribution costs and expenses relating to filing (or failing to file) the
returns described in this ¶ V(G)(4)) (“Tax Expenses”), shall be paid out of the
Settlement Fund; in all events the Settling Defendants and their related
parties shall have no liability or responsibility for the Taxes or the Tax
Expenses. The Settlement Fund shall indemnify and hold the Settling Defendants
and their related

 

23

 

parties harmless
for Taxes and Tax Expenses (including, without limitation, taxes payable by
reason of any such indemnification). Further, Taxes and Tax Expenses shall be
treated as, and considered to be, a cost of administration of the Settlement
and shall be timely paid by the Escrow Agent out of the Settlement Fund without
prior order from the Court and the Escrow Agent shall be obligated
(notwithstanding anything herein to the contrary) to withhold from distribution
to Class Members any funds necessary to pay such amounts including the
establishment of adequate reserves for any Taxes and Tax Expenses (as well as
any amounts that may be required to be withheld under Treas. Reg. Section
1.468B-2(l) (2)); the Settling Defendants and their related parties are not
responsible and shall have no liability therefor. The parties hereto agree to
cooperate with the Escrow Agent, each other, and their tax attorneys and
accountants to the extent reasonably necessary to carry out the provisions of
this ¶ V(G)(4).

 

(d)           For the
purpose of this ¶ V (G)(4), references to the Settlement Fund shall include
both the Settlement Fund and the Notice Fund and shall also include any
earnings thereon.  

 

H.            The
Fee and Expense Petition  

 

1.             Plaintiffs’
Co-Lead Counsel, on behalf of lead plaintiffs and Class Counsel, intends to
file an application for attorneys’ fees, for reimbursement of out-of-pocket
costs and expenses, including any expert or consultant fees incurred, and for
reimbursement to the lead plaintiffs for their time and expenses expended on
the Action to the extent permitted by 15 U.S.C. § 78u-4(a)(6), all to be
paid from out of the Settlement Fund (the “Fee and Expense Petition”). Any and
all such awards shall be paid only from the Settlement Fund and shall not
otherwise be paid by the Settling

 

24

 

Defendants or
their insurers. The Settling Defendants take no position as to whether the
requested payments to the lead plaintiffs are or are not proper.

 

2.             It is
agreed that the allowance or disallowance by the Court of all or any part of
any application by Plaintiffs’ Co-Lead Counsel, as described in paragraph V(H)(1),
is not a term or condition of the settlement set forth in this Agreement, and any
order or proceeding relating thereto, or any appeal from any such order, shall not
operate to terminate or cancel this Agreement or to affect or delay the Effective
Date. However, distribution of all or a portion of the Settlement Fund may be
delayed in the event of an appeal concerning any fees, costs, or expenses.

 

I.              Conditions of Settlement; Effect of Disapproval, Cancellation and
Termination

 

1.             This Agreement
shall be deemed terminated and cancelled, and shall have no further force and
effect whatsoever, if:  

 

(a)           There is
no Effective Date;  

 

(b)           The Court
fails to enter an order certifying the Settlement Class, preliminarily
approving the settlement, and directing that notice of the settlement be given,
substantially in the forms provided in Paragraph V(B) and Exhibits A and A-1
through A-3 hereto, or if such an order is entered, it later is reversed or
materially modified, whether on appeal or otherwise;  

 

(c)           The Court
fails to enter a Final Judgment as provided in Paragraph V(C) and Exhibit B
hereto, or if such a Final Judgment is entered, it

 

25

 

later is reversed or materially modified, whether on appeal
or otherwise (a reversal or modification of any proposed Plan of Distribution
or of any award of attorneys’ fees, costs, and expenses pursuant to the Fee and
Expense Petition shall not be deemed a reversal or modification of the material
terms of this Agreement).  

 

2.             Xcel
shall have the right to terminate and cancel this Agreement if the members of
the Settlement Class who request exclusion from the settlement pursuant to
Paragraph V(B)(7) of this Agreement collectively have purchased or otherwise acquired
for value during the Class Period a number of shares of Xcel common stock in
excess of the number, or NRG Senior Notes having a principal value in excess of
the value, specified in a separate Supplement to Settlement Agreement among the
parties to this Agreement. The Supplement to Settlement Agreement shall be
filed and maintained with the Court under seal and its terms and conditions, to
the extent reasonably feasible, shall be treated hereafter by all Parties as
confidential. If Xcel elects to terminate and cancel this Agreement pursuant to
this Paragraph V(I)(2), it shall give written notice to the Plaintiffs’ Co-Lead
Counsel by no later than one day before the Settlement Hearing. The Claims
Administrator shall deliver copies of all requests for exclusion received,
together with copies of all written revocations of requests for exclusion, to
Defendants’ Settlement Counsel no later than 10 days before the Settlement
Hearing.  

 

3.             In the
event that this Agreement is voided, terminated or cancelled, or fails to
become effective for any reason whatsoever, then within 10 days after written notice
is sent by any undersigned party to the Escrow Agent and all other undersigned

 

26

 

parties, the
Notice Fund and/or Settlement Fund and all interest earned thereon (subject to
the expiration of any time deposit not to exceed 90 days) shall be refunded in proportion
to their respective payments into the Settlement Fund, less: (a) reasonable Escrow
Agent fees and expenses; (b) any amounts disbursed, billed, or incurred for notice
pursuant to Paragraph V(F)(1) of this Agreement; and (c) any amounts disbursed,
billed, or incurred for tax liabilities on the respective funds, if any. In such
event, the undersigned parties shall be deemed to have reverted to their respective
statuses as of the date and time immediately prior to the execution of this
Agreement, and they shall proceed in all respects as if this Agreement, its
exhibits, and any related agreements or orders, had never been executed. In
such event, the undersigned parties jointly will seek vacation of any order
entered or actions taken in connection with this Agreement.  

 

J.             Miscellaneous
Provisions  

 

1.             All of
the exhibits attached hereto are hereby incorporated by this reference as
though fully set forth herein.  

 

2.             This
Agreement may be amended or modified only by a written instrument signed by all
of the parties to this Agreement or their successors-in-interest.  

 

3.             The
waiver by one party of any breach of this Agreement by any other party shall
not be deemed a waiver, by that party or by any other party to this Agreement,
of any other prior or subsequent breach of this Agreement.  

 

4.             This
Agreement and its exhibits constitute the entire agreement among the parties
hereto, and no representations, warranties or inducements have been made to any
party concerning this Agreement or its exhibits other than the

 

27

 

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

 

5.             Plaintiffs’
Co-Lead Counsel, on behalf of the Settlement Class, is authorized to take all
appropriate action required or permitted to be taken by the Settlement Class or
Class Counsel pursuant to this Agreement to effectuate its terms. Plaintiffs’ Co-Lead
Counsel also is authorized to enter into any modifications or amendments to
this Agreement on behalf of the Settlement Class which such counsel deems
appropriate.  

 

6.             Within
90 days of the Effective Date, the parties to this Agreement shall comply with
the provisions of the Joint Stipulation and Protective Order entered by the
Court, as it relates to the destruction or return of confidential materials.  

 

7.             This
Agreement will be executed on behalf of Representative Plaintiffs and the
Settlement Class by Plaintiffs’ Co-Lead Counsel and on behalf of Xcel and the
Individual Defendants by their respective counsel of record. All counsel
executing this Agreement represent and warrant that they are authorized and empowered
to execute this Agreement on behalf of their stated client(s), and that the
signature of such counsel is intended to and does legally bind stated client(s)
of such counsel.  

 

8.             Before
the Representative Plaintiffs or their attorneys issue any press release
relating to the Action or its resolution, the proposed press release will be
given to Xcel for approval. The press release will not be issued unless Xcel
consents in writing to its issuance; Xcel will not unreasonably withhold that
consent.  

 

28

 

9.             This
Agreement may be executed in one or more counterparts. All executed
counterparts and each of them shall be deemed to be one and the same instrument,
provided that counsel for the parties hereto shall exchange among themselves
original signed counterparts.  

 

10.           This
Agreement shall be binding upon, and inure to the benefit of, the successors
and assigns of the parties to this Agreement.

 

11            All terms
of this Agreement and the exhibits hereto shall be governed by and interpreted
according to the laws of the State of Minnesota.

 

12.           The
parties to this Agreement and their counsel agree to use their best efforts,
and to take all reasonable steps necessary, to obtain the entry of the Order
for Final Judgment and to effectuate the settlement set forth in this
Agreement.  

 

IN WITNESS WHEREOF,
the parties hereto have caused this Agreement to be executed, by their duly
authorized attorneys, as of the date stated above.

 

29

 

	
  Date: December 31, 2004.

  	
   

  	
  Date: December 31, 2004

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  FOR THE REPRESENTATIVE

  	
   

  	
  FOR DEFENDANTS XCEL ENERGY,

  
	
  PLAINTIFFS, CLASS COUNSEL, AND

  	
   

  	
  INC., WAYNE BRUNETTI, EDWARD J.

  
	
  THE SETTLEMENT CLASS

  	
   

  	
  MCINTYRE, WILLIAM T. PIEPER, GARY

  
	
   

  	
   

  	
  R. JOHNSON AND RICHARD C. KELLY

  
	
   

  	
   

  	
   

  	
   

  
	
  CHESTNUT & CAMBRONNE,
  P.A.

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  JONES DAY

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  By:

  	
  s\ Jack L. Chestnut

  	
   

  	
   

  	
   

  
	
   

  	
  Jack L. Chestnut, No. 16378

  	
  By:

  	
   s\John M.
  Newman, Jr.

  	
   

  
	
   

  	
  Karl L. Cambronne, No. 14321

  	
   

  	
  John M. Newman, Jr., No. 5763

  
	
   

  	
  Jeffrey D. Bores, No. 227699

  	
   

  	
  Geoffrey J. Ritts, No. 62603

  
	
   

  	
  3700 Campbell Mithun Tower

  	
   

  	
  North Point

  
	
   

  	
  222 South Ninth Street

  	
   

  	
  901 Lakeside Avenue

  
	
   

  	
  Minneapolis, MN 55402

  	
   

  	
  Cleveland, Ohio 44114

  
	
   

  	
  (612) 339-7300

  	
   

  	
  Telephone: (216) 586-3939

  
	
   

  	
  Fax (612)336-2940

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  BERGER & MONTAGUE,
  P.C.

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  BRIGGS AND MORGAN, P.A.

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  By

  	
  s\Sherrie R. Savett

  	
   

  	
   

  	
   

  
	
   

  	
  Sherrie R. Savett, No. 17646

  	
  By

  	
  s\Timothy R. Thornton

  	
   

  
	
   

  	
  Phyllis M. Parker, No. 77336

  	
   

  	
  Timothy R. Thornton, No. 109630

  
	
   

  	
  1622 Locust Street

  	
   

  	
  2400 IDS Center

  
	
   

  	
  Philadelphia, PA 19103

  	
   

  	
  80 South 8th Street

  
	
   

  	
  (215) 875-3000

  	
   

  	
  Minneapolis, MN 55402

  
	
   

  	
   

  	
   

  	
  Telephone: (612) 334-8400

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  FOR DEFENDANT JAMES J. HOWARD

  
										

 

30

 

	
   

  	
   

  	
   

  	
  RIDER BENNETT LLP

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  By

  	
  s\ Eric J. Magnuson

  	
   

  	 

	
   

  	
   

  	
   

  	
   

  	
  Eric J. Magnuson, No. 66412

  
	
   

  	
   

  	
   

  	
   

  	
  Rachna B. Sullivan, No. 272565

  
	
   

  	
   

  	
   

  	
   

  	
  Suite 4900

  
	
   

  	
   

  	
   

  	
   

  	
  33 South Sixth Street

  
	
   

  	
   

  	
   

  	
   

  	
  Minneapolis, MN 55402

  
	
   

  	
   

  	
   

  	
   

  	
  Telephone: (612) 340-7951

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  FOR DEFENDANTS DAVID H.

  
	
   

  	
   

  	
   

  	
  PETERSON AND LEONARD A. BLUHM

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  MASLON EDELMAN BORMAN
  &

  
	
   

  	
   

  	
   

  	
  BRAND

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  By:

  	
   \Richard G.
  Wilson

  	
   

  	 

	
   

  	
   

  	
   

  	
   

  	
  Richard G. Wilson, No. 16544

  
	
   

  	
   

  	
   

  	
   

  	
  James F. Killian, No. 193914

  
	
   

  	
   

  	
   

  	
   

  	
  3300 Wells Fargo Center

  
	
   

  	
   

  	
   

  	
   

  	
  90 South Seventh Street

  
	
   

  	
   

  	
   

  	
   

  	
  Minneapolis, MN 55402

  
	
   

  	
   

  	
   

  	
   

  	
  Telephone: (612) 672-8300

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  FOR DEFENDANT LUELLA G.

  
	
   

  	
   

  	
   

  	
  GOLDBERG

  

 

31

 

	
   

  	
  GREENE ESPEL, P.L.L.P.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  	
   

  	
  By:

  	
  s\William J. Otteson

  	
   

  
	
   

  	
   

  	
   

  	
  Andrew M. Luger, No. 189261

  
	
   

  	
   

  	
   

  	
  William J. Otteson, No. 290440

  
	
   

  	
   

  	
   

  	
  200 South Sixth Street, Suite 1200

  
	
   

  	
   

  	
   

  	
  Minneapolis, MN 55402

  
	
   

  	
   

  	
   

  	
  Telephone: (612) 373-0830

  
						

 

32

 

EXHIBIT A

 

UNITED STATES DISTRICT
COURT

DISTRICT OF MINNESOTA

 

	
  In
  Re Xcel Energy, Inc., Securities, Derivative

  	
  Master
  File: Civil 02-2677 (DSD/FLN)

  
	
  &
  “ERISA” Litigation

  	
  MDL
  No. 1511

  
	
   

  	
   

  
	
  This document relates to Case Nos. 02-2677, 02-2774,
  02-2787, 02-2832, 02-2889, 02-2921, 02-2933, 02-3053, 02-3508, 02-3574,
  02-3715, 02-3755, and 02-3798, the Securities Actions.

  	
   

  

 

ORDER PRELIMINARILY APPROVING SECURITIES LITIGATION
SETTLEMENT,

DIRECTING PROVISION OF NOTICE AND SCHEDULING
SETTLEMENT HEARING

 

WHEREAS,
the parties to the above-described class action (“Action”) have applied for an
order, pursuant to Rule 23(e) of the Federal Rules of Civil Procedure, fixing
certain matters in connection with a proposed settlement of the Action, in
accordance with a Settlement Agreement (the “Proposed Settlement”) entered into
by the parties as of December 31, 2004, which is incorporated herein by
reference, and dismissing the Action upon the terms and conditions set forth in
the Settlement Agreement;

 

NOW,
THEREFORE, pursuant to Rule 23(e) of the Federal Rules of Civil
Procedure, upon the agreement of the parties, and after consideration of the
Settlement Agreement and the exhibits annexed thereto,

 

IT IS HEREBY ORDERED that:

 

1.          The
representations, agreements, terms, and conditions of the parties’ Proposed
Settlement, as embodied in the Settlement Agreement and the

 

 

exhibits attached
thereto, are preliminarily approved pending a final hearing on the Proposed
Settlement as provided herein.

 

2.             For
purposes of the Proposed Settlement only, the Court finds and determines that
the Action may proceed as a class action pursuant to Rules 23(a) and 23(b)(3)
of the Federal Rules of Civil Procedure, on behalf of a class consisting of all
Persons, including Xcel employees, who purchased or otherwise acquired for
value common stock of Xcel Energy, Inc. (“Xcel”) or Senior Notes issued by NRG
Energy, Inc. (“NRG Senior Notes”) (consisting of 7.75% notes due 2011 and
8.625% notes due 2031) during the period beginning January 31, 2001 through
July 25, 2002, inclusive (“Class Period”) whether pursuant to prospectus, in
open-market transactions, or otherwise, except the defendants, any member of
the immediate family of any Individual Defendant, and any legal representative,
heir, controlling person, successor, predecessor in interest or assign of any
defendant (“Settlement Class” or “Class”). Also for purposes of the Proposed
Settlement only, the Court further finds and determines, pursuant to Rule 23(a)
of the Federal Rules of Civil Procedure, that Chips Investments Limited
Partnership, Steven Aanenson, Beverly K. Aanenson, Harry C. Andrews, Thomas R.
Perry, Jr., Lloyd and Barbara Amundson Charity Foundation, Lake Benton
Bancorporation, Inc., L.A. Amundson Scholarships, Inc. and Catholic Workman (“Representative
Plaintiffs”) and counsel of record will fairly and adequately represent the
interests of the Settlement Class in enforcing their rights in the Action.

 

3.             Pursuant
to Rule 23(g), the Court appoints as co-lead counsel for the Class the law
firms of Chestnut & Cambronne, P.A. and Berger & Montague, P.C. Based
on the proceedings in this matter to date and the documents on file with the

 

2

 

Court, the Court
concludes that Class counsel has and will represent the Class fairly and
adequately. Appointment of the above-named counsel as Class counsel is
supported by the significant work that Class counsel has performed in
identifying and investigating the potential claims in this action, the experience
of Class counsel in handling class actions and securities actions, Class
counsel’s knowledge of the securities laws, and the resources that Class
counsel has committed to the prosecution of this action.

 

4.             For
purposes of the Proposed Settlement only, the Court appoints Jack L. Chestnut
and the law firm of Chestnut & Cambronne P.A., Minneapolis, Minnesota, as
Plaintiffs’ Settlement Counsel to act on behalf of the Settlement Class, the
Representative Plaintiffs, and the other Class Counsel with respect to the
Proposed Settlement. The Court authorizes Plaintiffs’ Co-Lead Counsel to enter
into the Settlement Agreement on behalf of all Class Counsel, the
Representative Plaintiffs, and the Settlement Class, and to bind them all to
the duties and obligations contained therein, subject to final approval by the
Court of the Proposed Settlement.

 

5.             Having
reviewed the proposed form of Notice of Pendency of Class Action and Derivative
Action, Proposed Settlements, Motions for Attorneys’ Fees and Settlement Fairness
Hearing submitted by the parties as Exhibit A-l to the Settlement Agreement (“Notice
of Settlement Hearing”), the Court hereby approves such Notice of Settlement
Hearing and directs that Plaintiffs’ Settlement Counsel shall mail, or cause to
be mailed, such Notice of Settlement Hearing to all members of the Settlement
Class (“Class Members”) and owners of Xcel Energy, Inc. common stock as of
December 27, 2004, who can be identified through reasonable effort. The mailing
is to be made by

 

3

 

first-class United States
mail, postage prepaid, at least 45 days prior to the date of the Settlement
Hearing.

 

6.             Having
reviewed the proposed form of Summary Notice of Pendency of Class Action and
Derivative Action, Proposed Settlements, Motions for Attorneys’ Fees and
Settlement Fairness Hearing submitted by the parties as Exhibit A-2 to the
Settlement Agreement (“Summary Notice”), the Court hereby approves such Summary
Notice and directs that Plaintiffs’ Settlement Counsel shall cause such Summary
Notice to be published once in the national edition of The Wall Street
Journal, Minneapolis Star Tribune, and St. Paul Pioneer Press, no
more than 10 days after the mailing of the Notice of Settlement Hearing and at
least 35 days prior to the Settlement Hearing.

 

7.             The
Court finds and determines that mailing of the Notice of Settlement Hearing and
publication of the Summary Notice constitute the best notice to the Settlement
Class practicable under the circumstances, constitute due and sufficient notice
of the matters set forth in said Notices to all persons entitled to receive
notice, and fully satisfy the requirements of due process, of 15 U.S.C. §
78u-4(a)(7), and of Rule 23 of the Federal Rules of Civil Procedure.

 

8.             Any
Class Member who desires to request exclusion from the Settlement Class must
submit a written request for exclusion in the form and manner required by the
Notice of Settlement Hearing. Such request for exclusion must be addressed to
Analytics, Inc., in an envelope marked “Request for Exclusion” and received or
postmarked on or before March 17, 2005; must refer to the action In Re Xcel
Energy, Inc., Securities Litigation, Civil File No. 02-2677 (DSD/FLN); must
include

 

4

 

a statement that the
Class Member wishes to be excluded from participation in the Proposed
Settlement; and must provide the quantity (i.e., the number of shares or the
principal value of notes) of Xcel common stock or NRG Senior Notes, respectively,
purchased during the Class Period, and the dates of such purchases. Copies of
such requests for exclusion must also be served upon, and received by, the
following counsel on or before that same date:

 

	
   

  	
  Jack L. Chestnut

  
	
   

  	
  Chestnut &
  Cambronne, P.A.

  
	
   

  	
  3700 Campbell Mithun
  Tower

  
	
   

  	
  222 South Ninth Street

  
	
   

  	
  Minneapolis, MN 55402

  
	
   

  	
  Plaintiffs’
  Settlement Counsel

  
	
   

  	
   

  
	
   

  	
  John
  M. Newman, Jr.

  
	
   

  	
  Jones
  Day

  
	
   

  	
  North
  Point

  
	
   

  	
  901
  Lakeside Avenue

  
	
   

  	
  Cleveland,
  OH 44114

  
	
   

  	
  Defendants’
  Settlement Counsel

  

 

9.             A
hearing will be held by this Court in the Courtroom of The Honorable David S.
Doty, U.S. Federal Building, 300 South Fourth Street, Minneapolis, Minnesota
55415, at 9:30 a.m. on April 1, 2005 (“Settlement Hearing”), to determine: (a)
whether the Proposed Settlement should be approved as fair, reasonable,
adequate, and in the best interests of the Settlement Class; (b) whether a
final judgment should be entered substantially in the form of Exhibit B to the
Settlement Agreement; (c) whether the Representative Plaintiffs’ proposed plan
of distribution of the settlement proceeds as described in the Notice of
Settlement Hearing (“Plan of Distribution”) should be approved as fair and
reasonable to the Settlement Class; and (d) whether to approve the motion of
Plaintiff’s Co-Lead Counsel, on behalf of lead plaintiffs and Class Counsel,

 

5

 

for an award of attorneys’
fees, costs, and expenses (“Fee and Expense Petition”). The Settlement Hearing
is subject to continuation or adjournment by the Court without further notice.

 

10.           Prior
to the Settlement Hearing, Plaintiffs’ Co-Lead Counsel shall cause an affidavit
to be filed with the Court certifying that the Notice of Settlement Hearing has
been provided and the Summary Notice has been published as directed in
Paragraphs 4 and 5 of this Order.

 

11.           Any
Class Member who wishes to object to the Proposed Settlement, the Plan of
Distribution, and/or the Fee and Expense Petition, or to appear at the
Settlement Hearing and show cause, if any, why the same should not be approved
as fair, reasonable, adequate, and in the best interests of the Settlement
Class, or why a final judgment should not be entered thereon, must serve and
submit a written notice of intention to appear and written objections in the
form and manner required by the Notice of Settlement Hearing. Such notice of
intention to appear and objections must be addressed to Analytics, Inc.; must
refer to In Re Xcel Energy, Inc., Securities Litigation, Civil File No.
02-2677 (DSD/FLN); must be received by Analytics, Inc. by March 17, 2005, a
date which is in excess of 14 days prior to the date of the Settlement Hearing;
must provide, with respect to each transaction in Xcel common stock or NRG
Senior Notes made by such person during the Class Period, a statement setting
forth the date, type of transaction, price, and quantity (i.e., the number of
shares or the principal value of notes) of Xcel common stock or NRG Senior
Notes, respectively, involved; must provide a detailed statement of such person’s
specific objections to any matter before the Court and the grounds therefor;
must include all

 

6

 

documents and other
writings such person wishes the Court to consider; and must identify any
witnesses such person may call to testify and exhibits such person intends to
offer into evidence at the Settlement Hearing. Copies of all materials also
must be

submitted and received by
the following counsel on or before that same date:

 

	
   

  	
  Jack L. Chestnut

  
	
   

  	
  Chestnut &
  Cambronne, P.A.

  
	
   

  	
  3700 Campbell Mithun
  Tower

  
	
   

  	
  222 South Ninth Street

  
	
   

  	
  Minneapolis, MN 55402

  
	
   

  	
  Plaintiffs’ Settlement
  Counsel

  
	
   

  	
   

  
	
   

  	
  John M. Newman, Jr.

  
	
   

  	
  Jones Day

  
	
   

  	
  North Point

  
	
   

  	
  901 Lakeside Avenue

  
	
   

  	
  Cleveland, OH 44114

  
	
   

  	
  Defendants’ Settlement
  Counsel

  

 

12.           No
person shall be entitled to object to the Proposed Settlement, to the final
judgment to be entered in this Action, to any award of attorneys’ fees, costs,
and expenses to lead plaintiffs and Class Counsel, or otherwise to be heard,
except by serving and filing a written notice of intention to appear and
written objections in the form and manner, and by the date, required by the
Notice of Settlement Hearing. Any person who fails to object in the manner and
by the date required shall be deemed to have waived any objections, and shall
be forever barred from raising such objections in this or any other action or
proceeding.

 

13.           Based
upon the preliminary hearing and the Court’s analysis of the Plan of
Distribution, the Court determines that Xcel shares that were both purchased
and sold during the Class Period were not damaged.

 

7

 

14.           Having
reviewed the proposed Proof of Claim Form and Release submitted by the parties
as Exhibit A-3 to the Settlement Agreement, the Court hereby approves such
Proof of Claim Form and Release and directs that Plaintiffs’ Co-Lead Counsel
shall mail, or cause to be mailed, such Proof of Claim Form and Release at the
same time, in the same manner, and to the same persons, as provided in
Paragraph 5 with respect to the Notice of Settlement Hearing.

 

15.           In
order to share in any proceeds resulting from the settlement of this Action,
Class Members must submit a Proof of Claim Form and Release (“Proof of Claim”)
in the manner provided therein by no later than May 1, 2005. A Proof of Claim
submitted by mail shall be deemed to have been submitted when postmarked, if
mailed by first-class mail, registered mail, or certified mail, postage
prepaid, addressed in accordance with the instructions given in the Proof of
Claim. All other Proofs of Claim shall be deemed to have been submitted at the
time they are actually received by Analytics, Inc. Late claims shall be denied
as untimely.

 

16.           Upon
the entry of final judgment after the Settlement Hearing, all Class Members,
whether or not they have filed a Proof of Claim within the time provided, shall
be barred and enjoined from asserting any claims (except through the Proof of
Claim procedures) arising from the Settled Claims (as defined in Paragraph
V(A)(19) of the Settlement Agreement), and all Class Members shall be
conclusively deemed to have released any and all such claims.

 

17.           Upon
the entry of final judgment after the Settlement Hearing, and upon the
Effective Date of the final judgment contemplated by the Settlement Agreement,
which will occur three court days after the date upon which the judgment in

 

8

 

this Action becomes not
subject to further appeal or review, only persons who are Class Members shall
have rights in the distribution of the Settlement Fund created by the Proposed
Settlement, except as otherwise ordered by the Court.

 

18.           Pending
final determination of whether the Proposed Settlement should be approved,
neither any Representative Plaintiff nor any Class Member who has received
notice of the Proposed Settlement shall commence or prosecute, either directly,
representatively or in any other capacity, any action or proceeding in any
court or tribunal asserting any of the Settled Claims.

 

19.           The
Court reserves the right to adjourn or continue the Settlement Hearing, and any
adjournment or continuance may be without further notice of any kind other than
oral announcement at the Settlement Hearing or at any later hearing.

 

	
  Date: 

  	
   

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  David S. Doty

  
	
   

  	
  United States District
  Judge

  

 

9

 

EXHIBIT
A-1

 

UNITED STATES DISTRICT
COURT

DISTRICT OF MINNESOTA

 

	
  In Re Xcel Energy,
  Inc., Securities, Derivative

  	
   

  	
  Master File: Civil
  02-2677 (DSD/FLN)

  
	
  & “ERISA”
  Litigation

  	
   

  	
  MDL No. 1511

  
	
   

  	
   

  	
   

  
	
  This document relates
  to Case Nos. 02-2677, 02-2774, 02-2787, 02-2832, 02-2889, 02-2921, 02-2933,
  02-3053, 02-3508, 02-3574, 02-3715, 02-3755, and 02-3798, the Securities
  Actions, and Case No. 02-2931, the Derivative Action.

  	
   

  	
   

  

 

NOTICE OF PENDENCY
OF CLASS ACTION AND DERIVATIVE ACTION,

PROPOSED
SETTLEMENTS, MOTIONS FOR ATTORNEYS’ FEES AND

SETTLEMENT
FAIRNESS HEARING

 

If you purchased
or otherwise acquired for value the common stock of defendant Xcel Energy, Inc.
or NRG Senior Notes (as defined in the response to Question 7 below) between
January 31, 2001 through and including July 25, 2002, or if you are a current
Xcel shareholder, then you should read this notice .

 

A federal
court authorized this notice. This is not a solicitation from a lawyer. Please
do not call the court, Xcel Energy, or Bank of New York about this notice.
Additional information is available by calling toll-free 1-866-890-4859, or at www.xcelenergysettlement.com.

 

THIS NOTICE
AFFECTS YOUR LEGAL RIGHTS. PLEASE READ IT CAREFULLY. YOU MAY WISH TO CONSULT
YOUR ATTORNEY CONCERNING THIS NOTICE. NO CLAIM IS BEING MADE AGAINST YOU.

 

•                  The Settlement of the Securities Actions
will provide an $80 million settlement fund for the benefit of persons who
purchased or otherwise acquired for value shares of common stock of Xcel
Energy, Inc. (“Xcel”) between January 31, 2001 and July 25, 2002 (the “Class
Period”). The Settlement of the Derivative Action includes corporate governance
changes affecting how Xcel’s board of directors will function in the future.

•                  The Settlement of the Securities Actions
resolves lawsuits claiming that Xcel misled investors about the status and
prospects of its business, the terms of its credit agreements, its energy
trading practices and its relationship with NRG Energy, Inc. (“NRG”). The
Settlement of the Derivative Action resolves a lawsuit claiming that Xcel’s
directors and certain officers violated fiduciary duties that they owed to
Xcel.

•                  Your legal rights are affected
whether you act, or do not act. Read this notice carefully.

 

 

YOUR LEGAL
RIGHTS AND OPTIONS

 

	
  SUBMIT A CLAIM FORM

  	
   

  	
  The only way to get a payment, if you are
  eligible for one.

  
	
  EXCLUDE YOURSELF

  	
   

  	
  Get no payment. This is the only option that
  allows you ever to be part of any lawsuit against Xcel and the other
  defendants about the legal claims in the Securities Actions.

  
	
  OBJECT

  	
   

  	
  Write to the Court about why you do not like
  either Settlement.

  
	
  GO TO A HEARING

  	
   

  	
  Ask to speak in Court about the fairness of
  either Settlement.

  
	
  DO NOTHING

  	
   

  	
  Get no payment. Give up rights.

  

 

•                  These rights and options —and the deadlines to exercise them—are explained in this notice.

 

•                  The
Court in charge of this case still has to decide whether to approve the Settlements.
Payments will be made if the Court approves the Settlements and after any
appeals are resolved. This process could take a considerable amount of time.
Please be patient.

 

SUMMARY OF CLASS ACTION
AND DERIVATIVE SETTLEMENTS

 

Description of Securities
Actions and Derivative Action

 

The proposed Settlement
will resolve two lawsuits, the “Securities Actions” and the “Derivative
Action.” The Securities Actions were brought on behalf of persons who purchased
or otherwise acquired for value Xcel common stock and NRG Senior Notes, and the
Derivative Action was brought by an Xcel shareholder on behalf of Xcel against
certain of its current or former officers and directors. The plaintiffs in the
Securities Actions claim that the defendants made misleading statements that
caused the plaintiffs to pay inflated prices for the securities they purchased.
The Securities Actions are being settled for the payment of an $80 million
Settlement Fund. The plaintiff in the Derivative Action claims that Xcel
directors and certain officers violated fiduciary duties they owed to Xcel,
causing damage to Xcel. The Derivative Action is being settled with

 

2

 

an agreement to make certain prospective corporate governance changes
related to how Xcel’s board of directors operates, with the intention of
benefiting Xcel in the future.

 

Statement of Plaintiffs’
Recovery in Securities Actions

 

Under the Settlement of
the Securities Actions described in this notice, a Settlement Fund consisting
of $80 million in cash, plus interest accrued thereon, will be established. The
Net Settlement Fund will be distributed in the manner described in the Plan of
Distribution at pages      -     
below to persons who bought Xcel stock during the Class Period. Plaintiffs
estimate that there were approximately 148,927,191 million shares of Xcel
common stock traded during the Class Period as to which there may have been
damage. Plaintiffs estimate that the average recovery per share is $0.54 before
deduction of Court-awarded attorneys’ fees and expenses (assuming claims were
to be made for all damaged shares). A Class Member’s actual recovery will be a
proportion of the Net Settlement Fund determined by his, her or its approved
claim as compared to the total amount of approved claims of all Class Members
who submit proofs of claim. Purchasers of NRG Senior Notes will not receive any
payment.

 

Statement of Potential
Outcomes In Securities Actions

 

The parties disagree on
both liability and damages and do not agree on the average amount of damages
per share or per dollar of debt that would be recoverable if plaintiffs were to
prevail on each claim alleged. The Defendants deny that they are liable to the
Plaintiffs or the Class for any amount of money and deny that the Plaintiffs
and the Class have suffered any damage at all.

 

The lead
plaintiffs and plaintiffs’ counsel believe, based on the advice of experts they
have retained, that the total potential damages in the Securities Actions for

 

3

 

purchasers of Xcel common
stock are $354.9 million, if it were to be proved that the defendants violated
the securities laws. Defendants’ expert believes that even if the alleged
violations were found to have occurred, damages to purchasers of Xcel common
stock would be no more than $36.8 million, and could be as low as $15 million.
Plaintiffs’ expert believes that the total potential damages for purchasers of
NRG Senior Notes are $0. Defendants’ expert believes that if even liability
were to be established on claims relating to NRG Senior Notes, only nominal
damages, approximately $0, could be proven for those claims. The Court has
already ruled on the claims relating to NRG Senior Notes, and has dismissed
those claims with prejudice. Moreover, as a result of the bankruptcy of NRG
Energy, Inc., the claims relating to the NRG Senior Notes have been released as
against Xcel and present and former Xcel directors and officers.

 

Statement of Recovery On
Behalf of Xcel In Derivative Action

 

Unlike securities
litigation, which seeks recovery to individual shareholders, derivative
litigation instead is brought on behalf of the company itself, alleging that
the directors and/or certain officers breached their fiduciary duties,
resulting in injury to the company. The principal claims underlying the present
Derivative Action are that the directors of Xcel violated their fiduciary
duties by, among other things, failing to ensure that Xcel’s management made
full and accurate disclosures regarding certain operational risks the company
faced in connection with cross-default provisions of credit agreements with
lenders, and failing to have in place at the Company an adequate and effective
system of internal controls sufficient to ensure Xcel’s public statements and
filings with the Securities and Exchange Commission about its business and
finances were complete and accurate. The proposed Settlement of the Derivative
Action

 

4

 

described in this notice would address these alleged corporate
governance deficiencies. Specifically, the proposed changes, some of which
directly affect the Audit Committee, the Finance Committee and the Governance,
Compensation and Nominating Committee of the Board of Xcel include, among
others.

 

Audit Committee:
the Settlement requires that (i) at least one member of the Audit Committee
must also serve on the Finance Committee, (ii) the Audit Committee must
coordinate and consult with the Finance Committee for the purpose of receiving
all reasonably available information relevant to the Audit Committee’s
determination of whether the Company’s audited and unaudited financial
disclosures appropriately disclose material financial and operational risk
exposures the Company faces, and (iii) the Audit Committee will increase its
minimum number of annual meetings from four to no fewer than five;

 

Finance Committee:
the Settlement (i) broadens the mandate of the Finance Committee to include
responsibility to coordinate with management regarding the oversight and
control of operational risk exposures at the Company, (ii) grants to committee
members the right to call a meeting of the committee whenever a majority
determines such meeting is necessary or advisable, (iii) further reflects the Audit
Committee changes described above by requiring that (a) the Finance Committee
include at least one member of the Audit Committee, and (b) the Finance
Committee must coordinate and consult with the Audit Committee for the purpose
of sharing all reasonably available information relevant to the Audit
Committee’s determination of whether the Company’s audited and unaudited
financial disclosures appropriately disclose material financial and operational
risk exposures the Company faces; and

 

5

 

Governance, Compliance and Nominating Committee: the Settlement imposes a minimum number
of annual meetings of not fewer than four.

 

In addition, the
proposed Settlement requires the Board to direct management to undertake certain
internal assessments of communication and information processes within the
Company, with the purpose of developing improved systems as appropriate in
order to strengthen the flow of material information to the Board regarding,
among other areas, the Company’s material financial commitments and credit
arrangements, and the public reporting of significant conditions and
contingencies regarding such commitments and arrangements. A detailed listing
of all the proposed corporate governance changes is in the Stipulation of
Settlement of the Derivative Action, which you can obtain by following the
instructions in the answers to questions 27 and 28.

 

Statement of Potential
Outcomes In Derivative Action

 

To institute a derivative
action, a shareholder must either make a demand on the company’s board to take
appropriate remedial action (including, as appropriate, bringing legal action
against some or all of the directors themselves), or demonstrate in the
complaint that making such a demand would have been futile, based on, for
example, the conduct of the defendants themselves in connection with the
alleged wrongdoing. The District Court dismissed Plaintiff’s derivative claims
based on a finding that, among other things, Plaintiff had failed adequately to
allege why she did not first make a demand on the Board of Xcel before she
brought her Derivative Action. Plaintiff contends that her complaint more than
adequately alleged the reasons why making such demand, in light of the acts and
failures to act by the Board during 2001 and the first half of 2002, was not
required by law.

 

6

 

Plaintiff filed an
appeal to the U.S. Court of Appeals for the Eighth Circuit on this issue. Both
Plaintiff and the Derivative Defendants have fully briefed their arguments on
this appeal, and the parties were awaiting the appellate court’s setting a date
for argument on the matter. If Plaintiff were to lose this appeal, the
Derivative Action would be over, with no relief, in the form of changes to
corporate governance or otherwise, resulting from it. If Plaintiff were to win
on this appeal, the Derivative Defendants could find themselves facing personal
liability to Xcel, posing a significant risk, despite the Derivative
Defendants’ consistent position that they did not breach their fiduciary duties
to Xcel. Plaintiff believes the proposed Settlement of the Derivative Action
offers real benefit to Xcel in the form of significant corporate governance
changes, in light of the risks and uncertainties of continued litigation.

 

Statement of Attorneys’
Fees or Costs Sought in Securities Actions

 

Plaintiffs’
counsel in the Securities Actions will ask the Court to award them attorneys’
fees of 25% of the gross Settlement Fund, along with costs and expenses
(including, among other items, fees to be paid to the Claims Administrator, an
award to the lead plaintiffs for their time and expenses devoted to this
action, and a portion of the fee for plaintiff’s counsel in the Derivative
Action) not to exceed $1,200,000. Therefore, the total attorneys’ fees, costs,
and expenses which are requested in the Securities Actions are a maximum of
$21,200,000. If the Court agrees to award this amount, the total attorneys’
fees, costs, and expenses will amount to 26.5% of the total recovery. The
attorneys’ fees, costs, and expenses sought by plaintiffs’ counsel would amount
to $0.14 per share for those shares that suffered damages, if the request is
granted in full. The requested attorneys’ fees are based upon the complex
nature of the litigation, the

 

7

 

considerable effort
devoted to prosecuting the action, the risk assumed by plaintiffs’ counsel, the
difficulties encountered in obtaining the settlement, the time devoted to
resolving this lawsuit and the significant recovery to the Xcel shareholders.
In this type of litigation it is customary for counsel to be awarded a
percentage of the common fund recovery as their attorneys’ fees.

 

Statement of Attorneys’
Fees and Costs Sought in Derivative Action

 

Plaintiff’s
Counsel in the Derivative Action intend to submit an application to the Court
for an award of attorneys’ fees and expenses in the amount of $250,000. This
amount reflects only approximately 50% of the time and expense these counsel
have incurred in litigating this case to date. One-half of whatever amount, if
any, the Court approves as attorneys’ fees and reimbursement of expenses in the
Derivative Action will be paid as an expense of the Securities Action pursuant to
the Stipulation of Settlement in that action, and one-half (in an amount not to
exceed $125,000) will be paid separately by Xcel.

 

Identification of
Plaintiffs’ Representatives

 

Both the
plaintiffs and the defendants are represented by multiple counsel.

 

Plaintiffs’ co-lead counsel in the Securities Actions are:

 

	
  Jack L. Chestnut

  	
  Sherrie
  R. Savett

  
	
  Karl
  L. Cambronne

  	
  Phyllis
  M. Parker

  
	
  Jeffrey
  D. Bores

  	
  Berger
  & Montague, P.C.

  
	
  Chestnut
  & Cambronne, P.A.

  	
  1622
  Locust Street

  
	
  3700
  Campbell Mithun Tower

  	
  Philadelphia,
  PA 19103

  
	
  222
  South Ninth Street

  	
   

  
	
  Minneapolis,
  MN 55402

  	
   

  

 

Primary plaintiff’s counsel in
the Derivative Action are:

 

	
  Karen L. Morris

  	
  Bruce G. Murphy

  

 

8

 

	
  Patrick F. Morris

  	
  Law Offices of Bruce G. Murphy

  
	
  Morris and Morris LLC

  	
  265 Llwyds Lane

  
	
  Counselors
  At Law

  	
  Vero
  Beach, FL 32963

  
	
  1105 North Market
  Street

  	
   

  
	
  Suite 803

  	
   

  
	
  Wilmington, DE 19801

  	
   

  

 

Further information
regarding the lawsuits and this notice may be obtained by contacting these
counsel.

 

Reasons for Settlement of the
Securities Actions

 

The principal
reason for the Settlement of the Securities Actions is the benefit to be
provided to the Class now. This benefit must be compared to the risk that no
recovery might be achieved if the Court grants the Defendants’ anticipated
motions for summary judgment or if the Defendants prevail after a contested
trial and appeals that would likely take years to complete. The lead plaintiffs
in the Securities Actions believe that the proposed Settlement is fair,
reasonable and adequate for Class Members. The lead plaintiffs have reached
this conclusion after considering, among other things, the strengths and
weaknesses of the claims against the Defendants, including Defendants’
contentions, among others, that Defendants did not make any materially false or
misleading statements, that Plaintiffs cannot prove any damages were caused by
the alleged misconduct, that any allegedly false or misleading statements were
not made with an intent to defraud; that as to the NRG Senior Note claims,
those claims are independently barred as against Xcel and several other of the
defendants by orders in the NRG bankruptcy proceedings, and those claims also
failed to survive a motion to dismiss in the Court handling this lawsuit; and
that even if plaintiffs were to prevail, their

 

9

 

provable damages may well
be substantially less than the proposed settlement amount for purchasers of
Xcel shares, or nothing for purchasers of NRG Senior Notes.

 

Reasons for Settlement of
the Derivative Action

 

The principal reason for
the Settlement of the Derivative Action at this time is to ensure important
corporate governance changes are made at the Company. The scope and timing of
this benefit must be weighed against the potential that, should the Eighth
Circuit Court of Appeals deny Plaintiff’s appeal, the opportunity to implement
these significant corporate governance changes could be lost. As such,
Plaintiff believes the proposed settlement is fair, reasonable and adequate to
Xcel within the context of the litigation as it presently stands. The proposed
Derivative Settlement would require the implementation of significant corporate
governance changes while offering the Derivative Defendants the certainty of a
full release of liability.

 

10

 

WHAT THIS NOTICE CONTAINS

 

Table of Contents

 

	
  Summary Notice

  
	
   

  
	
  Summary
  of Class Action and Derivative Settlements

  
	
   

  
	
   

  	
  Description
  of Securities Actions and Derivative Action

  
	
   

  	
   

  
	
   

  	
  Statement
  of Plaintiffs’ Recovery in Securities Actions

  
	
   

  	
   

  
	
   

  	
  Statement
  of Potential Outcomes In Securities Actions

  
	
   

  	
   

  
	
   

  	
  Statement
  of Recovery On Behalf of Xcel In Derivative Action

  
	
   

  	
   

  
	
   

  	
  Statement
  of Potential Outcomes In Derivative Action

  
	
   

  	
   

  
	
   

  	
  Statement
  of Attorneys’ Fees or Costs Sought in Securities Actions

  
	
   

  	
   

  
	
   

  	
  Statement
  of Attorneys’ Fees and Costs Sought in Derivative Action

  
	
   

  	
   

  
	
   

  	
  Identification
  of Plaintiffs’ Representatives

  
	
   

  	
   

  
	
   

  	
  Reasons
  for Settlement of the Securities Actions

  
	
   

  	
   

  
	
   

  	
  Reasons
  for Settlement of the Derivative Action

  
	
   

  	
   

  
	
  Basic Information

  
	
   

  
	
   

  	
  1.  Why
  did I get this notice package?

  
	
   

  	
   

  
	
   

  	
  2.  What are
  these lawsuits about?

  
	
   

  	
   

  
	
   

  	
  3.  What
  has happened during the litigation of the Securities Actions?

  
	
   

  	
   

  
	
   

  	
  4.  What
  has happened during the litigation of the Derivative Action?

  
	
   

  	
   

  
	
   

  	
  5.  Why
  are the Securities Actions a class action?

  
	
   

  	
   

  
	
   

  	
  6.  Why
  are there proposed settlements of the Securities Actions and the Derivative
  Action?

  
	
   

  	
   

  
	
  Who
  Is In The Settlement of the Securities Actions

  
	
   

  	
   

  
	
   

  	
  7.  How
  do I know if I am part of the Settlement of the Securities Actions?

  

 

11

 

	
   

  	
  8.  Are
  there exceptions to being included?

  
	
   

  	
   

  
	
   

  	
  9.  What
  if I am still not sure if I am included in the class in the Securities
  Actions?

  
	
   

  	
   

  
	
  The
  Benefits of the Settlements —What You May Get 

  
	
   

  	
   

  
	
   

  	
  10.  What
  does the Settlement of the Securities Actions provide?

  
	
   

  	
   

  
	
   

  	
  11.  What
  does the Settlement of the Derivative Action provide?

  
	
   

  	
   

  
	
   

  	
  12.  What
  will my payment be under the Settlement of the Securities Actions?

  
	
   

  	
   

  
	
  How You
  Get A Payment —Submitting A Claim Form

  
	
   

  
	
   

  	
  13.  How
  can I get a payment under the Settlement of the Securities Actions?

  
	
   

  	
   

  
	
   

  	
  14.  When
  would I get my payment?

  
	
   

  	
   

  
	
   

  	
  15.  What
  am I giving up to get a payment or stay in the Class?

  
	
   

  	
   

  
	
  Excluding
  Yourself From the Settlement of the Securities Actions 

  
	
   

  	
   

  
	
   

  	
  16.  How
  do I get out of the proposed Settlement of the Securities Actions?

  
	
   

  	
   

  
	
   

  	
  17.  If
  I do not exclude myself from the Class in the Securities Actions, can I sue
  Xcel and other defendants for the same thing later?

  
	
   

  	
   

  
	
   

  	
  18.  If
  I exclude myself, can I get money from the proposed Settlement of the Securities
  Actions?

  
	
   

  	
   

  
	
  The Lawyers Representing
  You

  
	
   

  
	
   

  	
  19.  Do
  I have a lawyer in this case?

  
	
   

  	
   

  
	
   

  	
  20.  How
  will the lawyers be paid?

  
	
   

  	
   

  
	
  Objecting To The
  Settlements

  
	
   

  
	
   

  	
  21.  How
  can I tell the Court if I do not like the proposed Settlements?

  
	
   

  	
   

  
	
   

  	
  22.  In
  the Securities Actions, what is the difference between objecting and
  excluding myself from the Settlement?

  
	
   

  	
   

  
	
  The Court’s
  Settlement Fairness Hearing

  

 

12

 

	
   

  	
  23.  When
  and where will the Court decide whether to approve the proposed Settlements?

  
	
   

  	
   

  
	
   

  	
  24.  Do
  I have to come to the hearing?

  
	
   

  	
   

  
	
   

  	
  25.  May I
  speak at the hearing?

  
	
   

  	
   

  
	
  If You Do Nothing

  
	
   

  
	
   

  	
  26.  What
  happens if I do nothing at all?

  
	
   

  	
   

  
	
  Getting More Information

  
	
   

  	
   

  
	
   

  	
  27.  Are
  there more details about the proposed Settlements?

  
	
   

  	
   

  
	
   

  	
  28.  How
  do I get more information?

  
	
   

  	
   

  
	
  Plan
  of Distribution of Net Settlement Fund Among Class Members in the Securities
  Actions 

  
	
   

  	
   

  
	
  Special
  Notice to Securities Brokers And Other Nominees

  

 

13

 

BASIC INFORMATION

 

1.                                       Why did I get this notice package?

 

You or someone in
your family may have purchased shares of Xcel common stock or NRG Senior Notes
between January 31, 2001 through and including July 26, 2002, and therefore you
may be a Class Member in the Securities Actions. Or, you may be a current
shareholder of Xcel, and thus have a potential interest in the Settlement of
the Derivative Action.

 

The Court directed that this Notice be sent to
you because you have a right to know about a proposed settlement of a class
action or derivative lawsuit, and about all of your options, before the Court
decides whether to approve the Settlement of the Securities Actions or the
Derivative Action. If the Court approves the Settlements and after objections
and appeals are resolved, an administrator appointed by the Court will make the
payments that the Settlement of the Securities Actions allows.

 

This package explains the lawsuits, the
Settlements, the legal rights of Class Members and current Xcel shareholders,
what benefits are available, who is eligible for them, and how to get them.

 

The Court in
charge of the cases is the United States District Court for the District of
Minnesota. The case is assigned to Senior United States District Judge David S.
Doty. The people who sued are called the plaintiffs, and the people who have
been sued are called the defendants. The defendants in the Securities Actions
are Xcel, Wayne Brunetti, Edward J. McIntyre, James J. Howard, David H.
Peterson, Leonard A. Bluhm, William T. Pieper, Gary R. Johnson, Richard C.
Kelly, and Luella G. Goldberg. The defendants in the Derivative Action are
Messrs. Brunetti, McIntyre and Howard,

 

14

 

plus members of Xcel’s
board of directors (C. Coney Burgess, David A. Christensen, R. R. Hemminghaus,
A. Barry Hirschfeld, Douglas W. Leatherdale, Albert F. Moreno, Margaret A.
Preska, A. Patricia Sampson, Allan L. Schuman, Rodney E. Slifer and W. Thomas
Stephens).

 

2.                                       
What are these lawsuits about?

 

Xcel is a
combination electric and gas utility engaged in production and distribution
throughout the central and mountain states. Xcel formerly owned a subsidiary
called NRG Energy, Inc. NRG was an unregulated “independent power producer”
that operated power plants and sold power in the wholesale market. In the time
since the end of the Class Period, NRG has filed for bankruptcy and been
reorganized as a company separate from Xcel. The plaintiffs in the Securities
Actions claim that the Defendants misled the investing public about Xcel’s
relationship with NRG, about the effects that NRG’s business problems could
have on Xcel, and conversely the effect of Xcel’s credit circumstances on NRG’s
financial health and expectations. Specifically, they claim that the defendants
concealed information about a “cross-default” provision in two of Xcel’s bank
credit agreements. Under that provision, Xcel would lose access to two lines of
credit if NRG were to default on its debts above a certain size. When the
existence of the cross-default provisions was revealed at the end of the Class
Period, Xcel’s stock price declined, which the plaintiffs say caused damages to
the Class Members. Plaintiffs also claim that the defendants concealed
information about allegedly improper “round-trip” trades of energy in which
Xcel’s subsidiaries are alleged to have participated with other utility
companies.

 

15

 

The Derivative
Action alleges that the defendants who were Xcel officers violated their
fiduciary duties to Xcel by not making accurate disclosures in the public press
and filings with the SEC about the existence of the cross-default provisions in
certain of Xcel’s credit agreements, and the potential adverse impact NRG’s
deteriorating financial condition could have on Xcel should these provisions be
triggered, as well as about the likelihood of the Company being able to
continue to pay its traditional $1.50 dividend, and whether its subsidiaries
participated in certain improper alleged round-trip energy trading practices
during the California energy crisis in 1999 and 2000.

 

In addition, the Derivative Action also
alleges that the defendants who were directors of Xcel violated their fiduciary
duties by not ensuring that Xcel’s management made full and accurate public
disclosures on those above-listed topics, and by not ensuring that Xcel had in
place a system of oversight and internal controls sufficient to ensure that the
company’s public statements about its business and finances were complete and
accurate.

 

The Defendants
in both the Securities Actions and Derivative Action have denied that they did
anything wrong. The Court has not decided that any of the Defendants did
anything wrong.

 

3.             What has
happened during the litigation of the Securities Actions?

 

Beginning on
or about July 31, 2002, a series of lawsuits was filed in the United States
District Court for the District of Minnesota on behalf of proposed classes of
securities purchasers. The complaints generally alleged that defendants Xcel
and certain current and former officers and directors of Xcel and also of Xcel’s
troubled then-subsidiary NRG violated the federal securities laws by making
misstatements regarding

 

16

 

Xcel’s business and prospects,
including, among other things, by not properly disclosing (i) allegedly
improper “round-trip trading” of energy that had the claimed effect of boosting
reported revenue, and (ii) the terms and conditions of Xcel’s revolving credit
agreements, in particular that those agreements contained cross-default
provisions tying Xcel’s access to credit to the financial fortunes of NRG, and
similarly connecting NRG’s financial health to that of Xcel. As a result of
these misstatements, the complaints alleged, the price of Xcel common stock and
NRG Senior Notes was
artificially inflated, causing damages to the members of the proposed classes.

 

On November
13, 2002, the Court entered an order consolidating the securities cases for all
purposes and appointing the “Chips Group” as lead plaintiffs and its attorneys
as co-lead counsel in the Securities Actions. On January 24, 2003, a
consolidated amended complaint was filed (the “Complaint,” as subsequently
amended and corrected). The Complaint alleged that Xcel and the individual
defendants violated §§ 10(b) and 20(a) of the Securities Exchange Act of 1934 (“Exchange
Act”) (15 U.S.C. §§ 78j(b) and 78t(a) and Rule 10b-5 promulgated thereunder)
and §§ 11 and 15 of the Securities Act of 1933 (“Securities Act”) (15 U.S.C. §§
77k and 77o), causing damages to defined groups of purchasers of Xcel stock and
NRG Senior Notes.

 

In March 2003,
the Judicial Panel on Multidistrict Litigation issued an order coordinating the
Securities Actions, for pretrial purposes only, with shareholder derivative and
ERISA lawsuits filed against certain current and former directors and officers
of Xcel (and, as to the ERISA actions, also against Xcel itself). That
coordinated proceeding was captioned In re Xcel Energy, Inc. Securities,
Derivative and ERISA Litigation, MDL No. 1511.

 

17

 

By order dated September 30, 2003, the Court
granted in part and denied in part defendants’ motion to dismiss the Complaint
in the Securities Actions. See  In Re Xcel Energy, Inc. Securities,
Derivative & ERISA Litigation, 286 F. Supp. 2d 1047 (D. Minn. 2003).
The Court denied the motion to dismiss as it related to claims under the
Exchange Act brought on behalf of those who purchased or acquired Xcel common
stock during the proposed class period. The Court granted the motion as it
related to all claims brought on behalf of purchasers of NRG Senior Notes,
which were advanced under both Rule 10b-5 and the Securities Act. The Court
dismissed the NRG Senior Note claims with prejudice, concluding as a matter of
law that the prospectuses under which the NRG Senior Notes were offered did not
contain material omissions or misstatements, and that the Rule 10b-5 claim on
behalf of NRG noteholders was “too attenuated to withstand the scrutiny
required by the [Private Securities Litigation Reform Act],” and failed to
raise any inference of fraud as to any of the defendants. Before the beginning
of settlement negotiations that ultimately led to this Agreement, counsel
focusing on claims regarding the NRG Senior Notes had independently concluded
that an appeal of the Court’s dismissal of the noteholder claims would not be
pursued in view of the very limited prospect for a reversal of the dismissal
order. Moreover, the discovery taken following the Court’s order on the motion
to dismiss did not uncover evidence that would have supported any of the claims
that had been raised in the Complaint on behalf of purchasers of NRG Senior
Notes.

 

On May 14, 2003,
after commencement of the Securities Actions, NRG filed a petition for
reorganization under Chapter 11 of the United States Bankruptcy Code. On
November 24, 2003, following notice and hearing in accordance with the
provisions of

 

18

 

the Bankruptcy Code and Rules,
the United States Bankruptcy Court for the Southern District of New York
entered an order confirming NRG’s plan of reorganization and authorizing its
entry into a settlement agreement with Xcel. One effect of the confirmation
order, the plan and the Xcel agreement was to release various NRG-related
claims against Xcel and present and former Xcel directors and officers,
including all claims alleged in the Complaint relating to the NRG Senior Notes
as against Xcel and the majority of the individual defendants.

 

The parties to the Securities Actions, after
engaging in substantial discovery, were ordered by the court to engage in
mediation. Through the mediation and follow-up contacts, the parties agreed to
a settlement, the terms of which are embodied in a Settlement Agreement and
described in this Notice. A prerequisite to any settlement of the Securities
Actions (in which the Settlement Fund is funded largely by insurance proceeds)
was the full and final resolution and release of all claims asserted in the
Complaint, including those asserted in respect of Xcel common stock and those
asserted in respect of NRG Senior Notes (which full and final resolution is
accomplished by the Settlement Agreement), as well as full and final resolution
of both the Derivative Action and actions brought by participants and
beneficiaries of Xcel employee benefit plans against Xcel and certain of its
officers and directors under the Employee Retirement Income Security Act of
1974.

 

4.             What has happened during the litigation of the Derivative Action?

 

On or about July 25, 2002, Xcel disclosed,
among other facts, the existence of the cross-default provisions in important
credit agreements with lenders, its inability to remedy liquidity and credit
difficulties with respect to NRG and regulatory investigations

 

19

 

of alleged “round-trip” energy
trading practices by the Company. Following this disclosure, Plaintiff, through
her counsel, undertook an investigation of these problems and their root
causes, and determined to file a derivative complaint against the then-Board of
Directors and certain officers of Xcel. Plaintiff, in her original Derivative
Complaint, filed in August 2002, and in her subsequent Amended Derivative
Complaint, filed on or about January 15, 2004, alleged that the Derivative
Defendants breached their fiduciary duties to Xcel in several ways, including
by making and permitting others at the Company to make false and misleading
representations regarding the existence of the cross-default provision in key
credit agreements with lenders, and the likely materially adverse impact on
Xcel of NRG’s continually deteriorating financial condition as potentially
triggering these provisions, as well as in failing to ensure the Company had in
place an adequate and appropriate system of oversight and controls to ensure Xcel’s
financial reports were recorded and maintained in accordance with Generally Accepted
Accounting Principles (GAAP) and that representations by Company officials, in
the general press and in public filings with the SEC, were complete and
accurate when made.

 

Rule 23.1 of
the Federal Rules of Civil Procedure provides that a plaintiff is not required
to make a demand on a board of a company prior to bringing a derivative claim
if such demand would be futile. One way of demonstrating futility is by
alleging sufficient facts to demonstrate that the directors of the company face
an independent substantial likelihood of liability based upon their own acts or
failures to act in connection with the wrongful conduct at issue. Plaintiff
believed that based on, among other factors, what she saw as multiple warnings
and other “red flags” provided to the

 

20

 

Board during the eighteen month
period of 2001 and the first half of 2002 of the wrongful conduct at issue and
the repeated false and misleading representations by Company officials
regarding the lack of any direct link between NRG’s financial problems and Xcel’s
financial condition, she had adequately alleged in her Amended Complaint that
the Derivative Defendants did face a substantial likelihood of liability, and
thus, she had no requirement to make a demand on the Board of Xcel prior to
initiating her Derivative Action.

 

Following full briefing and oral argument, by
Order dated July 12, 2004, the United States District Court for the District of
Minnesota granted the Derivative Defendants’ motion to dismiss the Derivative
Action, finding, principally, that Plaintiff had failed to allege with
sufficient particularity why she failed to make a demand on the Board of
Directors of Xcel to take corrective action before she filed her complaint.

 

On August 10, 2004, Plaintiff filed a Notice
of Appeal of the district court’s dismissal of the Derivative Action with the
Eighth Circuit Court of Appeals. After the parties fully briefed the appeal,
they initiated settlement discussions in an effort to resolve the Derivative
Action pursuant to a proposed global settlement of all outstanding claims
presently facing Xcel and its directors and officers.

 

In December 2004, based on arm’s-length
negotiations, the parties were able to arrive at the present proposed
Settlement. A Stipulation of Settlement reflecting the terms and conditions of
the Settlement was entered into by the parties on December     ,
2004. Pursuant to this Settlement, the parties moved the Eighth Circuit Court
of Appeals on December 27, 2004 to remand the Derivative Action back to the
district

 

21

 

court for consideration of the
present proposed Settlement. That remand was granted by Order dated December
28, 2004.

 

5.             Why
are the Securities Actions a class action?

 

In a class action, one or more people called
class representatives sue on behalf of people who have similar claims. All
these people are a class or class members. One court resolves the issues for
all Class Members, except for those who exclude themselves from the Class.

 

6.             Why are there proposed settlements of the Securities
Actions and the Derivative Action?

 

In the Securities Actions, on the claims
brought on behalf of purchasers of Xcel stock, the Court did not decide in
favor of Plaintiffs or Defendants. Instead, both sides agreed to a settlement.
That way, they avoid the risks and cost of a trial, and the people affected
will get compensation. The class representatives and their attorneys think the
settlement is best for the class. On the claims that were brought on behalf of
purchasers of NRG Senior Notes in the Securities Actions, the Court found in
favor of the Defendants and dismissed all of the plaintiffs’ claims. Before the
start of the negotiations that led to this Settlement, the attorneys focusing
on claims as to purchase of NRG Senior Notes had independently concluded that
an appeal of the dismissal would not be pursued. Moreover, as a result of the
NRG bankruptcy, all claims relating to the NRG Senior Notes have been released
as against Xcel and Xcel’s current and former officers and directors. For these
reasons, under the Settlement, purchasers of NRG Senior Notes will receive no
payment.

 

22

 

As described above, in the Derivative Action, the Court dismissed the
plaintiff’s claims because it found that the plaintiff did not comply with the
procedural rules for filing derivative lawsuits (that is, a lawsuit filed by a
shareholder on behalf of a corporation). The plaintiff has appealed the Court’s
ruling. The Settlement will resolve that appeal and allow both sides to avoid
the costs and risks of the appeal.

 

WHO IS IN THE SETTLEMENT OF THE SECURITIES ACTIONS

 

To see if you will get money
from the Settlement of the Securities Actions, you first have to determine
whether you are a Class Member.

 

7.             How
do I know if I am part of the Settlement of the Securities Actions?

 

The Court directed, for the purposes of the
proposed Settlement of the Securities Actions, that everyone who fits the
following description is a Class Member: All Persons, including Xcel employees,
who purchased or otherwise acquired for value common stock of Xcel or NRG
Senior Notes (consisting of 7.75% notes due 2011 and 8.625% notes due 2031)
during the period beginning January 31, 2001 through July 26, 2002, inclusive,
except the defendants, any member of the immediate family of any individual
defendant, and any legal representative, heir, controlling person, successor,
predecessor in interest or assign of any defendant.

 

8.             Are
there exceptions to being included?

 

You are not a Class Member if you are one of
the Defendants in the Securities Actions, a member of the immediate family
(parents, spouses, siblings and children) of any of the Defendants, or a legal
representative, heir, successor in interest or assign of any such excluded
party.

 

23

 

If one of your mutual funds owned shares of
Xcel stock or NRG Senior Notes, that alone does not make you a Class Member.
You are a Class Member only if you directly purchased shares of Xcel common
stock or NRG Senior Notes yourself during the Class Period. Contact your broker
to see if you purchased shares of Xcel common stock or NRG Senior Notes during
the Class Period.

 

If you sold shares of Xcel common stock or
NRG Senior Notes during the Class Period, or held Xcel common stock at the
start of the Class Period, that does not make you a Class Member. You are a
Class Member only if you purchased or otherwise acquired for value your shares
of Xcel common stock or NRG Senior Notes between January 31, 2001 and July 26,
2002.

 

9.             What
if I am still not sure if I am included in the class in the Securities Actions?

 

If you are still not sure whether you are included, you can ask for
free help. You can call toll-free 1-866-890-4859
or visit www.xcelenergysettlement.com for more information. Or you can fill out
and return the claim form described below, in the response to question 13, to
see if you qualify.

 

THE BENEFITS
OF THE SETTLEMENTS — WHAT YOU MAY GET

 

10.           What
does the Settlement of the Securities Actions provide?

 

In exchange for the Settlement and dismissal
of the Securities Actions, Defendants have agreed to create an $80 million fund
to be divided, after taxes, fees and expenses, among Class Members who are
purchasers or acquirers for value of

 

24

 

Xcel common stock from January
31, 2001 to July 26, 2002 and submit a valid Proof of Claim form. Purchasers of
NRG Notes will receive nothing from the settlement.

 

11.           What does the Settlement of the Derivative Action provide?

 

In exchange for the Settlement and dismissal
of the Derivative Action, Xcel’s board of directors has agreed to make certain
corporate governance changes affecting how it functions, with the intent of
improving Xcel’s overall corporate governance systems and controls and thus
benefiting the company and its shareholders in the future. No money will be
paid to Xcel or its shareholders under the proposed Settlement of the
Derivative Action.

 

12.           What will my payment be under the Settlement of the Securities Actions?

 

If you are entitled to receive a payment from
the settlement fund, your share will depend on the total claims represented by
the valid Proof of Claim forms that Class Members send in, how many shares of
Xcel stock you bought or acquired, and when you bought or acquired and sold
them. Here is how it works:

 

By following the instructions on pages     -    
of this Notice, you can calculate what is called your Recognized Loss. It is
unlikely that you will get a payment for all of your Recognized Loss. After all
Class Members have sent in their Proof of Claim forms, the payment you get will
be a part of the Net Settlement Fund equal to your Recognized Loss divided by
the total of everyone’s Recognized Loss. See the Plan of Distribution on pages     -    
for more information on your Recognized Loss.

 

Purchasers of NRG Senior Notes will not receive
any payment under the Settlement. The settlement of the Derivative Action will
not involve any payments to any shareholders of Xcel.

 

25

 

HOW YOU GET
A PAYMENT — SUBMITTING A CLAIM FORM

 

13.           How can I get a payment under the Settlement of the
Securities Actions?

 

To qualify for a payment, you must send in a Proof of Claim form. A
Proof of Claim form is being circulated with this Notice. You may also get a
Proof fo Claim form on the Internet at www.xcelenergysettlement.com. Read the
instructions carefully, fill out the Proof of Claim form, include all the
documents the form asks for, sign it, and mail it postmarked no later than                 ,
2005.

 

14.           When would I get my payment?

 

The Court will hold a hearing on                         ,
2005, to decide whether to approve the Settlements. If the Court approves the
Settlements after that, there may be appeals. It is always uncertain whether
these appeals can be resolved, and resolving them can take time, perhaps more
than a year. It also takes time for all the Proofs of Claim to be processed.
Please be patient.

 

15.           What am I giving up to get a payment or stay in the Class?

 

If you are a Class Member in the Securities
Actions (see the definition of Class Member in the response to question 7
above) then, unless you exclude yourself, you are staying in the class, and
that means that upon the “Effective Date” (as defined below), you will release
all “Settled Claims” (as defined below).

 

“Settled Claims” means any and all claims,
actions, causes of action, rights or liabilities, whether arising out of state
or federal law, including Unknown Claims, of any Class Member, which exist or
may exist against any of the defendants, their respective past and present
parents, subsidiaries, and affiliated corporations and entities, the

 

26

 

predecessors and successors in
interest of any of them, and all of their respective past and present officers,
directors, employees, agents, partners, representatives, spouses, heirs, executors,
administrators, insurers, reinsurers, attorneys, and assigns (collectively, “Released
Parties”), by reason of any matter, event, cause or thing whatsoever arising
out of, relating to, or in any way connected with: (a) the purchase,
acquisition, sale or disposition of Xcel common stock or NRG Senior Notes; (b)
any claims that a Class Member may have for recovery to or for that Class
Member as a shareholder of Xcel or holder of NRG Senior Notes; and (c) any of
the facts, circumstances, transactions, events, occurrences, acts, omissions or
failures to act that have been alleged or referred to in any pleading or other
paper filed with the Court in the Securities Actions; or (d) any facts,
circumstances, transactions, events, occurrences, acts, omissions or failures
to act that could have been alleged in the Securities Actions and that relate
to the Class Member’s investment or potential investment in Xcel or NRG.

 

The “Effective
Date” will occur on the third court day following the date on which the Court’s
judgment approving the Settlement of the Securities Actions and dismissing the
Securities Actions with prejudice and on the merits becomes Final; provided,
however, that the Effective Date shall not occur unless and until the
settlements of the Derivative Action and the ERISA Action become Final. If the
pending settlements of the Derivative Action and the ERISA Action do not become
Final, then the Effective Date shall not occur and the Settlement of the
Securities Actions shall terminate in accordance with the provisions of the
Settlement Agreement. “Final” means the date upon which the Court’s judgment
becomes not subject to further appeal or review.

 

27

 

Thus, “Final” means, without
limitation, the date of expiration of the time for the filing or noticing of
any appeal from the final judgment of the Court without any appeal being filed
therein; or, if an appeal is filed in the Securities Actions, the Derivative
Action or the ERISA Action, the latest of the dates upon which the judgment in
the Securities Actions, the Derivative Action or the ERISA Action is finally
affirmed on appeal, or the appeal is finally dismissed without any request for
further discretionary review of such appellate decision; or, if further
discretionary review of such appellate decision is sought, the latest date upon
which such discretionary review is denied or, if granted, results in final
affirmance of the judgment in this Action, the Derivative Action or the ERISA
Action. (The “ERISA Action” means, collectively, the cases captioned Newcome
and Banks v. Xcel Energy, Inc., et al., Civil No. 03-2218 (DSD/FLN) (D.
Minn.) and Barday v. Xcel Energy, Inc., et al., Civil No. 03-2219
(DSD/FLN) (D. Minn.).)

 

28

 

If you are a member of the Settlement Class and remain a member, all of
the Court’s orders will apply to and legally bind you.

 

EXCLUDING
YOURSELF FROM THE SETTLEMENT OF THE SECURITIES ACTIONS

 

If you do not want a payment from the Settlement
of the Securities Actions, or do not want to be in the Settlement Class, but
want to keep the right to sue Xcel and the other defendants, on your own, about
the issues in the Securities Actions, then you must take steps to get out. This
is called excluding yourself from — or “opting out” of — the Class. Defendants
may withdraw from and terminate the Settlement if more than a certain number of
claimants exclude themselves from the Class.

 

16.           How
do I get out of the proposed Settlement of the Securities Actions?

 

To exclude yourself from the Settlement
Class, you must send a letter by mail stating that you “request exclusion from
the Class in In re Xcel Energy, Inc.
Securities Litigation, Master File No. 02-2677.” Your letter should
include the date(s), price(s), and number of Xcel shares or principal value of
NRG Senior Notes that you bought or otherwise acquired for value during the
Class Period. In addition, be sure to include your name, address and telephone
number, and your signature. You must mail your exclusion request postmarked no
later than                       ,
2005 to:

 

In re Xcel Energy, Inc. Securities,
Derivative & “ERISA” Litigation

c/o Analytics Incorporated

Claims Administrator

Post Office Box 2007

Chanhassen, MN 55317-2007

 

You cannot exclude yourself by
telephone or email. If you ask to be excluded, you will not get any payment
from the Settlement if you were eligible for one, and you cannot

 

29

 

 

object to the Settlement. If you exclude
yourself, you will not be legally bound by anything that happens in the
Securities Actions, and you may be able to sue Xcel and the other defendants in
the future.

 

17.           If
I do not exclude myself from the Class in the Securities Actions, can I sue
Xcel and the other defendants for the same thing later?

 

No. Unless you exclude yourself, you give up
any rights to sue Xcel and the other defendants for any and all Settled Claims.
If you have a pending lawsuit, speak to your lawyer in that case immediately.
You must exclude yourself from this Class
to continue your own lawsuit asserting any of the Settled Claims. Remember, the
exclusion deadline is                     ,
2005.

 

18.           If
I exclude myself, can I get money from the proposed Settlement of the Securities
Actions?

 

No. If you exclude yourself, do not send in a claim form to ask for any
money. But you may sue, continue to sue, or be part of a different lawsuit
against Xcel and the other defendants.

 

THE LAWYERS REPRESENTING YOU

 

19.           Do
I have a lawyer in this case?

 

The Court
ordered that the law firms of Chestnut & Cambronne, P.A. and Berger &
Montague P.C. will act as co-lead counsel and represent the Class in the
Securities Actions. The law firms of Morris and Morris LLC Counselors At Law
and Law Offices of Bruce G. Murphy represent the plaintiff in the Derivative
Action. You will not be charged

 

30

 

for these lawyers. If you want
to be represented by your own lawyer, you may hire one at your own expense.

 

20.           How
will the lawyers be paid?

 

The lawyers for the Class in the Securities Actions are asking the
Court for an award of attorneys’ fees of 25% of the $80 million Settlement Fund
and reimbursement of their expenses incurred in connection with prosecuting the
case. Any award of attorneys’ fees and reimbursement of expenses to the lawyers
for the Class in the Securities Actions will be paid out of the Settlement
Fund. The lawyers for the plaintiff in the Derivative Action are asking the
Court for an award of attorneys’ fees and expenses of $250,000, of which
$125,000 will be encompassed within the expenses paid out of the Settlement
Fund, and $125,000 will be paid separately by Xcel.

 

OBJECTING TO THE SETTLEMENTS

 

You can tell the Court that you do not agree
with the Settlement of the Securities Actions or of the Derivative Action, or
some part of either settlement.

 

21.           How
can I tell the Court if I do not like the proposed Settlements?

 

If you are a Class Member in the Securities
Actions, you can object to the proposed Settlement of the Securities Actions if
you do not like any part of it. Similarly, if you are a current Xcel
shareholder, you can object to the proposed settlement of the Derivative Action
if you do not like any part of it. You can give reasons why you think the Court
should not approve either settlement. The Court will consider your views.

 

To object to the Settlement of the Securities
Actions, you must send a signed letter saying that you object to the proposed
Settlement in the In re Xcel Energy, Inc.

 

31

 

Securities Litigation, Master File No.
02-2677. Be sure to include your name, address and telephone number, and your
signature; identify the date(s), price(s), and number of shares of Xcel stock
or the principal value of NRG Senior Notes that you bought or otherwise
acquired for value during the Class Period; and state the reasons why you
object to the proposed Settlement. Mail the objection to each of the following
addresses postmarked no later than                           ,
2005:

 

	
  Court

  	
   

  	
  Plaintiffs’ Counsel

  	
   

  	
  Defendants’ Counsel

  
	
  c/o Analytics Incorporated

  	
   

  	
  Jack Chestnut, Esq.

  	
   

  	
  John M. Newman, Jr., Esq.

  
	
  Claims Administrator

  	
   

  	
  Chestnut & Cambronne,
  P.A.

  	
   

  	
  Jones Day

  
	
  Post Office Box 2007

  	
   

  	
  3700 Campbell Mithun Tower

  	
   

  	
  North Point

  
	
  Chanhassen, MN 55317-2007

  	
   

  	
  222 South Ninth Street

  	
   

  	
  901 Lakeside Ave.

  
	
   

  	
   

  	
  Minneapolis, MN 55402

  	
   

  	
  Cleveland, OH 44114

  
	
   

  	
   

  	
  and

  	
   

  	
   

  
	
   

  	
   

  	
  Sherrie R. Savett

  	
   

  	
   

  
	
   

  	
   

  	
  Berger & Montague,
  P.C.

  	
   

  	
   

  
	
   

  	
   

  	
  1622 Locust Street

  	
   

  	
   

  
	
   

  	
   

  	
  Philadelphia, PA 19103

  	
   

  	
   

  

 

32

 

To object to the Settlement of the Derivative Action, you must send a
signed letter saying that you object to the proposed Settlement in In re Xcel Energy, Inc. Derivative Litigation,
Master File No. 02-2677. Be sure to include your name, address and telephone
number; your signature; state whether you are a current shareholder of Xcel
and, if so, how many shares you own; and state the reasons why you object to
the proposed Settlement. Mail the objection to each of the following addresses
postmarked no later than                     ,
2005:

 

	
  Court

  	
   

  	
  Plaintiff’s Counsel

  	
   

  	
  Defendants’ Counsel

  
	
  c/o Analytics Incorporated

  	
   

  	
  Patrick F. Morris

  	
   

  	
  John M. Newman, Jr., Esq.

  
	
  Claims Administrator

  	
   

  	
  Morris and Morris LLC

  	
   

  	
  Jones Day

  
	
  Post Office Box 2007

  	
   

  	
  Counselors At Law

  	
   

  	
  North Point

  
	
  Chanhassen, MN 55317-2007

  	
   

  	
  1105 North Market Street

  	
   

  	
  901 Lakeside Avenue

  
	
   

  	
   

  	
  Suite 803

  	
   

  	
  Cleveland, OH 44114

  
	
   

  	
   

  	
  Wilmington, DE 19801

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  and

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Bruce G. Murphy

  	
   

  	
   

  
	
   

  	
   

  	
  Law Offices of Bruce G.
  Murphy

  	
   

  	
   

  
	
   

  	
   

  	
  265 Llwyds Lane

  	
   

  	
   

  
	
   

  	
   

  	
  Vero Beach, FL 32963

  	
   

  	
   

  

 

22.           In
the Securities Actions, what is the difference between objecting and excluding
myself from the Settlement?

 

Objecting is simply telling the Court that you do not like something
about the proposed Settlement. You can object to the Settlement of the
Securities Actions only if you stay in the Class. Excluding yourself is telling
the Court that you do not want to be part of the Class. If you exclude
yourself, you have no basis to object because the case no longer affects you.

 

33

 

THE COURT’S
SETTLEMENT FAIRNESS HEARING

 

The Court will hold a hearing to decide whether to approve the proposed
Settlements of the Securities Actions and the Derivative Action. You may attend
and you may ask to speak, but you do not have to.

 

23.           When and where will the Court decide whether to
approve the proposed Settlements?

 

The Court will hold a Settlement Fairness
Hearing at            .m. on                         ,
2005, at the United States Courthouse, 300 South Fourth Street, Minneapolis, MN
55415. At this hearing, the Court will consider whether the Settlements are
fair, reasonable and adequate. If there are objections, the Court will consider
them. The Court will listen to people who have asked to speak at the hearing.
After the hearing, the Court will decide whether to approve the Settlements and
may also decide how much to pay to the counsel for the Class and counsel for
the plaintiff in the Derivative Action. We do not know how long these decisions
will take. You should be aware that the Court may change the date and time of
the hearing. Thus, if you want to come to the hearing, you should check with
the Court before coming to be sure that the date and/or time has not changed.

 

24.           Do
I have to come to the hearing?

 

No. The lawyers for the Class will answer
questions the Court may have about the Securities Actions, and the lawyers for
the plaintiff in the Derivative Action will answer any questions the Court may
have about that case. But you are welcome to come at your own expense. If you
send an objection, you do not have to come to Court to talk about it. As long
as you mailed your written objection on time, the Court will consider it. You may
also pay your own lawyer to attend, but it is not necessary. Class

 

34

 

Members and Xcel shareholders
do not need to appear at the hearing or take any other action to indicate their
approval.

 

25.           May
I speak at the hearing?

 

If you object to either Settlement, you may
ask the Court for permission to speak at the Settlement Fairness Hearing. To do
so, you must include with your objection (see question 21 above) a statement
saying that it is your “Notice of Intention to Appear” in In re Xcel Energy, Inc. Securities Litigation,
Master File No. 02-2677 or In re Xcel
Energy, Inc. Derivative Litigation, Master File No. 02-2677. Persons who intend to object to the
Settlement of the Securities Actions, the Settlement of the Derivative Action,
the Plan of Distribution, and/or the applications for an award of attorneys’
fees and reimbursement of expenses and who desire to present evidence at the
Settlement Fairness Hearing must include in their written objections the identity
of any witnesses they may call to testify and exhibits they intend to offer
into evidence at the Settlement Fairness Hearing. You cannot speak at the
hearing about the proposed settlement of the Securities Actions if you exclude
yourself from the Class in the Securities Actions.

 

IF YOU DO
NOTHING

 

26.           What
happens if I do nothing at all?

 

If you do nothing, you will get no money from
the Settlement of the Securities Actions, even if you otherwise might have been
eligible for a payment. Also, if you are a Class Member in the Securities
Actions and you do not exclude yourself from the Settlement, you will not be
able to start a lawsuit, continue with a lawsuit, or be part of any other
lawsuit against Xcel or the other defendants about the issues in the Securities
Actions ever again.

 

35

 

GETTING MORE
INFORMATION

 

27.           Are
there more details about the proposed Settlements?

 

This notice summarizes the proposed
Settlements. More details are in a Securities Litigation Settlement Agreement,
dated December     , 2004 (as to the Securities Actions)
and a Stipulation of Settlement, dated December     , 2004
(as to the Derivative Action). You can get a copy of the Securities Litigation
Settlement Agreement by writing to Chestnut & Cambronne, P.A., 3700
Campbell Mithun Tower, 222 South Ninth Street, Minneapolis, MN 55402. You can
get a copy of the settlement agreement in the Derivative Action by writing to
Morris and Morris LLC Counselors At Law, 1105 North Market Street, Suite 803,
Wilmington, DE 19801 or Law Offices of Bruce G. Murphy, 265 Llwyds Lane, Vero
Beach, FL 32963.

 

You can also call the Claims Administrator
toll-free at 1-866-890-4859, or
visit the website at www.xcelenergysettlement.com,
where you will find answers to commonly asked questions about the Settlements,
a claim form for the Securities Actions, plus other information to help you
determine whether you are a Class Member in the Securities Actions and whether
you are eligible for a payment.

 

28.           How
do I get more information?

 

Electronic access to all filings in these
cases, including the pleadings, the settlement agreements, and the orders
entered by the Court, is available at no charge at the Office of the Clerk of
Court, United States District Court for the District of Minnesota, 300 South
Fourth Street, Minneapolis, MN 55415 during regular business hours. A copy fee
for electronic reproduction is required in accordance with 28 U.S.C. § 1914.

 

36

 

PLAN OF
DISTRIBUTION OF NET SETTLEMENT FUND AMONG CLASS MEMBERS

IN THE SECURITIES ACTIONS

 

The $80 million settlement amount in the Securities Actions and the
interest earned thereon will constitute the Gross Settlement Fund. The Gross
Settlement Fund, less all taxes, approved costs, fees and expenses (the “Net
Settlement Fund”) will be distributed to members of the Class who submit
acceptable Proofs of Claim (“Authorized Claimants”).

 

The Claims Administrator will determine each Authorized Claimant’s pro
rata share of the Net Settlement Fund based upon each Authorized Claimant’s “Recognized
Loss.”

 

XCEL COMMON STOCK PURCHASES

 

The amount of Recognized Loss for purchases of Xcel common stock during
the Class Period will be calculated as follows:

 

1.             For shares of common
stock that were both purchased and sold between January 31, 2001 and July 25,
2002, inclusive, there shall be no Recognized Loss.

 

2.             For shares of common
stock purchased between January 31, 2001 and November 28, 2001, inclusive, and
retained at the end of trading on July 25, 2002, the Recognized Loss shall be
the lesser of:

 

(1)           10% of $2.689, or
$0.2689 per share; or

(2)           the difference between
the purchase price per share and the sales price per share for each share sold
between July 26, 2002 and October 24, 2002; or

(3)           the difference between
the purchase price per share and $9.01 for each share still held at the close
of trading on October 24, 2002.

 

37

 

3.             For shares of common
stock purchased between November 29, 2001 and July 25, 2002, inclusive, and
retained at the end of trading on July 25, 2002, the Recognized Loss shall be
the lesser of:

 

(1)           $2.689 per share; or

(2)           the difference between
the purchase price per share and the sales price per share for each share sold
between July 26, 2002 and October 24, 2002; or

(3)           the difference between
the purchase price per share and $9.01 for each share still held at the close
of trading on October 24, 2002.

 

4.             For shares of common
stock acquired in exchange for shares of NRG common stock via an exchange offer
commenced in March 2002, the Recognized Loss shall be $2.689 per share.

 

PURCHASERS OF NRG SENIOR NOTES

 

Purchasers of
NRG Senior Notes will receive no payment for the following reasons:

 

(1)  As part of this action, Catholic Workman
brought a claim on behalf of purchasers of NRG Senior Notes during the Class
Period.

 

(2)  That claim was dismissed by the federal court
with prejudice and on the merits, as described above in response to question 3.
See In re Xcel Energy, Inc. Securities,
Derivative & ERISA Litigation, 286 F. Supp. 2d 1047 (D. Minn.
2003).

 

(3)  Before the negotiations began that led to the
proposed Settlement of the Securities Actions, the attorneys for Catholic
Workman had concluded that an appeal of the Court’s dismissal order would lack
merit, and that they therefore would not pursue one.

 

(4)  After the Securities Actions were filed, NRG
filed for bankruptcy. As a result of the bankruptcy proceedings (as described
above in response to question 3), the claims of NRG Senior Note purchasers have
been released against Xcel and Xcel’s current and former directors and
officers.

 

38

 

(5)  Discovery taken in the Securities Actions has
not led to evidence that would support a claim on behalf of purchasers of NRG
Senior Notes.

 

Each Authorized Claimant shall be allocated a
pro rata share of the Net Settlement Fund based on his, her or its Recognized
Loss as compared to the total Recognized Losses of all Authorized Claimants.

 

Class Members who do not submit acceptable
Proofs of Claim will not share in the Settlement proceeds. Class Members who do
not either submit a request for exclusion or submit an acceptable Proof of
Claim will nevertheless be bound by the Settlement and the Order and Final
Judgment of the Court dismissing the Securities Actions.

 

Distributions will be made to Authorized
Claimants after all claims have been processed and after the Court has finally
approved the Settlements. If any funds remain in the Net Settlement Fund by
reason of un-cashed checks or otherwise, then, after the Claims Administrator
has made reasonable and diligent efforts to have Class Members who are entitled
to participate in the distribution of the Net Settlement Fund cash their
distributions, any balance remaining in the Net Settlement Fund one year after
the initial distribution of such funds shall be distributed to a charity
selected by Plaintiffs’ Settlement counsel, with the approval of the Court.

 

The Defendants and their respective past and present parents,
subsidiaries and affiliated entities, the predecessors and successors in
interest of any of them, and all of their past and present officers, directors,
employees, agents, partners, representatives, spouses, heirs, executors,
administrators, insurers, reinsurers, attorneys, and assigns shall have no
responsibility or liability whatsoever for the investment or distribution of

 

39

 

the Settlement Fund, the Net
Settlement Fund, the Plan of Distribution or the determination, administration,
calculation, or payment of any Proof of Claim or non-performance of the Claims
Administrator, the payment or withholding of taxes owed by the Settlement Fund
or any losses incurred in connection therewith.

 

SPECIAL NOTICE TO SECURITIES BROKERS AND OTHER NOMINEES

 

If you
purchased or otherwise acquired Xcel common stock or NRG Senior Notes during
the period from January 31, 2001 through and including July 26, 2002, for the
beneficial interest of a person or organization other than yourself, the Court
has directed that, WITHIN TEN DAYS OF YOUR RECEIPT OF THIS NOTICE, you either
(a) provide to the Claims Administrator the name and last known address of each
person or organization for whom or which you purchased such stock or notes
during such time period (preferably on computer-generated mailing labels or,
electronically, in MS Word or WordPerfect files (label size Avery #5162), or in
an MS Excel data table setting forth (1) title/registration, (2) street
address, and (3) city/state/zip), or (b) request additional copies of this
Notice and the Proof of Claim form, which will be provided to you free of
charge, and within seven days mail the Notice and Proof of Claim form directly
to the beneficial owners of the securities referred herein. If you choose to
follow alternative procedure (b), the Court has directed that, upon such
mailing, you send a statement to the Claims Administrator confirming that the
mailing was made as directed. You are entitled to reimbursement from the
Settlement Fund of your reasonable expenses actually incurred in connection
with the foregoing, including reimbursement of postage expense and the cost of
ascertaining the names and addresses of beneficial owners.

 

40

 

Those expenses will be paid
upon request and submission of appropriate supporting documentation. All
communications concerning the foregoing should be addressed to the Claims
Administrator: Analytics. Inc., P.O. Box 2007, Chanhassen, MN, 55317-2007, or
by

e-mail to info@xcelenergysettlement.com.

 

PLEASE DO NOT CONTACT XCEL, THE
COURT, OR THE U.S. DISTRICT COURT CLERK TO ASK ANY QUESTIONS ABOUT THIS
LITIGATION.

 

 

	
  Dated:

  	
  Minneapolis,
  Minnesota

  	
  BY ORDER OF
  THE COURT

  
	
   

  	
   

  	
   

  
	
   

  	
                    ,
  200    

  	
  Clerk of the
  Court

  

 

41

 

EXHIBIT A-2

 

COURT-ORDERED LEGAL NOTICE

 

If you bought or acquired Xcel
Energy stock or NRG Energy, Inc.

Senior Notes in 2001 or 2002, or
are a current Xcel Energy

shareholder, you should read this
notice.

 

A settlement
has been proposed in a securities class action lawsuit about the prices of Xcel
Energy, Inc. stock and NRG Energy, Inc. Senior Notes, and in a derivative
lawsuit about the actions of Xcel’s board of directors and officers. The
settlement of the securities class action will provide $80 million to pay
claims from investors who bought or otherwise acquired for value Xcel stock
between January 31, 2001 and July 25, 2002. If you qualify, you may send in a claim
form to get benefits, or you can exclude yourself from the settlement, or
object to it. The settlement of the derivative lawsuit will provide for changes
to the procedures governing how Xcel’s board of directors operates, with the
intention of benefiting Xcel in the future.

 

The United
States District Court for the District of Minnesota authorized this notice. The
Court will have a hearing to decide whether to approve the settlements. 

 

Who’s Included?

 

You are a
Class Member in the securities class action if you bought or acquired for value
shares of Xcel common stock or NRG Senior Notes (consisting of 7.75% notes due
2011 and 8.625% notes due 2031) during the period from January 31, 2001 to July
25, 2002, inclusive. You are a Class Member only if you bought shares of Xcel
stock or NRG Senior Notes individually, not simply through a mutual fund. If
you sold Xcel stock or NRG Senior Notes during this period, you are a Class
Member only if those shares or Senior Notes were purchased during this period.
Xcel officers and directors, as well as their immediate family members and representatives,
are not Class Members.

 

Contact your
broker to see if you hold or held shares of Xcel stock. If you’re not sure whether
you are included, you can get more information, including a detailed notice, at
www.xcelenergysettlement.com or by calling toll-free 1-866-890-4859.

 

What’s
This About?

 

The securities
class action claimed that Xcel and certain of its officers made misleading disclosures
that caused investors to pay inflated prices for the securities they purchased.
The alleged misleading information concerned the terms of Xcel’s bank credit
agreements and their effect on Xcel and NRG, Xcel’s liquidity, the effects on
Xcel of NRG’s business difficulties and on NRG in connection with Xcel, and
Xcel’s energy trading practices. The Court did not decide which side was right
on the claims relating to Xcel stock. The Court ruled in favor of the defendants
on the claims relating to NRG Senior Notes, and dismissed those claims, in a
ruling that counsel had determined not to appeal. Both sides have agreed to a
settlement to ensure a resolution and provide benefits to Class Members who
purchased Xcel stock.

 

 

The derivative
lawsuit claimed that Xcel’s board of directors violated their fiduciary duties
by failing to prevent the allegedly misleading statements that generally form
the basis for the claims in the securities lawsuit, and by failing to ensure
that Xcel had an adequate system of internal controls for information flow and
reporting purposes. The derivative lawsuit also claimed that certain current or
former Xcel officers violated their fiduciary duties by making the allegedly
misleading statements cited in the securities lawsuit. The Court dismissed the plaintiff’s
claims in the derivative lawsuit because it decided that the plaintiff did not
follow the procedural rules for filing a derivative lawsuit on behalf of Xcel;
the plaintiff has appealed that ruling.

 

What Does the Settlement Provide?

 

In the
settlement of the securities class action, Xcel and its insurers agreed to
create a fund of $80 million which, after deduction of court-ordered attorneys’
fees and expenses, would be divided among Class Members who purchased Xcel
stock and send in valid claim forms. A Settlement Agreement, available at the
website below, describes all of the details about the proposed settlement.

 

Your share of
the fund will depend on the number of valid claim forms that Class Members send
in, how many shares of Xcel stock you bought, and when you bought and sold them.
Generally, if you bought more shares and have more Recognized Losses (as
explained in the detailed notice), you will get more money. If you bought fewer
shares and have fewer Recognized Losses, you will get less. Purchasers of NRG
Senior Notes will not receive payments.

 

If every
eligible Class Member sends in a valid claim form, the average payment will be 54
cents for each share of stock bought during the class period, before deduction
for court-ordered attorneys’ fees and expenses. The number of eligible
claimants who send in claims varies widely from case to case. If fewer than
100% of the eligible Class Members submit valid claims, you could get more
money.

 

The settlement
of the derivative lawsuit provides that Xcel will make changes to how its board
of directors operates, with the intention of improving Xcel’s corporate
governance and benefiting the company in the future.

 

How Do You
Ask For A Payment?

 

A detailed
notice and claim form package contains everything you need. Just call or visit the
website below to get one. To qualify for a payment, you must send in a claim
form. Claim forms are due by                     ,
2005.

 

What Are Your Other Options?

 

If you don’t
want benefits from the settlement of the securities class action or don’t want to
be legally bound by the settlement, you must exclude yourself by                     ,
2005, or you won’t be able to sue, or continue to sue, the defendants about the
legal claims in the securities

 

 

class action. If you exclude yourself, you
can’t get any benefits from this settlement. If you stay in the settlement, you
may object to it by                      ,
2005. If you are a current Xcel shareholder and disagree with the settlement of
the derivative lawsuit, you may object to it by               ,
2005. The detailed notice explains how to exclude yourself or object.

 

The Court will
hold a hearing on                          ,
2005, to consider whether to approve the settlements and requests by the plaintiffs’
lawyers for attorneys’ fees and reimbursement of expenses. You may ask to
appear at the hearing, but you don’t have to. For more information, call
toll-free 1-866-890-4859, visit the website www.xcelenergysettlement.com, write
to Xcel Energy Settlement, c/o Analytics, Inc., P.O. Box 2007, Chanhassen, MN
55317-2007, or write to plaintiffs’ co-lead counsel, Jack L. Chestnut, Esq. and
Karl L. Cambronne, Esq., Chestnut & Cambronne, P.A., 3700 Campbell Mithun
Tower, 222 South Ninth St., Minneapolis, MN 55402, or Sherrie R. Savett, Esq.
and Phyllis M. Parker, Esq., Berger & Montague, P.C., 1622 Locust St.,
Philadelphia, PA 19103..

 

	
  1-866-890-4859

  	
  www.xcelenergysettlement.com

  

 

 

EXHIBIT A-3

 

	
   

  	
   

  	
  In Re
  Xcel Energy, Inc., Securities,

  	
   

  	
  Complete
  and Sign this

  
	
   

  	
   

  	
  Derivative
  & “ERISA” Litigation

  	
   

  	
  Form and
  Return

  
	
   

  	
   

  	
  c/o
  Analytics Incorporated

  	
   

  	
  Postmarked
  No Later Than

  
	
   

  	
   

  	
  Claims
  Administrator

  	
   

  	
               
  , 2005.

  
	
   

  	
   

  	
  Post
  Office Box 2007

  	
   

  	
   

  
	
   

  	
   

  	
  Chanhassen,
  MN 55317-2007

  	
   

  	
   

  

 

PROOF
OF CLAIM AND RELEASE

 

	
   

  	
  WRITE ANY NAME AND ADDRESS CORRECTIONS BELOW OR IF

  THERE IS NO PREPRINTED DATA TO THE LEFT, YOU MUST PROVIDE

  THE NAME AND ADDRESS OF THE BENEFICIAL OWNER(S) HERE:

  
	
   

  	
   

  
	
   

  	
  Name

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Address:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  City:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  State/Country and Zip Code:

  
	
   

  	
   

  
	
   

  	
   

  
	
  PLEASE COMPLETE THE FOLLOWING:

  	
   

  
	
   

  	
   

  
	
  Taxpayer ID or Social Security Number

  	
   

  
	
   

  	
   

  
	
  Telephone Number (Day)

  	
   

  	
  Telephone Number (Night)

  
	
   

  	
   

  
	
  Check One:

  	
   

  
	
   

  	
   

  
	
  o  Individual

  	
  o  Corporation

  	
  o  Joint Owners

  	
  o  IRA/401(k)

  
	
  o  Estate

  	
  o  Trust

  	
  o  Other

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
    (Specify)

  	
   

  	
   

  
							

 

 

IF YOU PURCHASED OR OTHERWISE ACQUIRED FOR VALUE THE COMMON STOCK OF
XCEL ENERGY, INC. (“XCEL”) DURING THE PERIOD FROM JANUARY 31, 2001 THROUGH JULY
25, 2002, INCLUSIVE (“CLASS PERIOD”), AND WERE DAMAGED THEREBY, YOU ARE A
“CLASS MEMBER” AND YOU MAY BE ENTITLED TO SHARE IN THE SETTLEMENT PROCEEDS.
(EXCLUDED FROM THE CLASS ARE DEFENDANTS, MEMBERS OF THE IMMEDIATE FAMILIES OF
THE INDIVIDUAL DEFENDANTS, AND THE LEGAL REPRESENTATIVES, HEIRS, CONTROLLING
PERSONS, SUCCESSORS, AND PREDECESSORS IN INTEREST OR ASSIGNS OF ANY DEFENDANT.)

 

IF YOU ARE A CLASS MEMBER, YOU MUST COMPLETE AND SUBMIT THIS FORM IN
ORDER TO BE ELIGIBLE FOR ANY SETTLEMENT BENEFITS.

 

YOU MUST COMPLETE AND SIGN THIS PROOF OF CLAIM AND MAIL IT BY FIRST
CLASS MAIL, POSTMARKED NO

LATER THAN
                              ,
2005 TO THE FOLLOWING ADDRESS:

 

In Re Xcel Energy, Inc.,
Securities, Derivative & “ERISA” Litigation

c/o Analytics Incorporated

Claims Administrator

Post Office Box 2007

Chanhassen, MN 55317-2007

 

YOUR FAILURE TO SUBMIT YOUR CLAIM BY
                          ,
2005 WILL SUBJECT YOUR CLAIM TO REJECTION AND PRECLUDE YOU FROM RECEIVING ANY
PAYMENTS IN CONNECTION WITH THE SETTLEMENTS OF THIS LITIGATION. DO NOT MAIL OR
DELIVER YOUR CLAIM TO THE COURT OR TO ANY OF THE PARTIES OR THEIR COUNSEL AS
ANY SUCH CLAIM WILL BE DEEMED NOT TO HAVE BEEN SUBMITTED. SUBMIT YOUR CLAIM
ONLY TO THE CLAIMS ADMINISTRATOR.

 

[BARCODE]

 

STATEMENT
OF CLAIM

 

1.             I purchased or otherwise acquired for value
the common stock of Xcel Energy, Inc. (“Xcel”) during the time period beginning
January 31, 2001 through July 25, 2002, inclusive, and was damaged thereby. (Do
not submit this Proof of Claim if you did not purchase or otherwise acquire
Xcel common stock during this period).

 

2.             By submitting this Proof of Claim, I state
that I believe in good faith that I am a Class Member as defined above and in the Notice Of Pendency of Class
Action and Derivative Action, Proposed Settlements, Motions for Attorneys’Fees, and Settlement Fairness Hearing
(the “Class Notice”), or am acting for such person; that I am not a Defendant
in the Action or anyone excluded
from the Class; that I have read and understand the Class Notice; that I
believe that I am entitled to
receive a share of the Net Settlement Fund; that I elect to participate in the
proposed Settlement described in the Class Notice; and that I have not submitted a request for exclusion. (If you
are acting in a representative capacity on behalf of a Class Member (e.g., as an executor,
administrator, trustee, or other representative), you must submit evidence of
your current authority to act on
behalf of that Class Member. Such evidence would include, for example, letters
testamentary, letters of
administration, or a copy of the trust documents.)

 

3.             I
have set forth where requested below all relevant information with respect to
each purchase or other acquisition (including dividend reinvestment) of Xcel
common stock during the Class Period, and each sale, if any, of such
securities. I agree to furnish additional information to the Claims
Administrator to support this claim if requested to do so.

 

4.             I have enclosed photocopies of the
stockbroker’s confirmation slips, statements, relevant portions of my taxreturns or other documents evidencing
each purchase, acquisition, sale or retention of Xcel common stock listed below
in support of my claim. (IF ANY
SUCH DOCUMENTS ARE NOT IN YOUR POSSESSION, PLEASE OBTAIN A COPY OR EQUIVALENT DOCUMENTS FROM YOUR BROKER OR
TAX ADVISOR BECAUSE THESE DOCUMENTS ARE NECESSARY TO PROVE AND PROCESS YOUR CLAIM.)

 

5.             I understand that the information contained
in this Proof of Claim is subject to such verification as the Claims Administrator may request or as the
Court may direct, and I agree to cooperate in any such verification.

 

6.             Upon the occurrence of the Effective Date (as
defined in the Class Notice) my signature hereto will constitute a full and complete release, remise and
discharge by me and my heirs, executors, administrators, predecessors,
successors, and assigns (or, if
I am submitting this Proof of Claim on behalf of a corporation, a partnership,
estate or one or more other persons,
by it, him, her or them, and by its, his, her or their heirs, executors,
administrators, predecessors, successors, and assigns) of each of the “Released Parties” (as defined in the Class
Notice) with respect to which the settlement was approved, of all “Settled Claims” (as defined in the
Class Notice).

 

7.             NOTICE
REGARDING ELECTRONIC FILES: Certain claimants with large numbers of
transactions may request, or may be requested, to submit information regarding
their transactions in electronic files. All Claimants MUST submit a manually
signed paper Proof of Claim form listing all their transactions whether or not
they also submit electronic copies. A single “umbrella” Proof of Claim form
submitted by institutions on behalf of all claimants they are filing for will
not be accepted. If you wish to file your claim electronically, you must
contact the Claims Administrator at 1-(866) 890-4859 or visit their website at www.xcelenergysettlement.com to
obtain the required file layout. No electronic files will be considered to have
been properly submitted unless the Claims Administrator issues to the Claimant
a written acknowledgment of receipt and acceptance of electronically submitted
data.

 

REMINDER
CHECKLIST

 

o            Please be sure to sign this Proof of Claim on
page 4. If this Proof of Claim is submitted on behalf of joint claimants, then
both claimants must sign.

 

o            Please remember to attach supporting
documents. Do NOT send any stock certificates. Keep copies of everything you
submit.

 

o            Do NOT use highlighter on the Proof of Claim
or any supporting documents.

 

o            If you move after submitting this Proof of
Claim please notify the Claims Administrator of the change in your address.

 

NOTE:
RECEIPT ACKNOWLEDGMENT NEEDED

 

The Claims Administrator will send a written
confirmation of its receipt of your Proof of Claim. Do not assume your claim
is submitted until you receive
written confirmation of its receipt. Your claim is not deemed fully filed until
the Claims Administrator sends
you written confirmation of its receipt of your Proof of Claim. If you do not
receive an acknowledgement Administrator
sends you written confirmation of its receipt of your Proof of Claim. If you do
not receive an acknowledgement postcard
within thirty (30) days of your mailing the Proof of Claim, then please call
the Claims Administrator toll free at 1-(866) 890-4859. 

 

2

 

XCEL
ENERGY COMMON STOCK

 

Beginning Holdings

 

At the close of business on January 30, 2001 I owned
                                 
shares of Xcel common stock.

 

Check here if proof of holdings enclosed:   o

 

Purchases/Acquisitions

 

I made the following purchases or other acquisitions of Xcel common
stock during the period from January 31, 2001 through
July 25, 2002, inclusive:

 

	
  Date(s) of Purchase or

  Acquisition

  (List Chronologically)

  (Month/Day/Year) 

  	
   

  	
  Number of Shares

  of Common Stock

  Purchased or

  Acquired

  	
   

  	
  Purchase Price Per

  Share of

  Common Stock

  	
   

  	
  Aggregate

  Cost (including

  commissions, taxes,

  and fees)

  	
   

  	
  Check
  Here

  If Requred

  Documents

  are Enclosed

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  o

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  o

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  o

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  o

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  o

  

 

Sales

 

I made the following sales of Xcel common stock during the period from January 31, 2001 through October 24, 2002, inclusive:

 

	
  Date(s) of Sale 

  (List Chronologically) 

  (Month/Day/Year) 

  	
   

  	
  Number
  of Shares 

  of Common Stock 

  Sold 

  	
   

  	
  Sale
  Price Per Share 

  of Common Stock 

  	
   

  	
  Amount
  Received (net 

  of commissions, taxes, 

  and fees) 

  	
   

  	
  Check
  Here

  If Requred

  Documents

  are Enclosed

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  o

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  o

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  o

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  o

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  o

  

 

Ending Holdings

 

At the close of business on October 24, 2002, I still owned
                                   
shares of Xcel common stock.

 

Check here if proof of holdings enclosed:   o

 

IF YOU
NEED ADDITIONAL SPACE TO LIST YOUR TRANSACTIONS, PLEASE PHOTOCOPY THIS PAGE

 

3

 

Substitute
Form W-9

 

Request for Taxpayer Identification Number:

 

Enter taxpayer identification number below for the Beneficial Owner(s).
For most individuals, this is your Social Security Number. The Internal Revenue
Service (“I.R.S.”) requires such taxpayer identification number. If you fail to
provide this information, your claim may be rejected.

 

	
   

  	
  or

  	
   

  
	
   
  Social Security Number (for individuals)

  	
   

  	
   
  Taxpayer Identification Number

  
	
   

  	
   

  	
   
  (for estates, trusts, corporations, etc.)

  

 

Certification

 

UNDER THE PENALTIES OF
PERJURY, I (WE) CERTIFY THAT ALL OF THE INFORMATION PROVIDED ON THIS FORM IS
TRUE, CORRECT AND COMPLETE.

 

I (We) certify that I am (we
are) NOT subject to backup withholding under the provisions of Section 3406
(a)(1)(c)  of the Internal
Revenue Code because: (a) I am (We are) exempt from backup withholding, or (b)
I (We) have not been notified by
the I.R.S. that I am (we are) subject to backup withholding as a result of a
failure to report all interest or dividends, or (c) the I.R.S. has notified me (us) that I am (we are) no longer
subject to backup withholding. 

 

NOTE: If you have been
notified by the I.R.S. that you are subject to backup withholding, please
strike out the  language
that you are not subject to backup withholding in the certification above.

 

	
   

  	
  Signature of Claimant (If this claim is being made

  	
   

  
	
   

  	
  on behalf of Joint Claimants, then each must sign)

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  (Signature)

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  (Signature)

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   (Capacity of person(s) signing, e.g. beneficial

  
	
  Date:

  	
   

  	
   

  	
   purchaser(s), executor, administrator, trustee, etc.)

  
	
   

  	
   

  
	
   

  	
  o 
  Check here if proof of authority to file is enclosed.

  
	
   

  	
       (See Item 2 on Page 2 for
  instructions)

  
								

 

THIS
PROOF OF CLAIM MUST BE SUBMITTED NO LATER THAN
                     
2005, AND MUST BE MAILED TO:

 

In Re Xcel
Energy, Inc., Securities, Derivative & “ERISA” Litigation

c/o
Analytics Incorporated

Claims
Administrator

Post Office
Box 2007

Chanhassen,
MN 55317-2007

 

A Proof of
Claim received by the Claims Administrator shall be deemed to have been
submitted when posted, if mailed by
                               ,
2005, and if a postmark is indicated on the envelope and it is mailed first
class, and addressed in accordance with the above instructions. In all other
cases, a Proof of Claim shall be deemed to have been submitted when actually
received by the Claims Administrator.

 

You should be
aware that it will take a significant amount of time to process fully all of
the Proofs of Claim and to administer the Settlement. This work will be
completed as promptly as time permits, given the need to investigate and
tabulate each Proof of Claim. Please notify the Claims Administrator of any
change of address.

 

4

 

EXHIBIT B

 

UNITED
STATES DISTRICT COURT

DISTRICT OF MINNESOTA

 

	
  In Re Xcel Energy, Inc., Securities, Derivative

  	
   

  	
  Master File: Civil 02-2677 (DSD/FLN)

  
	
  & “ERISA” Litigation

  	
   

  	
  MDL No. 1511

  
	
   

  	
   

  	
   

  
	
  This document applies to Case Nos. 02-2677, 02-2774,
  02-2787, 02-2832, 02-2889, 02-2921, 02-2933, 02-3053, 02-3508, 02-3574,
  02-3715, 02-3755, and 02-3798, the Securities Cases.

  	
   

  	
   

  

 

ORDER
FOR FINAL JUDGMENT

SECURITIES LITIGATION

 

WHEREAS, the parties to the
above-described action (the “Action”) entered into a Settlement Agreement dated
as of                   
(the “Settlement”); and

 

WHEREAS, on                     ,
the Court entered an Order Preliminarily Approving Settlement, which, inter
alia: (i) preliminarily approved the Settlement; (ii) determined that, for
purposes of the Settlement only, the Action should proceed as a class action
pursuant to Rules 23(a) and 23(b)(3) of the Federal Rules of Civil Procedure,
on behalf of a class consisting of all Persons, including Xcel employees, who
purchased or otherwise acquired for value any common stock of Xcel or NRG Senior
Notes during the period beginning January 31, 2001 through July 25, 2002, inclusive,
whether pursuant to prospectus, in open-market transactions, or otherwise, except
the defendants, any member of the immediate family of any individual defendant,
and any legal representative, heir, controlling person, successor, predecessor
in interest or assign of any defendant (“Settlement Class” or “Class”);

 

 

(iii) approved the forms of
notice of the Settlement to the Class Members; (iv) directed that appropriate
notice of the Settlement be given to the Settlement Class; and (v) set a
hearing date for final approval of the Settlement; and

 

WHEREAS, notice of the
Settlement was mailed to Class Members on
                 ,
and thereafter. The summary notice of the Settlement was published in the national
edition of The Wall Street Journal, Minneapolis Star Tribune and St.
Paul Pioneer Press on                  ;
and

 

WHEREAS, on                  ,
2005, at           a.m., at the
United States District Court for the District of Minnesota, U.S. Federal Courts
Building, 300 South Fourth Street, Minneapolis, Minnesota 55415, The Honorable
David S. Doty held a hearing on whether the Settlement was fair, reasonable,
adequate, and in the best interests of the Settlement Class (“Settlement
Hearing”); and

 

WHEREAS, based on the
foregoing, having heard the statements of counsel for the parties and of such
persons as chose to appear at the Settlement Hearing, having considered all of
the files, records, and proceedings in the Action, and being otherwise fully advised,

 

THE COURT HEREBY FINDS AND
CONCLUDES that:

 

A.            This Court has jurisdiction over the subject
matter of the Action.

 

B.            The form, content, and method of
dissemination of the notice given to the Settlement Class, including both
published notice and individual notice to

 

2

 

all Class Members who could
be identified through reasonable effort, was adequate and reasonable, and
constituted the best notice practicable under the circumstances.

 

C.            The notice, as given, complied with the
requirements of 15 U.S.C. § 78u-4(a)(7) and of Rule 23 of the Federal Rules of
Civil Procedure, satisfied the requirements of due process, and constituted due
and sufficient notice of the matters set forth therein.

 

D.            The Settlement set forth in the Settlement
Agreement is fair, reasonable, adequate, and in the best interests of the
Settlement Class.

 

E.             The plan of distribution described in the
notice to Class Members is fair and reasonable.

 

F.             The Representative Plaintiffs have fairly and
adequately represented the interests of the Class Members in connection with
the Settlement.

 

G.            The Representative Plaintiffs and the Class
Members, and all and each of them, are hereby bound by the terms of the
Settlement set forth in the Settlement Agreement.

 

H.            The provisions of the Settlement Agreement,
including definitions of the terms used therein, are hereby incorporated by
reference as though fully set forth herein.

 

I.              All parties and counsel appearing herein have
complied with their obligations under Rule 11(b) of the Federal Rules of Civil
Procedure.

 

3

 

J.             This action is properly and finally certified
as a class action for purposes of settlement under Rules 23(a) and (b)(3) of
the Federal Rules of Civil Procedure. The Court finds that (i) the members of
the Class are so numerous that joinder of all members is impracticable; (ii)
there are questions of law and fact common to the Class, including, inter
alia, whether alleged statements by the Defendants were materially false or
misleading and whether defendants had a duty to disclose information about the
financial connections between Xcel and NRG, in particular certain provisions of
Xcel’s credit agreements relating to cross defaults, that allegedly were
concealed; (iii) the claims of the Representative Plaintiffs as asserted in the
Complaint are typical of the claims of the Class; (iv) the Representative Plaintiffs
have retained experienced and competent counsel and have fairly and adequately
protected the interests of the Class; (v) the questions of law and fact common
to the Class predominate over any questions affecting only individual members
of the Class; and (vi) a class action is superior to other available methods for
the fair and efficient adjudication of the controversy.

 

NOW, THEREFORE, IT IS HEREBY
ORDERED AND ADJUDGED that:

 

1.             The Settlement set forth in the Settlement
Agreement is fair, reasonable, adequate, and in the best interests of the
Settlement Class, and it shall be consummated in accordance with the terms and
provisions of the Settlement Agreement.

 

4

 

2.             Judgment shall be, and hereby is, entered
dismissing the Action with prejudice, on the merits, and without taxation of
costs in favor of or against any party.

 

3.             The Representative Plaintiffs and all Class
Members are hereby conclusively deemed to have released Xcel Energy, Inc., and
the Individual Defendants, all and each of them, and all and each of their
respective past and present parent, subsidiary, and affiliated corporations and
entities, the predecessors and successors in interest of any of them, and all
of their respective past and present officers, directors, employees, agents,
partners, representatives, spouses, heirs, executors, administrators, insurers,
attorneys, and assigns (collectively the “Settling Defendants”), with respect
to any and all claims, actions, causes of action, rights or liabilities,
whether arising out of state or federal law, including Unknown Claims, which
exist or may exist against any of the Settling Defendants by reason of any matter,
event, cause or thing whatsoever arising out of, relating to, or in any way connected
with: (a) the purchase, acquisition, sale or disposition of any Xcel common stock
or NRG Senior Notes; (b) any claims that they may have had for recovery to or for
them as shareholders of Xcel or as holders of NRG Senior Notes; (c) any of the facts,
circumstances, transactions, events, occurrences, acts, omissions or failures
to act that have been alleged or referred to in any pleading or other paper
filed with the Court in this Action; or (d) any facts, circumstances,
transactions, events, occurrences, acts, omissions or failures to act that
could have been alleged in the Action and that relate to the Class Member’s
investment or potential investment in

 

5

 

Xcel and/or NRG securities
of any kind or nature (all of the above are “Settled Claims”).

 

4.             The Representative Plaintiffs and all Class
Members are hereby barred and permanently enjoined from instituting, asserting
or prosecuting, either directly, representatively, derivatively or in any other
capacity, any and all claims which they or any of them had, have or may have
against the Settling Defendants, their respective past and present parent,
subsidiary, and affiliated corporations and entities, the predecessors and
successors in interest of any of them, and all of their respective past and
present officers, directors, employees, agents, partners, representatives, spouses,
heirs, executors, administrators, insurers, attorneys, and assigns, arising out
of, based upon, or otherwise related in any way to the Settled Claims.

 

5.             The Court appoints the law firm of Chestnut
& Cambronne, P.A. as Plaintiffs’ Settlement Counsel for purposes of
administration of the Settlement.

 

6.             The plan of distribution of the Settlement
Fund as described in the notice to Class Members is hereby approved, subject to
modification by further order of this Court. Any order or proceedings relating
to the plan of distribution or amendments thereto shall not operate to
terminate or cancel the Settlement Agreement or affect the finality of this
Order approving the Settlement Agreement.

 

7.             The Court hereby decrees that neither the
Settlement Agreement nor this Final Judgment nor the fact of the Settlement is
an admission or concession by any Settling Defendant of any liability or
wrongdoing. This Final Judgment is not a

 

6

 

finding of the validity or
invalidity of any of the claims asserted or defenses raised in the Action.
Neither the Settlement Agreement nor this Final Judgment nor the fact of Settlement
nor the settlement proceedings nor the settlement negotiations nor any related
documents shall be offered or received in evidence as an admission, concession,
presumption or inference against any Settling Defendants in any proceeding,
other than such proceedings as may be necessary to consummate or enforce the
Settlement Agreement.

 

8.             The parties to the Settlement Agreement,
their agents, employees, and attorneys, and the Escrow Agent, shall not be
liable for anything done or omitted in connection with these proceedings, the
entry of this Final Judgment, or the administration of the payments to
Authorized Claimants as provided in the Settlement Agreement, the Escrow
Agreement, and this Order, except for their own willful misconduct.

 

9.             Class Counsel are awarded attorneys’ fees in
the amount of $                  
(       % of the gross settlement amount)
and reimbursement of expenses, including experts’ fees and expenses, in the
amount of $                    ,
such amounts to be paid from out of the Settlement Fund. Representative
Plaintiffs are awarded collectively the sum of $            
as reasonable costs and expenses directly relating to the representation of the
Class as provided in 15 U.S.C. § 78u-4(a)(4), such amount to be paid from out
of the Settlement Fund and distributed to them in amounts determined by
Plaintiffs’ Settlement Counsel. Payment is to be made to

 

7

 

Plaintiffs’ Settlement
Counsel on behalf of Representative Plaintiffs and all Class Counsel.
Plaintiffs’ co-lead counsel, Chestnut & Cambronne, P.A. and Berger and Montague,
P.C., are authorized to allocate and distribute the awarded attorneys’ fees in
accordance with their judgment of the relative contributions of participating
counsel.

 

10.           The Court hereby retains and reserves
jurisdiction over: (a) implementation of this Settlement and any distribution
to Authorized Claimants under the terms and conditions of the Settlement
Agreement and pursuant to further orders of this Court; (b) disposition of the
Settlement Fund under the terms and conditions of the Settlement Agreement; (c)
the Action, until (i) the Effective Date contemplated by Paragraph V(A)(10) of
the Settlement Agreement, and (ii) each and every act agreed to be performed by
the parties shall have been performed pursuant to the terms and conditions of
the Settlement Agreement, including the exhibits appended thereto; and (d) all
parties, for the purpose of enforcing and administering the Settlement
Agreement and this Settlement.

 

11.           There being no just reason for delay, the Clerk
of Court is hereby directed to enter final judgment forthwith pursuant to Rule
54(b) of the Federal Rules of Civil Procedure.

 

12.           In the event that this judgment does not
become Final in accordance with Paragraph V(A)(10) of the Settlement Agreement,
then the final judgment shall be rendered null and void to the extent provided
by and in accordance with the Settlement Agreement, and this Order for Final
Judgment shall be vacated. In such

 

8

 

event, all orders entered
and releases delivered in connection with the Settlement shall be null and
void, except to the extent provided by and in accordance with the Settlement
Agreement. In such event, the Action shall return to its status prior to execution
of the Settlement Agreement.

 

LET JUDGMENT BE ENTERED
ACCORDINGLY.

 

	
  Date:

  	
   

  	
   .

  	
   

  
	
   

  	
  Minneapolis, Minnesota

  	
   

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  David S. Doty

  
	
   

  	
  United States District Judge

  

 

9

 

EXHIBIT C

 

UNITED
STATES DISTRICT COURT

DISTRICT OF MINNESOTA

 

	
  In Re Xcel Energy, Inc., Securities, Derivative

  	
   

  	
  Master File: Civil 02-2677 (DSD/FLN)

  
	
  & “ERISA” Litigation

  	
   

  	
  MDL No. 1511

  
	
   

  	
   

  	
   

  
	
  This document relates to Case Nos. 02- 2677, 02-2774,
  02-2787, 02-2832, 02-2889, 02-2921, 02-2933, 02-3053, 02-3508, 02- 3574,
  02-3715, 02-3755, and 02-3798, the Securities Actions.

  	
   

  	
   

  

 

ESCROW
AGREEMENT

SECURITIES LITIGATION

 

This ESCROW AGREEMENT (the “Escrow
Agreement”) is entered into in connection with a Settlement Agreement dated as
of                              .

 

I.              RECITALS

 

A.            The parties to this Escrow Agreement are as
follows:

 

1.             The Representative Plaintiffs named in the
above-described action (“Action”), through Plaintiffs’ Co-Lead Counsel.

 

2.             Xcel Energy, Inc. (“Xcel”) and the Individual
Defendants, through their respective counsel (collectively, the “Settling
Defendants”).

 

3.             TCF National Bank Minnesota, as escrow agent
for the Settlement Fund (the “Escrow Agent”).

 

B.            The Representative Plaintiffs and the
Settling Defendants have entered into a Settlement Agreement in the Action,
which Settlement Agreement will provide for a dismissal with prejudice of the
Settled Claims therein in favor of the Settling

 

 

Defendants in consideration
of, among other things, the payment of the amount specified in the Settlement
Agreement.

 

C.            The parties hereto have entered into this
Escrow Agreement in order to carry out and effectuate the Settlement Agreement.
The applicable provisions of the Settlement Agreement, including the
definitions of the terms used therein, are hereby incorporated by reference as
though fully set forth in this Escrow Agreement; provided, however, that the
Escrow Agent shall not have any duties or obligations except those set forth
herein. The provisions of this Escrow Agreement are to be construed in accordance
with the provisions of the Settlement Agreement.

 

D.            Now, therefore, in consideration of the
foregoing and the mutual covenants and considerations contained herein, the
undersigned parties agree as follows:

 

II.            DEPOSITS INTO ESCROW

 

A.            Pursuant to and in accordance with the
Settlement Agreement, the sum of Eighty Million Dollars ($80,000,000), will be
deposited with the Escrow Agent, by wire transfer. From this sum, $250,000 will
be separated and held by the Escrow Agent in a segregated fund designated the
Notice Fund. The remaining $79,750,000 will be held by the Escrow Agent in an
interest bearing account for benefit of plaintiffs and their attorneys.

 

B.            The Notice Fund shall be used to pay the
initial costs of administering the settlement, including without limitation the
costs of notifying members of the Settlement Class and the taxes incurred, if
any, as a result of interest accrued on the Notice Fund. Upon the Effective
Date, any balance then remaining in the Notice Fund, less expenses

 

2

 

incurred by it but not yet
paid, shall be returned to and become part of the Settlement Fund. Monies may
be disbursed from the Notice Fund for the purposes stated above at the written
direction of Plaintiffs’ Settlement Counsel, without need for any order by the Court.
The Escrow Agent shall have no liability for acting on such written
instructions from Plaintiffs’ Settlement Counsel which the Escrow Agent in good
faith believes to be authentic.

 

C.            The Settlement Fund shall be distributed only
by order of the Court pursuant to the Settlement Agreement filed with the
Court. The Escrow Agent shall be entitled to rely, as to distributions and
withdrawals from the Settlement Fund, on any order of the Court,
notwithstanding that any such order is subsequently reversed, vacated,
remanded, modified or stayed on appeal, except that the Escrow Agent is not required
to comply with any order subsequent to the time it receives actual notice that such
order is stayed for any reason.

 

III.           INTEREST AND INVESTMENTS

 

A.            Promptly upon receipt of the funds referred
to in Paragraph II(A) the Escrow Agent shall cause such funds to be invested in
a certificate(s) of deposit or other interest-bearing accounts as approved by Plaintiffs’
Settlement Counsel. The Escrow Agent may also, at the direction of Plaintiffs’
Settlement Counsel, establish a savings account to be funded with such sums as
may be directed by Plaintiffs’ Settlement Counsel for purposes of effectuating
the provisions of the Settlement Agreement.

 

B.            All interest earned on the Settlement Fund
shall be added to the Settlement Fund and distributed pursuant to orders of the
Court.

 

3

 

IV.           ESCROW AGENT’S FEES AND
EXPENSES

 

A.            For its services in receiving, investing and
reinvesting the Notice Fund and/or the Settlement Fund, the Escrow Agent shall
be entitled to withdraw from the Notice Fund or the Settlement Fund a fee as
follows:

 

1.             Its usual penalty, if any, for any early
withdrawal from a certificate of deposit;

 

2.             Its usual charge for outgoing wire transfers;
and

 

3.             Reimbursement for out-of-pocket expenses that
the Escrow Agent incurs in distributing the Settlement Fund to Class Members,
such as check printing fees. It is understood that the Escrow Agent may assist
the Claims Administrator in distributing the Settlement Fund directly to Class
Members.

 

B.            The Escrow Agent shall be compensated solely
as described in Paragraph IV(A) above, and the Escrow Agent shall not have any
additional claim for compensation against the parties hereto.

 

V.            TERMINATION OF THE SETTLEMENT AGREEMENT

 

In the event that the
Settlement Agreement is voided, terminated or cancelled, or fails to become
effective for any reason whatsoever, then within 10 days after written notice
is sent by Plaintiffs’ Settlement Counsel or by counsel for Defendant Xcel
Energy, Inc. to the Escrow Agent and all other parties, the Settlement Fund
shall be refunded to the persons who made payments into such funds, plus all
interest earned thereon, less: (1) reasonable Escrow Agent fees and expenses as
described in Paragraph IV(A) above; (2) any amounts actually disbursed, billed
or incurred for tax liabilities on the Settlement Fund or expenses incurred in
preparation of necessary forms and reports

 

4

 

with respect thereto, if
any; and (3) expenditures actually disbursed, billed or incurred for
administration as set forth in the Settlement Agreement.

 

VI.           MISCELLANEOUS PROVISIONS

 

A.            At least quarterly, until the Effective Date
as defined in the Settlement Agreement, the Escrow Agent shall submit to each
of the undersigned counsel a statement of receipts, disbursements and property
on hand pertaining to the Settlement Fund.

 

B.            Should the Escrow Agent receive or become
aware of any demands or claims with respect to the Settlement Fund, other than
those as contemplated by the Settlement Agreement, it shall have the right to
apply to the Court, on notice to the parties hereto, for appropriate
instructions.

 

C.            The Escrow Agent’s acceptance and
administration of the Notice Fund and/or the Settlement Fund shall constitute
the submission of the Escrow Agent to the jurisdiction of the Court for the
purpose of carrying out this Escrow Agreement.

 

D.            This Escrow Agreement may not be assigned by
the Escrow Agent without prior written approval of all the other parties
hereto. The parties agree that any consented-to appointment of a new escrow
agent and substitution of a new escrow agreement shall be binding upon and
inure to the benefit of the parties hereto and their successors and assigns.

 

E.             All funds held by the Escrow Agent shall be
deemed and considered to be held in the jurisdiction of the Court until such
time as such funds shall be distributed or returned consistent with the terms
of the Settlement Agreement and this Escrow Agreement. The Settling Defendants
and their insurers shall have no responsibility or

 

5

 

liability for the
investment, administration or distribution of such funds or for the actions of
the Escrow Agent.

 

F.             The parties hereby agree to treat the
Settlement Fund as a designated settlement fund within the meaning of Section
468B of the Internal Revenue Code of 1986 and Section 1.468B-5(c) of the
Regulations promulgated thereunder. The parties agree to elect to treat the
Settlement Fund as a “qualified settlement fund” under Section 1.468B-2 of the
Regulations, and the Settling Defendants agree to cooperate as may be
reasonably requested by Plaintiffs’ Settlement Counsel to make such filings as may
be required to effect such election.

 

G.            This Escrow Agreement shall be governed and
interpreted according to the laws of the State of Minnesota.

 

H.            The Escrow Agent may terminate the Escrow
Agreement at any time upon 30 days’ prior written notice to all of the other
parties, or upon such shorter notice period as may be required by any
regulatory agency or official having authority over the Escrow Agent. Upon the
expiration of said notice period, the Escrow Agent shall pay the balance of the
Notice Fund and/or the Settlement Fund to a successor escrow agent designated
by mutual agreement of the other parties hereto, or to the Court if no successor
escrow agent is designated by the parties.

 

I.              This document may be signed in counterparts
and by different parties on different counterparts with the same effect as if
the signatures thereto were on the same instrument. This Escrow Agreement shall
be effective and binding upon all parties hereto at such time as all parties
have executed a counterpart of this Escrow Agreement.

 

6

 

IN WITNESS WHEREOF, the
parties hereto have executed this Escrow Agreement through their respective attorneys
as aforesaid and the Escrow Agent also has executed this Escrow Agreement, as
of the date of execution of the Settlement Agreement, by its signature below.

 

7

 

	
  Dated: January       , 2005

  	
  Dated: January       , 2005

  
	
   

  	
   

  
	
  FOR THE REPRESENTATIVE

  	
  FOR DEFENDANTS XCEL ENERGY,

  
	
  PLAINTIFFS, CLASS COUNSEL,

  	
  INC., WAYNE BRUNETTI, EDWARD J.

  
	
  AND THE SETTLEMENT CLASS

  	
  MCINTYRE, WILLIAM T. PIEPER, GARY

  
	
   

  	
  R. JOHNSON AND RICHARD C. KELLY

  
	
  CHESTNUT & CAMBRONNE, P.A.

  	
   

  
	
   

  	
  JONES DAY

  
	
   

  	
   

  
	
  By:

  	
   

  	
   

  	
  By

  	
   

  	
   

  
	
  Jack L. Chestnut, No. 16378

  	
  John M. Newman, Jr., No. 5763

  
	
  Karl L. Cambronne, No. 14321

  	
  Geoffrey J. Ritts, No. 62603

  
	
  Jeffrey D. Bores, No. 227699

  	
  North Point

  
	
  3700 Campbell Mithun Tower

  	
  901 Lakeside Avenue

  
	
  222 South Ninth Street

  	
  Cleveland, Ohio 44114

  
	
  Minneapolis, MN 55402

  	
  Telephone: (216) 586-3939

  
	
  (612) 339-7300

  	
   

  
	
  Fax (612)336-2940

  	
   

  
	
   

  	
  BRIGGS AND MORGAN, P.A.

  
	
  BERGER & MONTAGUE, P.C.

  	
   

  
	
   

  	
   

  
	
   

  	
  By

  	
   

  	
   

  
	
  By

  	
   

  	
   

  	
  Timothy R. Thornton, No. 109630

  
	
  Sherrie R. Savett, No. 17646

  	
  2400 IDS Center

  
	
  Phyllis M. Parker, No. 77336

  	
  80 South 8th Street

  
	
  1622 Locust Street

  	
  Minneapolis, MN 55402

  
	
  Philadelphia, PA 19103

  	
  Telephone: (612) 334-8400

  
	
  (215) 875-3000

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  	
  ESCROW AGENT

  
	
   

  	
   

  	
  TCF National Bank Minnesota

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  	
  Its

  	
   

  	
   

  
									

 

8

 

EXHIBIT D

 

XCEL
ENERGY, INC. SECURITIES LITIGATION SETTLEMENT FUND

ELECTION STATEMENT

UNDER TREAS. REG. SECTION 1-468B-1(j)(2)

 

The undersigned being the
transferor and administrator of the Xcel Energy, Inc. Securities Litigation
Settlement Fund hereby jointly elect to treat the fund as coming into existence
as a qualified settlement fund on the later of:

 

1.             the date the fund meets the requirements of
paragraph (x)(2) and (s)(3) of the Treas. Reg. Section 1.468B-1; or

 

2.             January 1 of the calendar year in which all
the requirements of paragraph © of Treas. Reg. Secftion 1.468B-1 are met.

 

	
   

  	
  TRANSFEROR

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By

  	
   

  	
   

  
	
   

  	
  Its

  	
   

  	
   

  
	
   

  	
  Transferor

  
	
   

  	
   

  
	
   

  	
  TCF National Bank Minnesota

  
	
   

  	
  ADMINISTRATOR

  
	
   

  	
   

  
	
   

  	
  By

  	
   

  	
   

  
	
   

  	
  Its

  	
   

  	
   

  
	
   

  	
  Administrator

  

 

 

[END
OF PARAGRAPH G 4(a)]

 

The election statement for
the “relation-back election” is attached hereto and incorporated herein and
shall be signed by or on behalf of each transferor and TCF National Bank
Minnesota either before or simultaneous with the deposits of Settlement Funds
into Escrow.Exhibit 10.02

 

UNITED STATES DISTRICT COURT

DISTRICT OF MINNESOTA

 

	
  In re Xcel Energy, Inc. Securities,
  Derivative

  & ERISA Litigation

  	
  Master File: Civil 02-2677 (DSD/FLN)

  
	
   

  	
  MDL No. 1511

  
	
  This Document Relates to Case Nos. 03-2218

  and 03-2219, the “ERISA Actions.”

  	
   

  

 

STIPULATION AND
AGREEMENT OF SETTLEMENT OF ERISA ACTIONS

 

This
Settlement Agreement (“Agreement”) is made as of December 31, 2004, by and
among the following parties (as defined in this Agreement):  (1) the Class Representatives and the Plans,
by and through Class Counsel; and (2) Xcel Energy Inc. and the Individual
Defendants, by and through their attorneys, pursuant to Rule 23 of the Federal
Rules of Civil Procedure and subject to the Court’s approval.

 

1.             RECITALS

 

1.1           This
Agreement resolves two related actions originally filed in 2002 in the United
States District Court for the District of Colorado against the Defendants
asserting claims arising under the Employee Retirement Income Security Act of
1974, as amended (“ERISA”):  Donald
Newcome and Leonard Banks v. Xcel Energy, Inc., et al. and Gene Barday
v. Xcel Energy, Inc., et al.  The
complaints allege that the Defendants breached their fiduciary duties and
otherwise violated ERISA by using employer and employee contributions to the
Xcel Energy Inc. 401(k) Savings Plan and its predecessor plans (the “Xcel
401(k) Plan”) and the New Century Energies

 

 

Employees’ Savings and
Stock Ownership Plan for Bargaining Unit Employees and Former Non-Bargaining
Unit Employees (the “NCE Union Plan”) (collectively, the “Plans”) to purchase
the common stock of Xcel at a time when, according to Plaintiffs, it was an
unsuitable and imprudent investment for the Plans.  Plaintiffs also allege that Defendants
violated ERISA by failing to take appropriate actions to protect participants
and beneficiaries from losses that resulted from the imprudent acquisition and
retention of Xcel common stock by the Plans during the same period.  Plaintiffs further allege that Defendants violated
ERISA by misrepresenting to Plaintiffs and participants in the Plans the
financial status of Xcel and, consequently, the true value of Xcel common
stock.  These misrepresentations were
alleged to include misleading, inaccurate, and incomplete communications with
participants regarding the value of Xcel common stock, and its prudence as an
investment for the Plans’ assets, both directly to participants by Defendants,
and in plan-related documents, including the summary plan descriptions.  The Complaints seek equitable and
compensatory relief on behalf of Plaintiffs, the Class Members and the Plans,
pursuant to ERISA §§ 409, 502(a)(2), and 502(a)(3), plus attorneys’ fees,
expenses, and costs pursuant to the common fund doctrine, ERISA
§ 502(g)(1), and other law.

 

1.2           Plaintiffs
seek certification pursuant to Fed. R. Civ. P. 23 of a class consisting of all
persons who were participants or beneficiaries of either of the Plans between
September 23, 1999 and March 31, 2003, and who had Xcel common stock allocated
to their accounts in the Plans at any time during such period (“Settlement
Class”), other than Defendants individually named in the Complaint and their
immediate family members.

 

1.3           Defendants
have denied and continue to deny each of the claims and allegations of
wrongdoing in the Complaints.  On
December 20, 2002, Defendants filed a Motion to Dismiss

 

2

 

the Complaints, which was
denied in part and granted in part by the court on March 10, 2004.  On July 21, 2004, Defendants filed a motion
for partial summary judgment, which has not yet been ruled upon by the
court.  Defendants have specifically
denied and continue to deny, inter alia, the
allegations that they breached any fiduciary duties or any other provisions of
ERISA in connection with the acquisition or retention of Xcel common stock by
the Plans during the Class Period or at any time, and deny that they in any way
misrepresented the financial performance of Xcel or the value of Xcel common
stock either directly or indirectly to participants in the Plans.  Defendants deny that Plaintiffs, the proposed
class, or the Plans are entitled to any relief of any kind.

 

2.             BASIS FOR
SETTLEMENT

 

2.1           Plaintiffs’
Counsel as defined below have conducted a thorough investigation into
Plaintiffs’ claims, the underlying events and transactions alleged in the
Complaints, and the operation and administration of the Plans, including
interviews with members of the purported class and former agents and employees
of Xcel.  Plaintiffs’ Counsel has also
reviewed thousands of documents produced by Defendants and third parties
through the discovery process, as well as documents obtained from public
sources and the files of Plaintiffs and putative class members.  Additionally, Plaintiffs’ Counsel have
consulted with experts and made a thorough study of the legal principles
applicable to the actual and potential claims of Plaintiffs, the Plans, and the
Settlement Class.

 

2.2           Defendants’
Counsel as defined below also have conducted a thorough investigation into
Plaintiffs’ claims, the underlying events and transactions alleged in the
Complaints, and the operation and administration of the Plans, including
interviews with employees of Xcel. 
Defendants’ Counsel have reviewed numerous documents and made a

 

3

 

thorough study of the
legal principles applicable to the actual and potential claims of Plaintiffs,
the Plans, and the Settlement Class in the Action.

 

2.3           The
parties, after engaging in substantial discovery, were ordered by the court
(see Order dated October 9, 2004) to engage in mediation.  As a result of the mediation, conducted by a
nationally-recognized mediator over the course of two days, followed by
extensive written and telephonic communications between Plaintiffs’ Counsel,
Defendants’ Counsel, and the mediator, the parties to the Action agreed to a
settlement, the terms of which are embodied in this Settlement Agreement.

 

2.4           Although
the Defendants continue to deny all liability with respect to any and all of
the claims alleged in the Complaints, the Defendants nevertheless consider it
desirable that any and all possible controversies and disputes that arise out
of or relate to the matters, transactions, and occurrences referenced in the
Complaints and/or related to the Plans and the investment options in the Plans,
be conclusively settled and terminated on the terms and conditions set forth
below.  The Settlement of the Action and
the attendant final dismissal of the Complaints will avoid the substantial
expense, inconvenience, and risk of continued litigation and will bring the
claims and potential claims of Plaintiffs, the Plans, the Plans’ fiduciaries
and the Settlement Class to an end.

 

2.5           Based
on Plaintiffs’ investigation and after considering:  (a) the substantial benefits that Plaintiffs,
the Plans and the members of the Settlement Class will receive from the
Settlement; (b) the risk of litigation; (c) the likely length of time before
final resolution of the claims, including time spent in possible appeals if the
Action were not settled; and (d) the desirability of permitting the Settlement
to be consummated as provided by the terms of this Agreement, Plaintiffs’
Counsel has concluded that the terms and conditions of the proposed

 

4

 

Settlement as set forth
in this Agreement are fair, reasonable, and adequate to the Plaintiffs, the
Plans and the members of the Settlement Class, and Plaintiffs and Plaintiffs’
Counsel have agreed to settle and compromise the Action pursuant to the terms
and provisions of this Agreement, subject to the approval of the Court.

 

3.             SETTLEMENT TERMS

 

ACCORDINGLY,
THE UNDERSIGNED ATTORNEYS FOR THE PARTIES HEREBY STIPULATE AND AGREE on behalf
of their respective clients and the Plans and the Settlement Class to settle,
to compromise, and to dismiss this Action with prejudice, subject to the
approval of the Court, in the manner and on the terms and conditions set forth
below.

 

In addition to
the terms heretofore defined, as used in this Agreement:

 

3.1           “Action” means, collectively, the lawsuits captioned Newcome
and Banks v. Xcel Energy, Inc., et al., Civil No. 03-2218 (D. Minn.) and Barday
v. Xcel Energy, Inc., et al., Civil No. 03-2219 (D. Minn.).

 

3.2           “Administrative Contractors” means the persons engaged by
the Administrators and to whom the Administrators may delegate duties assigned
to the Administrators under this Agreement, including, without limitation,
duties associated with provision of Notice, calculation of Claims, collection
of Releases, and preparation and filing of tax-related documents.  It is agreed by the parties hereto that
neither the Administrators nor the Administrative Contractors are to be deemed
agents or representatives of the Defendants or Defendants’ Counsel for any
purpose, and that neither Defendants, their Related Parties, nor Defendants’
Counsel shall bear any responsibility or liability for any act or omission of
any Administrator or Administrative Contractor.

 

3.3           “Administrative Expenses” means the expenses incurred in the
administration of this Agreement, including, without limitation, all expenses
or costs associated with providing the

 

5

 

Notices described herein
and all expenses or costs associated with distribution of the Net Settlement
Fund as described in Section 6, below. 
In addition, all reasonable expenses of the Administrators, the
reasonable fees of the Escrow Agent, taxes and tax-preparation expenses incurred
by or on behalf of the Settlement Fund, and the reasonable fees and expenses of
the Administrative Contractors that the Administrators engage, shall be
included as Administrative Expenses and paid from the Settlement Fund.

 

3.4           “Administrators” shall be appointed and supervised by
Plaintiffs and Plaintiffs’ Counsel.  They
shall serve as the Administrators and trustees of the Settlement Fund and will
be deemed to be acting in that capacity when providing Notice pursuant to
Section 10, below.  “Administrators”
shall, as the context requires, also mean “Administrative
Contractors.”

 

3.5           “Agreement” means the Stipulation and Agreement of
Settlement entered herein by the parties.

 

3.6           “Attorneys’ Expenses” means the amount awarded by the Court
as reimbursement for Plaintiffs’ Counsel’s costs and expenses of litigation,
other than costs and expenses authorized as Administrative Expenses.

 

3.7           “Attorneys’ Fees” means the amount awarded by the Court as
compensation for the services provided by Plaintiffs’ Counsel.

 

3.8           “Authorized Claimant” means a Claimant whose Settlement
Claims the Administrators determine to be worth at least twenty-five dollars
($25) pursuant to the process set forth in Section 6.2 below.  “Authorized Claimants” refers
collectively to Authorized Former Participant Claimants and Authorized
Participant Claimants, as defined herein.

 

6

 

3.9           “Authorized Former Participant Claimant” means an Authorized
Claimant who is a former participant in either or both of the Plans as of the
date the Net Settlement Fund is distributed to the Plans.

 

3.10         “Authorized Participant Claimant” means an Authorized
Claimant who is a participant in one of the Plans as of the date the Net
Settlement Fund is distributed to the Plans.

 

3.11         “Claimant” means any member of the Settlement Class.

 

3.12         “Class” or “Settlement Class” means
the class to be conditionally certified by the Court pursuant to the
Preliminary Approval Order, consisting of all Persons who were participants or
beneficiaries under the Plans during any portion of the Class Period who had
Xcel stock allocated to their Plan account at any time during such period,
other than persons who are named as Defendants in the Complaints and their
immediate family members.

 

3.13         “Class Counsel” or “Plaintiffs’ Counsel” means
the firms of Branstetter, Kilgore, Stranch, & Jennings; Whatley Drake,
L.L.C.; Barrett, Johnston & Parsley; Robbins Umeda & Fink, LLP; Brauer,
Buescher, Goldhammer, Kelman & Dodge; Gilbert &
Sackman, a Law Corporation; Cochrane & Bresnahan, PA.

 

3.14         “Class Period” means the period between September 23, 1999,
and March 31, 2003, inclusive.

 

3.15         “Class Representative(s)” and “Plaintiffs”
mean the following persons: 
Gene Barday, Jr., Leonard Banks and Donald Newcome.

 

3.16         “Code” means the Internal Revenue Code of 1986.

 

3.17         “Complaints” means the complaints filed in the lawsuits
captioned Newcome and Banks v. Xcel Energy, Inc., et al., Civil No.
03-2218 (D. Minn.) and Barday v. Xcel Energy, Inc., et al., Civil No.
03-2219 (D. Minn.).

 

7

 

3.18         “Defendants” means Xcel, Wayne H. Brunetti, Douglas W.
Leatherdale, C. Coney Burgess, A. Barry Hirschfeld, Margaret R. Preska, Allan
L. Schuman, W. Thomas Stephens, Giannantonio Ferrari, Albert F. Moreno, A. Patricia
Sampson, Rodney E. Slifer, James J. Howard, David A. Christensen, Roger R.
Hemminghaus, Edward J. McIntyre, and David E. Ripka.  “Individual Defendants”
means the Defendants, except Xcel.

 

3.19         “Defendants’ Counsel” means the firms of Jones Day and Briggs
& Morgan, P.A. for Xcel and all Individual Defendants except James J.
Howard, and Rider Bennett LLP for James J. Howard.

 

3.20         “Escrow Agent” means TCF National Bank Minnesota, which bank
or institution shall perform its duties as set forth in this Agreement and in
the Escrow Agreement attached hereto as Exhibit E.

 

3.21         “Derivative Action” means the action captioned Gottlieb
v. Xcel Energy, Inc., et al., No. 02-2931, pending in the United States
District Court for the District of Minnesota and coordinated under the
proceedings captioned In re Xcel Energy, Inc. Securities, Derivative and
ERISA Litigation, Master File No. 02-2677 (DSD/FLN).

 

3.22         “Final Approval of the Settlement” means the entry of an
Order and Final Judgment approving this Agreement and the Settlement pursuant
to Rule 23(e) of the Federal Rules of Civil Procedure and the full, final, and
favorable determination of any appeals, petitions, motions for reconsideration,
or any other proceedings for review or, if no such review proceedings are
taken, the expiration of the applicable time to appeal or seek review from such
order.

 

8

 

3.23         “Initial Administrative Expense Payment” means the costs of
the Class Notice and other costs relating to the administration of the
Settlement, as mutually agreed by Class Counsel and counsel for Defendants.

 

3.24         “Net Settlement Fund” means the Settlement Fund plus
interest that has accrued thereon, less the Attorneys’ Fees, Attorneys’
Expenses, Administrative Expenses, and the Total Plaintiffs’ Case Contribution
Compensation, as defined herein.

 

3.25         “Notice” and “Individual Notice” means
the Notice of Pendency of Class Action, Proposed Settlement, and Hearing
attached to this Agreement as Exhibit A.

 

3.26         “Order and Final Judgment” means an order and judgment of
the Court approving the Settlement and entry of a final judgment in the form
annexed hereto as Exhibit D, or upon terms not materially different from
those set forth in Exhibit D.

 

3.27         “Person(s)” means a natural person, a corporation,
partnership, association, or any other entity.

 

3.28         “Plaintiffs’ Case Contribution Compensation” means the
amount of two thousand dollars ($2,000) per Plaintiff, which shall be paid from
the Settlement Fund to each Class Representative in recognition of their
contributions to the Action.

 

3.29         “Plan Account” means the account or accounts established or
existing under the Plans designated by the Plan Administrator into which the
Escrow Agent shall transfer the Net Settlement Fund for distribution and
allocation to the Class.  Xcel shall take
all necessary steps to establish the Plan Account.

 

3.30         “Preliminary Approval of Proposed Settlement and Notice” means
the date that the Preliminary Approval Order is entered by the Court.

 

9

 

3.31         “Preliminary Approval Order” means an order, substantially
in the form annexed hereto as Exhibit C, approving the forms and
procedure for providing notice to the Settlement Class, conditionally certifying
the named Plaintiffs as the representatives of the Settlement Class and
Plaintiffs’ Counsel as counsel to the Settlement Class, establishing a
procedure for members of the Settlement Class to follow in order to object to
the Settlement, and setting a date for a hearing on the approval of the
Settlement.

 

3.32         “Publication Notice” means the abbreviated form of Notice,
attached to this Agreement as Exhibit B, to be published in the
Minneapolis Star-Tribune, the St. Paul Pioneer Press, and USA Today or another
national publication mutually agreed upon by Class Counsel and Defendants’
Counsel.

 

3.33         “Related Parties” means each of a Defendant’s past, present,
and future directors, officers, fiduciaries, employees, partners, principals,
agents, members, independent contractors, registered representatives,
underwriters, issuers, insurers, coinsurers, reinsurers, controlling
shareholders, attorneys, accountants, auditors, investment bankers, advisors,
consultants, trustees, fiduciaries, personal representatives, predecessors,
successors, successors-in-interest, parents, subsidiaries, divisions, assigns,
spouses, heirs, executors, administrators, associates, related or affiliated
entities, and members of their families.

 

3.34         “Released Claims” means only those claims set forth below
and shall not include any claim that has been asserted under the state or
federal securities laws by the Plans, the Plans’ Trustee or fiduciaries, or any
individual member of the Settlement Class directly or derivatively in the Securities
Action or the Derivative Action, nor shall it preclude the Plans, the Plans’
Trustee or fiduciaries, or any individual member of the Settlement Class from
participating as class members in the Securities Action.  “Released Claims”
means any and all claims, demands,

 

10

 

damages, defenses,
rights, liabilities, and causes of action in law or equity whatsoever, known or
unknown, matured or unmatured, accrued or unaccrued, fixed or contingent,
liquidated or unliquidated, arising under state or federal law or any other
source of law, by or on behalf of the Plaintiffs, the Plans, the Plans’
fiduciaries, or any member of the Settlement Class on their own behalf and on
behalf of any Persons they represent (including the Plans and their respective
spouses, heirs, executors, administrators, past and present partners, officers,
directors, agents, attorneys, predecessors, successors and assigns), against
any of the Released Persons based upon or arising out of or relating in any way
(in whole or in part) to the acquisition, disposition or retention by the
Plaintiffs, the Plans or any members of the Settlement Class of Xcel stock
during the Class Period, including, but not limited to, claims which relate
directly or indirectly to the facts, transactions, events, occurrences, acts,
disclosures, statements, omissions, or failures to act which were alleged or
could have been alleged in any of the Complaints filed in the Action, or which
are based on or arise out of or in any way relate to communications with
participants or beneficiaries directly or indirectly pertaining to Xcel
stock.  Notwithstanding any provision in
this Settlement Agreement, excluded from the Released Claims are any claims
brought in the Securities Action or Derivative Action.  The “Released Claims”
also shall include any and all claims by or on behalf of each and every
Defendant against Plaintiffs, the Settlement Class and Class Counsel relating
to the institution, prosecution or settlement of any or all claims asserted in
this action, including, but not limited to, any action for costs or attorney’s
fees as well as for contribution, indemnification or any other claims relating
to payment of the Settlement Fund or any Settlement Claims by the Defendants.

 

3.35         “Released Persons” means each of the Defendants and all
their Related Parties, each and every member of the Settlement Class, and Class
Counsel.

 

11

 

3.36         “Securities Action” means the consolidated securities actions
pending in the United States District Court for the District of Minnesota under
the caption In re Xcel Energy, Inc. Securities Litigation, Master File
No. 02-2677 (DSD/FLN).

 

3.37         “Settlement” means the resolution of the Action in the manner
and on the terms set forth herein.

 

3.38         “Settlement Claim” means the total dollar amount of each
Authorized Claimant’s Settlement Claims, as determined in Section 6.2, below.

 

3.39         “Settlement Fund” means the sum of eight million U.S.
dollars ($8,000,000) to be paid by Xcel pursuant to Section 5.1 below.

 

3.40         “Total Plaintiffs’ Case Contribution Compensation” means the
sum that shall be paid to the named Plaintiffs as Plaintiffs’ Case Contribution
Compensation.

 

3.41         “Xcel” means Xcel Energy Inc.

 

3.42         “Xcel stock” means the common stock issued by Xcel and
traded on the New York Stock Exchange.

 

4.             STIPULATION
TO CLASS CERTIFICATION OF THE SETTLEMENT CLASS

 

4.1           The
parties to this Agreement stipulate and agree that for settlement purposes only
this Action shall proceed as a non-opt out class action pursuant to Fed. R.
Civ. P. Rules 23(a)(1)-(4), 23(b)(1), and (b)(2) with Jane B. Stranch, Esq., of
Branstetter, Kilgore, Stranch, & Jennings and Glen Connor, Esq. of Whatley
& Drake, L.L.C., as Class Counsel and with a Settlement Class and Class
Period as defined above.

 

5.             THE SETTLEMENT
FUND

 

5.1           Within
ten (10) business days after the Court enters its Preliminary Approval Order,
Xcel shall deposit with the Escrow Agent in an interest-bearing account, pursuant
to the terms of the Escrow Agreement, the sum of eight million dollars
($8,000,000), which amount

 

12

 

shall be used to fund the
Settlement Fund described in the Escrow Agreement.  Interest earned on the Settlement Fund under
the Escrow Agreement shall accrue to the benefit of, and be added to, the
Settlement Fund.

 

5.2           Within
a reasonable time following receipt of invoices therefore, the Escrow Agent
shall pay from the Settlement Fund the costs of the Class Notice and other
costs relating to the administration of the Settlement (including the Escrow
Agent’s fees), as mutually agreed by Class Counsel and Defendants’
Counsel.  In the event the Settlement is
not approved and the Order and Final Judgment is not entered, Plaintiffs’
Counsel shall reimburse the Settlement Fund for half the cost of any such
expenses paid.

 

5.3           Within
ten (10) days of the Final Approval of the Settlement, the Escrow Agent shall
pay to Class Counsel out of the Settlement Fund (subject to Court approval) the
Plaintiffs’ Case Contribution Compensation, in an amount of $2,000 for each
Class Representative (a total of $6,000), which Class Counsel shall remit to
the Plaintiffs.

 

5.4           Also
within ten (10) days of the Final Approval of the Settlement, the Escrow Agent
shall pay to Class Counsel out of the Settlement Fund such Attorneys’ Fees and
Attorneys’ Expenses of Class Counsel as may be approved by the Court in the
Order and Final Judgment.

 

5.5           Following
the payment of amounts specified in Sections 5.2, 5.3 and 5.4, the Escrow Agent
shall pay over the Net Settlement Fund (at the joint written instruction of
Class Counsel and Defendants’ Counsel) to the Plan Account for administration
by the Administrators, in accordance with the provisions set forth herein.  The Administrators shall deposit the Net
Settlement Fund into the Plan Account in the following manner:

 

13

 

a.                                       The
Administrators shall provide Class Counsel with written notice of the amount of
additional Administrative Expenses incurred in connection with the
administration of the Settlement.  Class
Counsel promptly shall review the amount claimed as such and, if reasonable,
approve such amount for payment out of the Net Settlement Fund.

 

b.                                      If
requested, Xcel shall assist the Administrators with the calculation of
Settlement Claims, the identification of Authorized Claimants, and the payment
of Claims.  To the extent Xcel incurs any
expense in connection therewith, the Administrators shall reimburse Xcel from
the Net Settlement Fund for its reasonable and actual costs incurred.  Notwithstanding the foregoing, the Administrators
shall be solely responsible for all communications with Authorized Claimants
regarding their Claims, and neither Xcel nor its agents shall have any
responsibility in this regard. 
Plaintiffs’ Counsel shall direct the Administrators regarding the manner
and content of the Administrators’ written or other communications with
Authorized Claimants regarding their Claims. 
In addition, Class members will be instructed in the Notice and
Publication Notice to contact Plaintiffs’ Counsel, or an agent designated by
them, with any questions regarding the Settlement or Settlement Claims.  Neither Xcel nor its agents shall have any
responsibility with respect to such questions. 
Further, neither Defendants nor their Related Parties shall have any
responsibility, financial obligation or liability whatsoever with respect to
the investment or distribution of the Settlement Fund, with respect to

 

14

 

the
processing of claims against the Settlement Fund, or otherwise with respect to
the administration of this Settlement or the Settlement Fund.

 

c.                                       Although
the Defendants deny any wrongdoing, the parties agree that the payments
described above are intended as settlement of breach of fiduciary duty claims
for a monetary remedy under ERISA for allegedly lost earnings on assets in the
Plans and shall be treated as earnings on Plan assets for all purposes under
the Plans.  None of the Defendants’
payment to the Settlement Fund represents compensatory or punitive damages or
employer or employee contributions to the Plans.

 

5.6                                 Under
no circumstances shall Defendants be required to pay more than the Settlement
Amount of eight million U.S. dollars ($8,000,000), as set forth above in Section 5.1.  Upon such payment, Defendants’ payment
obligations under this Agreement shall be satisfied and fulfilled.

 

6.                                      PLAN
OF ALLOCATION OF THE NET SETTLEMENT FUND

 

6.1                                 Unless
otherwise agreed by the parties, within sixty (60) days after filing this
Agreement, the Defendants shall provide the Administrators or their designee
with the following information pertaining to the account(s) in the Plans of
each member of the Settlement Class as identified and maintained in the records
of the Plans:

 

a.                                       The
Claimant’s name, last known address, and social security number;

 

b.                                      The
information necessary to make the calculations in Section 6.2 below.  If precise data is not readily available, the
parties shall meet and confer regarding the data that will be used.  This information shall include for each
Claimant:  (a) the account balance in
U.S. dollars invested in Xcel stock at the beginning of the Class Period; (b)
the dollar value of

 

15

 

purchases
of Xcel stock during the Class Period; (c) the dollar value of sales of Xcel
stock during the Class Period; and (d) the account balance in U.S. dollars
invested in Xcel stock as of the end of the Class Period.

 

c.                                       Whether
the Claimant is a current participant in either Plan as of the most recent date
for which such information is reasonably available.

 

6.2                                 Within
thirty (30) days of Final Approval, the Administrators shall calculate the
Claimants’ Settlement Claims based on the information described in Section 6.1
and according to the following court approved-methodology:

 

a.                                       The
Administrators, with the assistance of Xcel, if necessary, shall determine the
approximate loss (“Loss”) for each member of the Settlement Class as follows:

 

Loss = (A + B) - C, where

 

A = (Value of (50% of the
number of shares that had been held in the Plans on September 23, 1999 [Adjusted
for the 1.55/share exchange of Xcel for NCE shares at the time of merger],
valued at the December 4, 2001 closing price/share of $27.56)) less (Value of those same shares on
the earlier of the March 31, 2003 closing price of $12.82/share or Participant’s
last day of participation in Company Stock Fund at the closing price on that
day)

 

AND

 

B
= (Purchase price of all company stock purchased from September 23, 1999 through March 31, 2003) less
(Value of all this purchased company stock still held on the earlier of March 31,
2003 or Participant’s last day of participation in the Company Stock Fund at
the closing price on the appropriate day)

 

AND

 

16

 

C = (Sale price of all
company stock sold during the period of September 23, 1999 through March 31, 2003).

 

b.                                      The
Losses of the Claimants as calculated in Section 6.2(a) will be totaled to
yield the Loss of each Plan as a whole over the Class Period (the “Plan Loss”).  The Net Settlement Fund shall be apportioned
between the Xcel 401(k) Plan and the NCE Union Plan according to the
proportionate size of each Plan’s Plan Loss.

 

c.                                       The
Administrators shall calculate for the Account of each Authorized Claimant an
amount which is the same percent of the amount of the Net Settlement Fund
allocated to the Plan in question as the Authorized Claimant’s Loss bears to
the Plan Loss of the Plan in question.

 

d.                                      The
Administrators shall identify all Claimants whose Settlement Claim is less than
twenty-five dollars ($25) (“De Minimis Amounts”).  All such Claimants whose Settlement payment
is De Minimis shall not receive an award from the Net Settlement Fund.  The remaining Claimants shall become
Authorized Claimants.  The De Minimis
Amounts shall then be allocated to the Authorized Claimants on a pro rata basis
based on each Authorized Claimant’s Loss, and such amounts shall be added to
the Settlement Claim for each Authorized Claimant.

 

e.                                       In
light of the manner in which the data is kept and the ease with which it can be
manipulated, it may be appropriate to simplify some of the features of these
calculations.  Such simplifications are
acceptable as long as the two basic features of the distribution are preserved:  (1) that all members

 

17

 

of the
Settlement Class receive their share of the Net Settlement Fund based
approximately on the formula referenced in § 6.2 which calculates relative
loss of Plan Participants as compared with one another; and (2) that the
distribution take place through the Plans so as to maximize the tax advantages
of investment in the Plans.

 

6.3                                 Promptly
after calculating each Authorized Claimant’s Settlement Claim, the
Administrators shall provide to Defendants the name, social security number,
and amount of each Authorized Claimant’s Settlement Claim, together with the
total of all such Claims.  Except for the
social security numbers, the same information shall be provided to Class
Counsel.

 

6.4                                 Any
Claimant who is an Authorized Former Participant Claimant shall have his or her
account reinstated in the Plan(s) in which he or she held Xcel stock during the
Class Period, for the sole purpose of receiving his or her allocation from the
Net Settlement Fund.

 

6.5                                 As
promptly as possible after deposit of the Net Settlement Fund into the Plan
Account pursuant to Section 5.3, the Administrators, or their agents,
shall cause an amount to be allocated to each Authorized Participant Claimant’s
or Authorized Former Participant Claimant’s Plan account equal to such individual’s
Settlement Claim.  Such amount shall be
allocated to the Authorized Claimant’s contribution source sub-account holding
Xcel stock during the Class Period in accordance with the existing investment
elections in effect for such sub-account (except that amounts credited to the
ESOP Accounts in the Plans, and all amounts credited to Authorized Former
Participant Claimants, shall be invested initially in the Vanguard Prime Money
Market Fund investment option), shall be treated and administered thereafter
for all purposes under the Plans as income credited to the Authorized Claimant’s
contribution source

 

18

 

sub-account under
the Plans, and shall thereafter be distributed only in accordance with the applicable
provisions of the Plans.

 

6.6                                 The
Administrators shall make available to Defendants’ Counsel and Class Counsel
any and all summaries, compilations, calculations, or tabulations of the claims
and amounts described in this Section 6, upon the request of Defendants’
Counsel, Class Counsel, or the Court.

 

7.                                      THE
SETTLEMENT FUND AND THE ADMINISTRATORS

 

7.1                                 The Parties shall treat the Settlement Fund as a “qualified
settlement fund” within the meaning of the regulations issued under Section 468B
of the Code and any comparable provision of state or local law (collectively,
the “Section 468B Regulations”). 
The Administrator shall be the “administrator”
for purposes of the Section 468B Regulations.  As such, it shall comply with all of the
requirements imposed on administrators by the Section 468B Regulations,
including, without limitation, obtaining a taxpayer identification number for
the Settlement Fund, preparing and filing all income tax returns and
information returns required to be filed by the Settlement Fund and paying all
taxes required to be paid by the Settlement Fund.  Xcel shall be the “transferor” for purposes
of the Section 468B Regulations.  As
such, it shall comply with all of the requirements imposed on transferors by
the Section 468B regulations, including, without limitation, delivering to
the Administrator a statement that complies with section 3(e) of the Section 468B
Regulations and attaching a copy of that statement to its federal income tax
return for the taxable year in which it makes the required payment to the
Settlement Fund.

 

7.2                                 Each Authorized Participant Claimant and
Authorized Former Participant Claimant shall be solely responsible for the
federal, state and local tax consequences to him, her or it of the crediting of
an allocable share of the Net Settlement Amount to his, her or its Plan account
pursuant to Section 6.5 of this Agreement. 
Xcel shall take the position for federal, state

 

19

 

and local tax purposes that the amounts so credited are not reportable as
income to the Authorized Participant Claimants or Authorized Former Participant
Claimants until distributed under a Plan, but no Defendant or Related Party
shall have any liability to any Authorized Participant Claimant, Authorized
Former Participant Claimant or other person (other than a taxing authority) if
a taxing authority determines that Xcel’s position is incorrect.

 

7.3                                 The
Administrators may resign by sixty (60) days written notice to the Court.  The Administrators may be removed by the
Plaintiffs at any time.  In the event of
the removal or resignation of the Administrators, the Plaintiffs may appoint
successor Administrators.  Upon executing
a written acceptance of an executed copy of this Order, and on the settlement
of the accounts and discharge of the prior Administrators, the successor
Administrators shall have, without further act on the part of anyone, all the
duties, powers, functions, immunities, and discretion granted to the original
Administrators.  Any Administrators who
are replaced, by reason other than death, shall execute all instruments and do
all acts that may be necessary or that may be ordered or requested in writing
by Plaintiffs or the Court or by any successor Administrators to transfer administrative
powers over the Settlement Fund to the successor Administrators.  The appointment of successor Administrators,
if any, shall not under any circumstances require the Defendants to make any
further payment of any nature into the Settlement Fund or otherwise.  All notices hereunder, including notices of
resignation or removal of the Administrators, must be in writing and directed
to the Court, the Administrators, Class Counsel, and the Defendants’ Counsel.

 

7.4                                 The
Administrators and, if necessary, the Administrators’ Contractors, shall in any
event remain available and engaged to respond to inquiries from members of the
Plaintiff

 

20

 

Class regarding
their Claims or any other aspect of this Agreement for six months after the Net
Settlement Fund is distributed to Authorized Claimants.

 

7.5                                 The
parties may apply to the Court to alter or amend the settlement administration
terms of this Agreement at any time, or from time to time, provided, however,
that no such amendment or modification shall in any way affect:  (a) the purposes of the Settlement Fund; (b)
the Court’s jurisdiction over the parties; (c) the powers, duties, and
liabilities of the Administrators under this Order; (d) the total amount of
money the Defendants are required to pay into the Fund; or (e) any material
term of the Agreement.

 

8.                                      STRUCTURAL
CHANGES TO THE PLANS

 

8.1                                 Subject
to the requirements of the collective bargaining agreements in place between
Xcel and its work force, Xcel will undertake to amend the Plans to provide that
each participant who has at least five years of service shall have the right to
direct the investment of his or her ESOP Accounts, as such term is defined in
the Plans, in the same manner and among the same investment alternatives as are
available for the investment of employee contributions to the Plans.

 

9.                                      SUBMISSION
TO JURISDICTION OF COURT

 

9.1                                 Each
and every member of the Settlement Class and each and every Defendant submits
to the jurisdiction of the Court and will be bound by the terms of this
Agreement, including, without limitation, any and all releases, conditioned on
the Final Approval of the Settlement and subject to their right to object, as
well as any other order of the Court including, without limitation, the Order
and Final Judgment barring further litigation against any of the Released
Persons on the Released Claims.

 

21

 

9.2                                 Each
Claimant specifically and personally submits to the jurisdiction of the Court.  Any and all disputes relating to Claims that
are not satisfactorily resolved by the Administrators shall be submitted to the
Court for final resolution.

 

10.                               NOTICE
TO MEMBERS OF THE SETTLEMENT CLASS

 

10.1                           The
Administrators shall send the Individual Notice by first-class mail, postage
prepaid, to the address of each member of the Settlement Class at the address
provided by the Defendants, or such other addresses as Plaintiffs’ Counsel has
available, within thirty (30) days after entry of the Preliminary Approval
Order.  The Administrators also shall
cause the Publication Notice, which shall be an abbreviated form of the Notice
that adequately informs the Settlement Class of the details of the Settlement
and their right to object thereto, to be published in the Minneapolis
Star-Tribune, the St. Paul Pioneer Press, and USA Today or some other national
publication mutually agreed upon by Class Counsel and Defendants’ Counsel.  The costs and expenses associated with the
Publication Notice, the Notice, and reasonable efforts by the Administrators to
identify addresses for members of the Settlement Class, shall be an
Administrative Expense and will be paid from the Settlement Fund in accordance
with Section 5, above.  Plaintiffs’
Counsel may also post the Notices (Exhibits A and B) on their websites.

 

11.                               PROCEDURE
FOR APPROVAL OF SETTLEMENT

 

11.1                           No
later than ten (10) days after execution of this Agreement, Class Counsel shall
file a motion with the Court seeking immediate entry of the Preliminary
Approval Order and, after Notice is given to the Settlement Class, a hearing
will be held by the Court pursuant to Rule 23 of the Federal Rules of Civil
Procedure on the fairness of the Settlement to the Class (“Settlement Fairness
Hearing”) and entry of the Order and Final Judgment approving the settlement.

 

22

 

11.2                           The
Preliminary Approval Order proposed by the parties and submitted with Class
Counsel’s motion for approval of the settlement shall:

 

a.                                       Give
preliminary approval to this Agreement;

 

b.                                      Conditionally
certify the Settlement Class for settlement purposes only pursuant to Rule
23(a) and b(1) and b(2) of the Federal Rules of Civil Procedure and appoint
Plaintiffs’ Counsel as counsel for the Settlement Class;

 

c.                                       Approve
the form of the Individual Notice, and direct the Administrators to mail the
Notice to each potential member of the Settlement Class, and publish within
thirty (30) days of the entry of the Preliminary Approval Order the Publication
Notice in the Minneapolis Star-Tribune, the St. Paul Pioneer Press, and USA
Today or another national publication mutually agreed upon by Class Counsel and
Defendants’ Counsel;

 

d.                                      Set
a briefing schedule and a date and time for the Settlement Fairness
Hearing to determine whether the Agreement is fair, reasonable, and adequate to
the members of the Plaintiff Class, to determine Plaintiffs’ Counsel’s
Attorneys’ Fees and Expenses, and to consider whether the Court should enter an
Order and Final Judgment;

 

e.                                       Set
a deadline by which all objections to the Settlement must be made;

 

f.                                         Stay
the Action until further order of the Court and enjoin the filing or
prosecution by any Class members of any actions based on or in any way related
to the Released Claims until the Settlement Fairness Hearing; and

 

23

 

g.                                      Determine
pursuant to Rule 23(c)(2) of the Federal Rules of Civil Procedure that the
Notices constitute the best notice practicable under the circumstances and due
and sufficient notice of the hearing and the rights of the members of the
Plaintiff Class as to all Persons entitled to those Notices.

 

11.3                           No
later than five (5) days after Preliminary Approval of the Settlement, the
Plaintiffs shall submit the Agreement and accompanying Exhibits to the U.S.
Department of Labor (“DOL”) with a notice of the date and time of the
Settlement Fairness Hearing.

 

11.4                           Prior
to the Settlement Fairness Hearing, an independent fiduciary selected by Xcel
and approved by Plaintiffs’ Counsel, which has acknowledged in writing that it
is a fiduciary with respect to the settlement of this Action on behalf of the
Plans (the “Independent Fiduciary”), shall have approved and authorized in
writing the Settlement in accordance with Prohibited Transaction Class
Exemption 2003-39.  If the Independent
Fiduciary disapproves or otherwise does not authorize the Settlement as set
forth in this paragraph prior to the Settlement Fairness Hearing, then the
Defendants shall have the option to waive this condition, such option to be
exercised in writing within the earlier of (i) ten (10) days after the
Defendants’ receipt of the Independent Fiduciary’s written determination, or
(ii) three (3) days prior to (a) the date set for the Settlement Fairness
Hearing, or (b) such later date to which the Court may, in its discretion,
continue the Settlement Fairness Hearing. 
If the Independent Fiduciary has not rendered a written report regarding
the Settlement by the eleventh day prior to the date set for the Settlement Fairness
Hearing, the Defendants may ask the Court to continue the Settlement Fairness
Hearing to allow the Independent Fiduciary to complete its assessment of the

 

24

 

Settlement.  If the Defendants elect not to waive this
condition, then this Settlement Agreement shall terminate and become null and
void and the provisions of Paragraph 13.9 shall apply.

 

11.5                           The
Order and Final Judgment proposed by the parties and submitted with the motion
for approval of the Settlement shall:

 

a.                                       Approve
this Agreement and Settlement as a fair, reasonable, and adequate settlement,
pursuant to Rule 23 of the Federal Rules of Civil Procedure, and compromise of
this Action, and direct payment of the Settlement Fund and compliance with all
other terms of this Agreement;

 

b.                                      Certify
the Settlement Class pursuant to Rule 23(a) and b(1) and b(2) of the Federal
Rules of Civil Procedure;

 

c.                                       Dismiss
the Complaint and the Action against each of the Defendants with prejudice on
the merits and without costs to any party;

 

d.                                      Terminate
any and all of the Released Claims;

 

e.                                       Terminate
any and all rights of the Defendants for reimbursement of their attorneys’ fees
in the Action;

 

f.                                         Bar
and enjoin any action against Defendants, Defendants’ Counsel, any member of
the Settlement Class, or Class Counsel based on the amount of any Settlement
Claim issued pursuant to the Plan of Allocation approved in the Final Approval
of the Settlement;

 

g.                                      Direct
that each party shall bear its own costs to the extent not allocated in this
Agreement;

 

h.                                      Reserve
jurisdiction over this Action and over any and all further proceedings
concerning the administration and consummation of the

 

25

 

Settlement
and reimbursement of Administrative Expenses, to the extent any party deems
necessary;

 

i.                                          Permanently
bar and enjoin the Plaintiffs, the Plans, the Plans’ fiduciaries, all members
of the Settlement Class and any other party from the institution or
prosecution, either directly, indirectly, or in a representative capacity, of
any other action in any court asserting any Released Claim against any Released
Person; and

 

j.                                          Contain
such other and further provisions consistent with the terms of this Agreement
as the Court may deem advisable and appropriate.

 

12.                               PLAINTIFFS’
COUNSEL’S ATTORNEYS’ FEES AND EXPENSES

 

12.1                           Plaintiffs’
Counsel shall receive Attorneys’ Fees and Expenses as awarded by the
Court.  The Attorneys’ Fees and Expenses
shall be paid to Plaintiffs’ Counsel from the Settlement Fund within ten (10)
days following the Final Approval of the Settlement.  Plaintiffs’ Counsel shall be solely
responsible for allocating attorneys’ fees among co-counsel, and Defendants
shall bear no responsibility for this allocation and shall not be subject to
suit under this Agreement or otherwise for the same.  Defendants will not object to or oppose Class
Counsel’s application for an award of reasonable Attorneys’ Fees and Expenses
and shall take no position on the amount of such fees and expenses sought by
Plaintiffs or awarded by the Court.  It
is agreed that the allowance or disallowance (in whole or in part) by the Court
of any application by Plaintiffs’ Counsel for an award of fees or expenses is
not a term or condition of the settlement set forth in this Agreement, and any
order or proceedings relating thereto, or any appeal from any such order, shall
not operate to terminate or cancel this Agreement.

 

26

 

13.                               RELEASE
OF CLAIMS

 

13.1                           Upon
Final Approval of the Settlement, the Plaintiffs, the Plans, the Plans’
fiduciaries, and all members of the Settlement Class shall be deemed to have,
and by operation of the Order and Final Judgment shall have, fully, finally,
and forever released and shall be forever barred from the prosecution of any
and all Released Claims against any and all of the Released Persons.

 

13.2                           Upon
Final Approval of the Settlement, Defendants shall be deemed to have, and by
operation of the Order and Final Judgment shall have, fully, finally, and
forever released, and are forever barred from the prosecution of, any and all
rights for reimbursement of attorneys’ fees or costs incurred in connection
with the Actions, as against the Plaintiffs, Plaintiffs’ counsel and all members
of the Settlement Class.

 

13.3                           The
Release of Claims set forth in this Agreement shall have no impact whatsoever
on any damages that are or could be sought or recovered in the Securities
Action, and under no circumstances shall the Settlement Fund or any Settlement
Claim be applied as a set-off or credit against any judgment, recovery, or
settlement obtained in the Securities Action.

 

13.4                           The
Release of Claims set forth in this Agreement shall have no impact whatsoever
on the obligations set forth in and required by the Agreement.  The Release of Claims granted in this
Agreement shall be effective as a bar to any and all currently unsuspected,
unknown, or partially known claims within the scope of the express terms and
provisions of the Release set forth in this Section, and Sections 3.33 and
3.34.  Accordingly, Plaintiffs hereby
expressly waive, on their own behalf and on behalf of the Plans, the Plans’
fiduciaries, and all members of the Class, any and all rights and benefits
respectively conferred upon them by the provisions of Section 1542 of the
California Civil Code.  Section 1542
reads in pertinent part:

 

27

 

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

 

The parties hereby acknowledge that the foregoing
waiver of the provisions of Section 1542 of the California Civil Code was
separately bargained for and that neither Plaintiffs on the one hand, nor
Defendants on the other, would enter into this Settlement Agreement unless it
included a broad release of all unknown claims. 
The parties each expressly agree that all release provisions in the
Agreement shall be given full force and effect in accordance with each and all
of their express terms and provisions, including those terms and provisions
relating to unknown, unsuspected or future claims, demands, and causes of action.  Plaintiffs assume for themselves on their own
behalf and on behalf of the Plans, the Plans’ fiduciaries, and the Class, and
Settling Defendants assume for themselves on their own behalf, the risk of his,
her, or its respective subsequent discovery or understanding of any matter,
fact or law, that, if now known or understood, would in any respect have
affected his, her, or its entering into this Agreement.

 

13.5                           This
Agreement shall in no event be construed as or be deemed evidence of an
admission or a concession on the part of any party with respect to any claim,
fault, liability, or damage whatsoever. 
The Defendants deny any and all wrongdoing of any kind whatsoever and do
not concede any infirmity in the defenses to the Action that the Defendants have
asserted or intend to assert.  The
Defendants enter into this Agreement in order to avoid further expense,
inconvenience, risk, and delay and to dispose of expensive, burdensome, and
likely protracted litigation.  The
Plaintiffs, the Plans and the Settlement Class also do not concede any
infirmity in any of their claims against Defendants and enter into this
Settlement Agreement in order to avoid further expense, inconvenience, risk,
and delay and to dispose of expensive, burdensome, and likely protracted
litigation.

 

28

 

13.6                           This
Agreement, whether or not consummated, and any proceedings taken pursuant to
this Agreement, shall not be construed as, or deemed to be evidence of, any
presumption, concession, or admission by any of the parties of:  (a) the truth of any fact alleged by
Plaintiffs or denial alleged by Defendants; (b) the validity of any claim or
defense that has been or could have been asserted in the Action; (c) the
existence or non-existence of any liability, breach of duty, prohibited
transaction, violation of law, fault, wrongdoing, or other wrongful act of any
of the Defendants; (d) or as evidence, a presumption, a concession, or an
admission of any infirmity in any claim or defense of any of the parties.

 

13.7                           This
Agreement shall not be construed as an admission or concession that the
consideration to be given in Settlement represents the amount, if any, which
could or would have been recovered after trial.

 

13.8                           Plaintiffs
and Xcel shall each have the right to terminate this Agreement by providing
written notice of their election to do so to all of the other parties hereto in
the event that (a) the Court declines to enter the Preliminary Approval Order
or some other order containing or incorporating the terms herein; (b) the Court
declines to enter the Order and Final Judgment or some other order consistent
with the terms herein; or (c) the Order and Final Judgment approving settlement
is modified or reversed in any material respect on appeal, reconsideration, or
rehearing (provided, however, that any modification or reversal as to
Plaintiffs’ Counsel’s Attorneys’ Fees or Expenses shall not be deemed material
for purposes of this paragraph).  The
parties agree that they will negotiate in good faith to preserve this Agreement
prior to exercising their rights of termination under this paragraph.

 

13.9                           In the
event this Agreement is terminated, it shall become null and void and of no
further force and effect, the parties shall be deemed to have reverted to their
respective status and

 

29

 

positions as of
the date immediately before the date of the execution hereof, and the parties
shall proceed in all respects as if this Agreement had not been executed.  In the event of such termination, the funds
paid into the Settlement Fund, plus interest earned thereon, less
Administrative Expenses incurred as of the date of termination, shall be
returned to the entity that paid the funds. 
If the Agreement is terminated, under no circumstances shall Plaintiffs,
Class Counsel, or the Administrators be required to reimburse Defendants for
Administrative Expenses already incurred as of the date of termination, except
as set forth in Section 5.2.

 

14.                               COOPERATION
OF THE PARTIES AND THEIR COUNSEL

 

14.1                           The
parties and their counsel agree to cooperate fully with one another to request
Court approval of this Agreement, and to use their best efforts to effect and
consummate the terms of this Agreement and the Settlement.

 

14.2                           Within
90 days of the Final Approval of the Settlement, the parties to this Agreement
shall comply with the provisions of the Joint Stipulation and Protective Order
entered by the Court, as relates to the destruction or return of confidential
materials.

 

14.3                           Before
the Plaintiffs or their counsel issue any press release relating to the Action
or its resolution, the proposed press release will be given to Xcel for
approval.  The press release will not be
issued unless Xcel consents in writing to its issuance; Xcel will not
unreasonably withhold that consent.

 

15.                               GENERAL
PROVISIONS

 

15.1                           This
Agreement incorporates by reference all Exhibits attached to it.

 

15.2                           This
Agreement and the attached Exhibits A through E, incorporated herein by
reference, constitute the entire agreement of the parties and may not be
modified or amended except by a writing signed by all parties.

 

30

 

15.3                           The
captions to this Agreement appear for the purpose of convenience only and have
no legal effect.

 

15.4                           Administration
and consummation of the terms of this Agreement shall take place under the
supervision and authority of the Court, and all parties hereto expressly
consent to the jurisdiction of the Court for such purposes.

 

15.5                           The
parties to this Agreement may execute this Agreement in any number of
counterparts and on separate counterparts, each of which shall constitute an
original, but all counterparts together shall constitute one and the same
document.

 

15.6                           Except
insofar as federal law is controlling, this Agreement and all documents
necessary to effect this Agreement shall be governed by and construed in
accordance with the laws of the State of Minnesota.

 

15.7                           Should
any provision of this Agreement require judicial interpretation, the parties
agree that the Court or other adjudicating body shall not apply a presumption
that the terms be more strictly construed against the party who prepared same,
it being agreed that all parties collectively participated in the negotiation
and preparation of this Agreement.

 

15.8                           The
parties intend this Settlement to be a final and complete resolution of all
disputes between them with respect to the Action.  The parties reserve their right to freely
rebut, in a manner that any such party determines to be appropriate, any
contention made in a public forum to the effect that the litigation was brought
or defended in bad faith or without reasonable basis.

 

15.9                           Any
notice required or desired to be given to any of the parties to this Agreement
shall be delivered by overnight mail and facsimile transmission addressed as
set forth in Exhibit C, or as may otherwise be designated by any party
by written notice to the other parties.

 

31

 

15.10                     Any and all
statutes of limitations, statutes of repose, and/or their defenses based upon
the passage of time applicable to Plaintiffs’ claims against Defendants shall
be tolled for the period from the filing of this Agreement with the Court to
the earlier of the date the Order and Final Judgment is entered or the
termination of this Agreement.

 

15.11                     This
Agreement shall be binding upon and inure to the benefit of the parties hereto,
Related Parties, and their respective successors and assigns.

 

15.12                     The undersigned
are duly authorized to execute this Agreement on behalf of the parties they
represent.

 

32

 

WHEREFORE,
the parties stipulate and agree that they will move the Court to enter an order
in the form of the Preliminary Approval Order, attached hereto as Exhibit C,
and schedule a hearing on approval of this Settlement under the terms and
conditions herein described on the first available date at least 60 days after
entry of the Preliminary Approval Order.

 

 

	
  December 31,
  2004

  	
   

  	
  /s/ JAMES G.
  STRANCH, III

  	
   

  
	
   

  	
   

  	
  James G.
  Stranch, III

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  /s/ JANE B.
  STRANCH

  	
   

  
	
   

  	
   

  	
  Jane B. Stranch

  
	
   

  	
   

  	
  BRANSTETTER,
  KILGORE,

  
	
   

  	
   

  	
  STRANCH & JENNINGS

  
	
   

  	
   

  	
  227 Second
  Avenue, North, 4th Floor

  
	
   

  	
   

  	
  Nashville,
  Tennessee 37201-1631

  
	
   

  	
   

  	
  (615) 254-8801 /
  (615) 255-5419 (fax)

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  /s/ JOE R.
  WATLEY, JR.

  	
   

  
	
   

  	
   

  	
  Joe R. Whatley,
  Jr.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  /s/ GLEN M.
  CONNOR

  	
   

  
	
   

  	
   

  	
  Glen M. Connor

  
	
   

  	
   

  	
  WHATLEY DRAKE,
  LLC

  
	
   

  	
   

  	
  2323 Second
  Avenue North

  
	
   

  	
   

  	
  Birmingham, AL
  35202

  
	
   

  	
   

  	
  Telephone:
  205-328-9576

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Co-Lead Counsel for Plaintiffs

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  /s/ ELLEN KELMAN

  	
   

  	
   

  	
   

  
	
  Ellen Kelman

  	
   

  	
   

  
	
  BRAUER,
  BUESCHER, GOLDHAMMER,

  	
   

  	
   

  
	
  KELMAN &
  DODGE

  	
   

  	
   

  
	
  1563 Gaylord St.

  	
   

  	
   

  
	
  Denver, CO 80206

  	
   

  	
   

  
	
  Telephone: (303)
  333-7751

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  /s/ JOHN A. COCHRANE

  	
   

  	
   

  	
   

  
	
  John A. Cochrane

  	
   

  	
   

  
	
  COCHRANE &
  BRESNAHAN, PA

  	
   

  	
   

  
	
  24 East 4th
  Street

  	
   

  	
   

  
	
  Saint Paul, MN
  55101

  	
   

  	
   

  
									

 

33

 

	
  /s/ JAY SMITH

  	
   

  	
   

  	
   

  
	
  Jay Smith

  	
   

  	
   

  
	
  GILBERT &
  SACKMAN, a Law

  	
   

  	
   

  
	
  Corporation

  	
   

  	
   

  
	
  6100 Wilshire
  Blvd., No. 700

  	
   

  	
   

  
	
  Los Angeles, CA
  90048

  	
   

  	
   

  
	
  Telephone:
  323-938-3000

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  /s/ GEORGE E. BARRETT

  	
   

  	
   

  	
   

  
	
  George E.
  Barrett

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  /s/ DOUGLAS S. JOHNSTON, JR.

  	
   

  	
   

  	
   

  
	
  Douglas S.
  Johnston, Jr.

  	
   

  	
   

  
	
  BARRETT,
  JOHNSTON & PARSLEY

  	
   

  	
   

  
	
  217 Second
  Avenue, North

  	
   

  	
   

  
	
  Nashville, TN
  37201

  	
   

  	
   

  
	
  Telephone: 

  	
  615-244-2202

  	
   

  	
   

  
	
  Facsimile: 

  	
  615-252-3798

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  /s/ BRIAN J. ROBBINS

  	
   

  	
   

  	
   

  
	
  Brian J. Robbins

  	
   

  	
   

  
	
  ROBBINS UMEDA
  & FINK, LLP

  	
   

  	
   

  
	
  610 West Ash
  Street, Suite 1800

  	
   

  	
   

  
	
  San Diego, CA
  92101-3350

  	
   

  	
   

  
	
  Telephone: (619)
  525-3990

  	
   

  	
   

  
	
  Facsimile: (619)
  525-3991

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Counsel
  for Plaintiffs

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  December 31,
  2004

  	
   

  	
  /s/ JOHN M. NEWMAN,
  JR.

  	
   

  
	
   

  	
   

  	
  John M. Newman,
  Jr.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  /s/ GEOFFREY J.
  RITTS

  	
   

  
	
   

  	
   

  	
  Geoffrey J. Ritts

  
	
   

  	
   

  	
  JONES DAY

  
	
   

  	
   

  	
  North Point

  
	
   

  	
   

  	
  901 Lakeside Avenue

  
	
   

  	
   

  	
  Cleveland, OH 44114

  
	
   

  	
   

  	
  216.586.3939/216.579.0212 (fax)

  
										

 

34

 

	
   

  	
   

  	
  /s/ TIMOTHY R. THORNTON

  	
   

  
	
   

  	
   

  	
  Timothy R. Thornton

  
	
   

  	
   

  	
  BRIGGS & MORGAN, P.A.

  
	
   

  	
   

  	
  2400 IDS Center

  
	
   

  	
   

  	
  80 South Eighth Street

  
	
   

  	
   

  	
  Minneapolis, MN 55402

  
	
   

  	
   

  	
  612.334.8400/612.3348650 (fax)

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Attorneys for All Defendants
  except James J. Howard

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  December 31, 2004

  	
   

  	
  /s/ RACHNA B. SULLIVAN

  	
   

  
	
   

  	
   

  	
  Rachna B. Sullivan

  
	
   

  	
   

  	
  RIDER BENNETT LLP

  
	
   

  	
   

  	
  33 South Sixth Street

  
	
   

  	
   

  	
  Minneapolis, MN 55402

  
	
   

  	
   

  	
  612.340.7951/612.340-7900 (fax)

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Attorney for Defendant James J.
  Howard

  
					

 

35

 

EXHIBIT A

 

UNITED STATES DISTRICT COURT FOR THE DISTRICT OF MINNESOTA

 

NOTICE OF CLASS ACTION SETTLEMENT

 

	
  In re Xcel Energy, Inc. ERISA Litigation

  	
  )

  
	
  Case Nos. 03-2218 and 03-2219

  	
  )

  
	
   

  	
  )

  

 

TO ALL MEMBERS OF THE FOLLOWING CLASS:

 

All persons who were participants or beneficiaries in
the Xcel Energy Inc. 401(k) Savings Plan and its predecessor plans or the New
Century Energies Employees’ Savings and Stock Ownership Plan for Bargaining
Unit and Former Non-Bargaining Unit Employees and who had Xcel common stock
allocated to your account at any time from September 23, 1999, to March 31,
2003.

 

PLEASE READ THIS NOTICE CAREFULLY.

A FEDERAL COURT AUTHORIZED THIS NOTICE.

THIS IS NOT A SOLICITATION.

 

This Notice advises you of a proposed class action
settlement.  The Settlement will provide
$8 million (less attorneys’ fees, expenses, and costs) to pay claims to
participants or beneficiaries who had Xcel common stock allocated to their
accounts in the Xcel Energy Inc. 401(k) Savings Plan and its predecessor plans
or the New Century Energies Employees’ Savings and Stock Ownership Plan for
Bargaining Unit and Former Non-Bargaining Unit Employees at any time from
September 23, 1999, to March 31, 2003. 
In this Notice, these two plans are referred to collectively as “the Plans.”  The Settlement will also provide that Xcel
will undertake to amend the Plans, subject to the requirements of Xcel’s
collective bargaining agreements, to loosen restrictions on diversification of
Xcel stock held in participants’ accounts in the ESOP portions of the
Plans.  The Settlement resolves a lawsuit
over whether fiduciaries of the Plans breached their fiduciary duties by
violating the Employee Retirement Income Security Act of 1974, as amended, 29
U.S.C. §§ 1001 et seq. (“ERISA”).  You
should read this entire Notice carefully because your legal rights are affected
whether you act or not.

 

	
  YOUR LEGAL RIGHTS AND OPTIONS IN THIS SETTLEMENT

  
	
  YOU CAN DO NOTHING

  NO ACTION IS NECESSARY TO

  RECEIVE A PAYMENT

  	
  You do not need to do anything to receive a payment. Under the
  Settlement, the Settlement Administrator will calculate the portion, if any,
  of the Settlement you are entitled to received. If you are a current
  participant in one of the Plans and are authorized to receive a payment, the
  Settlement Administrator will deposit the payment into your Plan account.

  If you are a Class Member and no longer participate in either Plan,
  your account will be reinstated in the Plan in which you participated for the
  sole purpose of receiving your settlement payment.

  
	
  YOU CAN OBJECT

  	
  You can write to the Court about why you don’t like the Settlement.

  
	
  YOU CAN GO TO A HEARING

  	
  You can ask to speak in Court about the fairness of the Settlement.

  

 

•                                          Your
rights and options, and the date by which you must object if you are opposed to
the Settlement, are explained in this notice. 

 

QUESTIONS? CALL (866) 890-4864 TOLL FREE, OR VISIT
www.xcelerisasettlement.com.

Do not call the Court, Xcel Energy, or Vanguard.

They cannot answer your questions.

 

1

 

WHAT THIS NOTICE CONTAINS

 

	
  BASIC INFORMATION

  
	
   

  	
   

  	
   

  
	
  1.

  	
  Why did I get
  this notice package?

  	
   

  
	
   

  	
   

  	
   

  
	
  2.

  	
  How do I get more
  information?

  	
   

  
	
   

  	
   

  	
   

  
	
  3.

  	
  What is this lawsuit
  about?

  	
   

  
	
   

  	
   

  	
   

  
	
  4.

  	
  Why is this a class
  action?

  	
   

  
	
   

  	
   

  	
   

  
	
  5.

  	
  Why is there a
  Settlement?

  	
   

  
	
   

  	
   

  	
   

  
	
  6.

  	
  How do
  I know if I am part of the Settlement?

  	
   

  
	
   

  	
   

  	
   

  
	
  7.

  	
  Are there
  exceptions to being included?

  	
   

  
	
   

  	
   

  	
   

  
	
  8.

  	
  I’m still not
  sure if I’m included

  	
   

  
	
   

  	
   

  	
   

  
	
  9.

  	
  Can I
  exclude myself from the Settlement?

  	
   

  
	
   

  	
   

  	
   

  
	
  THE SETTLEMENT
  BENEFITS—WHAT YOU GET

  
	
   

  
	
  10.

  	
  What does the
  Settlement provide?

  	
   

  
	
   

  	
   

  	
   

  
	
  11.

  	
  How much will my
  payment be?

  	
   

  
	
   

  	
   

  	
   

  
	
  HOW YOU GET A PAYMENT

  
	
   

  
	
  12.

  	
  How can I get my payment?

  	
   

  
	
   

  	
   

  	
   

  
	
  13.

  	
  When will I get my
  payment?

  	
   

  
	
   

  	
   

  	
   

  
	
  THE LAWYERS REPRESENTING
  YOU

  
	
   

  
	
  14.

  	
  Do I have a lawyer
  in this case?

  	
   

  
	
   

  	
   

  	
   

  
	
  15.

  	
  How will the lawyers
  be paid?

  	
   

  
	
   

  	
   

  	
   

  
	
  OBJECTING TO THE SETTLEMENT

  
	
   

  
	
  16.

  	
  What does it mean to
  object?

  	
   

  
	
   

  	
   

  	
   

  
	
  17.

  	
  How
  do I tell the Court if I don’t like the Settlement?

  	
   

  
	
   

  	
   

  	
   

  
	
  THE COURT’S FAIRNESS
  HEARING

  
	
   

  
	
  18.

  	
  When
  and where will the Court decide whether to approve the Settlement?

  	
   

  
	
   

  	
   

  	
   

  
	
  19.

  	
  Do I have
  to go to the fairness hearing?

  	
   

  
	
   

  	
   

  	
   

  
	
  20.

  	
  May I speak at the
  hearing?

  	
   

  
	
   

  	
   

  	
   

  
	
  IF YOU DO NOTHING

  
	
   

  
	
  21.

  	
  What happens
  if I do nothing at all?

  	
   

  
	
   

  	
   

  	
   

  
	
  GETTING MORE INFORMATION

  
	
   

  
	
  22.

  	
  Are
  there more details about the Settlement?

  	
   

  
				

 

2

 

BASIC INFORMATION

 

1.                                      Why
did I get this notice package?

 

You or someone in your family may have had funds in
the Plans invested in Xcel Energy Inc. common stock at some time from September
23, 1999, to March 31, 2003.

 

The Court sent you this Notice because you have a
right to know about a proposed Settlement of a class action lawsuit and about
all of your options, before the Court decides whether to approve the
Settlement.  If the Court approves the
Settlement and after objections and appeals, if any, are resolved, the Plans
and Settlement Administrator appointed by the Court will make the payments that
the Settlement allows.

 

This package explains the lawsuit, the Settlement,
your legal rights, what benefits are available, who is eligible for them, and
how to get them.  The Court in charge of
the case is the United States District Court for the District of Minnesota, and
the case is known as In re Xcel Energy, Inc. ERISA Litigation, Case Nos.
03-2218 and 03-2219.  The people who sued
are called Plaintiffs, and the company and the people they sued, Xcel and
several of its officers and directors, are called the Defendants.

 

2.                                      How
do I get more information?

 

You can call (866) 890-4864 toll-free, or visit the
website www.xcelerisasettlement.com, where you will find answers to common questions
about the Settlement, plus other information to help you determine whether you
are a Class member and whether you are eligible for a payment.  Please do not contact the Court, Xcel, or
Vanguard, the Plans’ recordkeeper.  They
will not be able to answer your questions.

 

3.                                      What
is this lawsuit about?

 

In two Complaints filed in 2002, the Plaintiffs
alleged that the Defendants breached their fiduciary duties and otherwise
violated ERISA, by using employer and employee contributions to the Plans to
purchase Xcel common stock at a time when, according to Plaintiffs, the stock
was an unsuitable and imprudent investment for the Plans.  Plaintiffs further allege that Defendants
violated ERISA by misrepresenting to Plaintiffs and participants in the Plans
the financial status of Xcel and, consequently, the true value of its
stock.  The Complaints seek to recover
from the Defendants losses to the Plans, and indirectly, to their participants
and beneficiaries, caused by Defendants’ alleged conduct.  The Complaints sought recovery for these
alleged losses, in addition to attorneys’ fees and expenses, and the costs of
the litigation.

 

In the Motion to Dismiss the Complaint that they filed
on December 20, 2002, Defendants denied each of the claims and allegations of wrongdoing
in the Complaints, and asked the court to dismiss all of the Plaintiffs’
claims.  On July 21, 2004, the Court
partially granted and partially denied the motion to dismiss, and the
Plaintiffs and Defendants have engaged in an extensive exchange of information
about the claims and defenses since that time, through the court-supervised
discovery process.  Defendants
specifically deny, among other things, the allegations that they breached any
fiduciary duties or any other provisions of ERISA in connection with the
acquisition or retention of Xcel stock by the Plans during the Class Period, or
before, and deny that they in any way misrepresented the financial performance
of Xcel or the value of its stock either directly or indirectly to participants
in the Plans.  Defendants deny that
Plaintiffs or the Plans are entitled to any relief of any kind.

 

4.                                      Why
is this a class action?

 

In a class action, one or more persons called Class
Representatives sue on behalf of people who have similar claims.  All of these people who have similar claims
make up the Class and are Class members. 
One court resolves the issues for all Class members.  Because the wrongful conduct alleged by Plaintiffs
in this case affected a large group of people in a similar way, Plaintiffs
filed their Complaints as class actions.

 

3

 

5.                                      Why
is there a Settlement?

 

The Court has not decided in favor of Plaintiffs or
Defendants.  Instead, both sides agreed
to a Settlement.  By agreeing to a Settlement,
the parties avoid the costs and risks of a trial, and the Class will get
compensation.  The Class Representatives
and their attorneys believe that the Settlement is best for all Class members.

 

6.                                      How
do I know if I am part of the Settlement?

 

The Court has conditionally certified this case as a
class action, in which everyone who fits the following description is a Class
Member:

 

All persons who were participants or beneficiaries
under the Xcel Energy Inc. 401(k) Savings Plan and its predecessor plans or the
New Century Energies Employees’ Savings and Stock Ownership Plan for Bargaining
Unit and Former Non-Bargaining Unit Employees during any portion of the Class
Period (September 23, 1999, to March 31, 2003, inclusive) and who had Xcel
common stock allocated to their account in the Plans at any time during the
Class Period, except for any person named as an individual Defendant in the
litigation and their immediate family members.

 

7.                                      Are
there exceptions to being included?

 

You are not a Class member if you were named as a
Defendant.  Also, immediate family
members of named Defendants are not in the Class.

 

8.                                      I’m
still not sure if I’m included

 

If you are still not sure whether you are included,
you can ask for free help.  Please call
toll-free (866) 890-4864 or visit www.xcelerisasettlement.com

 

9.                                      Can
I exclude myself from the Settlement?

 

In some class actions, class members have the
opportunity to exclude themselves from a Settlement.  This is sometimes referred to as “opting out”
of a Settlement.  You do not have the
right to exclude yourself from the Settlement in this case.  This case was certified under Fed. R. Civ. P.
23(b)(l) and (b)(2) as a “non opt-out” class action because of the way ERISA
operates.  Breach of fiduciary duty
claims must be brought by participants on behalf of the Plans, and any judgment
or resolution necessarily applies to all participants and beneficiaries of the
Plans.  As such, it is not possible for
any participants or beneficiaries to exclude themselves from the benefits of
the Settlement.  Therefore, you (as well
as the Plaintiffs, the Plans, the Plans’ fiduciaries, and any member of the
Settlement Class, whether acting on their own behalf or on behalf of any
persons they represent) will be bound by any judgments or orders that are
entered in this Action, and, if the Settlement is approved, you will be deemed
to have released each and all of the Defendants and all their related parties,
each and every member of the Settlement Class, and Class Counsel from any and all
claims, demands, damages, defenses, rights, liabilities, and causes of action
in law or equity whatsoever (whether known or unknown, matured or unmatured,
accrued or unaccrued, fixed or contingent, liquidated or unliquidated) arising
under federal or state or any other source of law, based upon or arising out of
or relating in any way to the acquisition, disposition, or retention by the
Plaintiffs, the Plans, the Plans’ fiduciaries, or any members of the Settlement
Class of Xcel stock during the Class Period, including, but not limited to,
claims which relate directly or indirectly to the facts, transactions, events,
occurrences, acts, disclosures, statements, omissions, or failures to act which
were alleged or could have been alleged in any of the Complaints filed in the
Action, or which are based on or arise out of or in any way relate to
communications with participants or beneficiaries directly or indirectly
pertaining to Xcel stock or are otherwise included in the release in the
Settlement, other than your right to obtain the relief provided to you, if any,
by the Settlement.

 

The release to be granted if the proposed Settlement
is approved does not include any claims that have been asserted under the state
or federal securities laws by the Plans or the Plans’ fiduciaries or any
individual member of the Class directly or derivatively in the actions
captioned In re Xcel Energy, Inc. Securities Litigation, Master File No.
02-2677,

 

4

 

or Gottlieb v. Xcel Energy Inc., et al., Case
No. 02-2931, both pending in the United States District Court for the District
of Minnesota, nor will the release preclude the Plans or members of the Class
from participating in the proposed settlement of In re Xcel Energy, Inc. Securities
Litigation, to the extent they may be eligible to do so.

 

Although you cannot opt out of Settlement, you can
object to the Settlement and ask the Court not to approve the Settlement.  See question 17 on page 6.

 

THE SETTLEMENT BENEFITS—WHAT YOU GET

 

10.                               What
does the Settlement provide?

 

Defendants have agreed to pay $8 million to resolve
Plaintiffs’ claims against them.  The
payment is called the Settlement Fund. 
Certain fees and expenses, including those incurred by Plaintiffs’
Counsel that are approved by the Court, will be deducted from the Settlement
Fund.  The remaining amount is called the
Net Settlement Fund.

 

Xcel also has agreed, subject to the requirements of
its collective bargaining agreements, to undertake to amend the Plans to permit
each participant with at least five years of service to direct the investment
of his or her ESOP accounts in the Plans, in the same manner and among the same
investment alternatives as are available for investment of employee
contributions to the Plans.  Additionally,
this Settlement preserves your rights to participate in the proposed settlement
of the In re Xcel Energy, Inc. Securities Litigation, to the extent you
are eligible.

 

11.                               How
much will my payment be?

 

Your share of the Settlement Fund will depend on the
number of shares of Xcel common stock you held in the Plans during the Class
Period, and the amount that you lost as a result of this holding, as compared
to the amounts other Plan participants lost. 
The formula will take into account your purchases or sales of Xcel stock
in your Plan account.  The more you lost
because of holding Xcel stock in your Plan account, the larger your share of
the Net Settlement Fund will be.  Your
share of the Net Settlement Fund, however, will be less than your actual
losses.  You are not responsible for
calculating the amount you may be entitled to receive under the Settlement —
this will be done by the Settlement Administrator.

 

Your settlement amount will be calculated in three
steps as follows:

 

A.                                    Net
Loss Calculation

 

If you have records reflecting all purchases or sales
of Xcel stock in your Plan account during the Class Period, you can estimate
what is called your Net Loss by performing the following calculation as to your
common stock:  [Value of (50% of the number
of shares that had been held in the Plans on September 23, 1999 [Adjusted for
the 1.55/share exchange of Xcel for NCE shares at the time of the merger],
valued at the December 4, 2001 closing price/share of $27.56)) less (Value of those same shares on
the earlier of the March 31, 2003 closing price of $12.82/share or
Participant’s last day of participation in the Company Stock Fund at the
closing price on the day)] PLUS
[(Purchase price of all company stock purchased from September 23, 1999 through March 31, 2003) less (Value
of all this purchased company stock still held on the earlier of March 31, 2003
or Participant’s last day of participation in the Company Stock Fund at the
closing price on the appropriate day)] MINUS [Sale
price of all company stock sold during the period of September 23, 1999 through March 31, 2003].

 

B.                                    Net
Loss Percentage Calculation

 

If your Net Loss was more than $25, the Settlement
Administrator will determine your net loss percentage by dividing your Net Loss
by the total Net Loss of the Class Members in each Plan.  The entire Net Settlement Fund will be
distributed to Class Members.

 

5

 

C.                                    Settlement
Payment

 

Your Net Loss percentage will determine your
Settlement payment, by multiplying your net loss percentage by the Net
Settlement Fund.

 

Do not worry if you do not have records that show your
activity in the Plans with respect to Xcel stock.  The Settlement Administrator will make all
calculations for you, and if you are entitled to a payment, will provide you
with a statement showing the amount of your payment.  If you have questions regarding the
settlement or the settlement amount you may receive, please do not contact Xcel
or Vanguard.  Instead, please call
toll-free (866) 890-4864 or visit www.xcelerisasettlement.com.

 

HOW YOU GET A PAYMENT

 

12.                               How
can I get my payment?

 

If you are a Class member and still participate in
either of the Plans, your Settlement proceeds will be deposited directly into
your Plan account.  Your Settlement
proceeds will be paid into the same subaccounts in which you held Xcel
stock.  Settlement amounts that are paid
into subaccounts funded by employee contributions will be initially invested in
the same manner as you direct the investment of contributions to your Plan
account.  Settlement amounts paid into
the ESOP subaccounts in the Plans will be invested initially in the Vanguard
Prime Money Market Fund investment option. 
After the Settlement amounts are paid into your Plan account, you may then
direct those funds to any desired fund option.

 

If you are a Class member and no longer participate in
the Plans, your account will be reinstated in the Plan in which you previously
participated for the sole purpose of receiving your Settlement proceeds.  Your Settlement proceeds will be invested
initially in the Vanguard Prime Money Market Fund investment option, and they
will thereafter be distributed in accordance with the applicable provisions of
the Plans.

 

13.                               When
will I get my payment?

 

The Court will hold a hearing on                  ,2005,
to decide whether to approve the Settlement. 
If Judge Doty approves the Settlement, appeals may follow.  It is always uncertain whether these appeals
can be resolved, and resolving them can take time, perhaps more than a
year.  Please be patient.

 

THE LAWYERS REPRESENTING YOU

 

14.                               Do
I have a lawyer in this case?

 

The Court appointed the following law firms to
represent you and other Class Members: 
Branstetter, Kilgore, Stranch & Jennings; Whatley Drake, L.L.C.;
Barrett, Johnston & Parsley; Robbins Umeda & Fink, LLP; Brauer,
Buescher, Goldhammer, Kelman & Dodge; Gilbert & Sackman, a Law
Corporation; and Cochrane & Bresnahan, PA. 
These lawyers are called Class Counsel. 
You will not be charged for these lawyers.  These lawyers will be paid from the
Settlement Fund.  If you want to be
represented by your own lawyer, you may hire one at your own expense.

 

15.                               How
will the lawyers be paid?

 

Class Counsel will ask the Court for attorneys’ fees
and expenses of up to one-third of the Settlement Fund.  The Court may award less than these amounts.

 

6

 

OBJECTING TO THE SETTLEMENT

 

You can tell the Court that you do not agree with the
Settlement or some part of it.

 

16.                               What
does it mean to object?

 

Objecting is simply telling the Court that you do not
like something about the Settlement.  It
will not have any bearing on your right to Settlement proceeds, if the
Settlement is approved.

 

17.                               How
do I tell the Court that I don’t like the Settlement?

 

You can object to the Settlement if you dislike any
part of it, or if you disagree with Class Counsel’s request for attorneys’ fees
and reimbursement of expenses.  You can
give reasons why you think the Court should not approve the Settlement or the
request for attorneys’ fees or expenses. 
The Court will consider your views. 
To object, you must send a letter saying that you object to the
Settlement in In re Xcel Energy, Inc. ERISA Litigation, Case Nos. 03-2218 and
03-2219.  Be sure to include your name,
address, telephone number, your signature, a detailed statement of your
specific objections to any matter before the Court, and all the grounds for
your objections to the Settlement.  You
must also include all documents you wish the Court to consider.  Mail the objection and any supporting papers
to the three different places below postmarked no later than                  ,
2005.  You must mail your objection by
this date.  If you fail to do so, the
Court will not consider your objections.

 

	
  Court

  	
   

  	
  Class
  Counsel

  	
   

  	
  Defense
  Counsel

  
	
  Clerk of the Court

  United States District Court

  District of Minnesota

  U.S. Courthouse

  300 S. 4th Street

  Minneapolis, MN 55415

  	
   

  	
  Jane B. Stranch

  Branstetter, Kilgore, Stranch, &

  Jennings

  227 Second Avenue, North 4th Floor

  Nashville, TN 37201-1631

  	
   

  	
  John M. Newman, Jr.

  Jones Day

  North Point

  901 Lakeside Avenue

  Cleveland, OH 44114

  

 

 

ALL PAPERS SUBMITTED MUST INCLUDE THE CASE NUMBERS 03-2218
AND 03-2219 ON THE FIRST PAGE.

 

No one will be entitled to object to the proposed
Settlement, to the final judgment to be entered in this Action, to any award of
attorneys’ fees or expenses, or otherwise to be heard, except by filing and
serving written objections (and, if you wish to be heard at the Settlement
Fairness Hearing, a written notice of intention to appear, as described below)
in the form and manner, and by the date, required by this Notice.  Any person who fails to object in the manner
and by the date required shall be deemed to have waived any objections, and
shall forever be barred from raising such objections in this or any other
action or proceeding.

 

THE COURT’S FAIRNESS HEARING

 

The Court will hold a hearing to decide whether to
approve the Settlement.  You may attend
and you may ask to speak, but you are not required to do so.

 

18.                               When
and where will the Court decide whether to approve the Settlement?

 

The Court will hold a Fairness Hearing on                  ,
2005, at the United States District Court for the District of Minnesota, U.S.
Courthouse, 300 S. 4th Street, Minneapolis, MN 55415, in Courtroom     ,
      Floor.  At
this hearing, the Court will consider whether the Settlement is fair,
reasonable, and adequate.  If there are
objections, the Court will consider them. 
Judge Doty will listen to people who have asked to speak at the
hearing.  The Court will also decide what
amount of Class Counsel fees and expenses will be paid from the Settlement
Fund.  After the hearing, the Court will
decide whether to approve the Settlement. 
We do not know how long these decisions will take.

 

7

 

Pending the final determination of whether the Settlement should be
approved, the parties, all members of the Class, the Plans, and the Plans’
fiduciaries are each barred and enjoined from instituting or prosecuting any
action that asserts any Released Claim against any Released Person.

 

19.                               Do
I have to go to the fairness hearing?

 

No.  Plaintiffs’
Counsel will answer questions Judge Doty may have.  You are, however, welcome to attend at your
own expense.  If you send an objection,
you do not have to go to Court to talk about it.  As long as your objection is postmarked by            ,
the Court will consider it.  You also may
pay your own lawyer to attend, but it is not required.

 

20.                               May
I speak at the hearing?

 

You may ask the Court for permission to speak at the
Fairness Hearing.  To do so, you must
send a letter saying that it is your “Notice of Intention to Appear at Fairness
Hearing in In re Xcel Energy, Inc. ERISA Litigation.”  The letter must include the names of any
witnesses you may call to testify at the Fairness Hearing and must identify any
documents you intend to introduce into evidence at the Fairness Hearing.  Be sure to include your name, address,
telephone number, and your signature. 
Your Notice of Intention to Appear must be postmarked no later than                ,
2005, and sent to the Clerk of the Court, Class Counsel, and Defense Counsel,
at the three addresses indicated above in question 17.

 

IF YOU DO NOTHING

 

21.                               What
happens if I do nothing at all?

 

The Settlement does not require you to do anything,
and there is no penalty for doing nothing at all.  If you are entitled to a Settlement payment,
you will receive a payment as discussed in question 11 on page 5.

 

GETTING MORE INFORMATION

 

22.                               Are
there more details about the Settlement?

 

This notice summarized the proposed Settlement.  More details are in the parties’ Stipulation
and Settlement Agreement.  You can get a
copy of the Agreement by visiting www.xcelerisasettlement.com, or you can
inspect the papers filed in this Action at the office of the Clerk of Court,
U.S. Courthouse, 300 S. 4th Street, Minneapolis, MN, during normal business
hours.  If you have questions about the
Settlement, call toll-free (866) 890-4864.

 

Remember, please do not call the Court, Xcel, or
Vanguard.  They cannot help you with
additional information.

 

DATE:                ,
2005

 

8

 

EXHIBIT B

 

UNITED STATES DISTRICT COURT FOR THE DISTRICT OF MINNESOTA

 

NOTICE OF CLASS ACTION SETTLEMENT

 

	
  In re Xcel Energy, Inc. ERISA Litigation

  	
  )

  
	
  Case Nos. 03-2218 and 03-2219

  	
  )

  
	
   

  	
  )

  

 

TO ALL MEMBERS OF THE FOLLOWING CLASS

 

All persons who were participants or beneficiaries in
the Xcel Energy Inc. 401(k) Savings Plan and its predecessor plans or the New
Century Energies Employees’ Savings and Stock Ownership Plan for Bargaining
Unit and Former Non-Bargaining Unit Employees and who had Xcel common stock
allocated to your account at any time from September 23, 1999, to March 31,
2003.

 

PLEASE READ THIS NOTICE CAREFULLY.

A FEDERAL COURT AUTHORIZED THIS NOTICE.

THIS IS NOT A SOLICITATION.

 

A
Settlement has been proposed in a class action lawsuit brought by Plaintiffs on
behalf of the Xcel Energy Inc. 401(k) Savings Plan and its predecessor plans
and the New Century Energies Employees’ Savings and Stock Ownership Plan for
Bargaining Unit and Former Non-Bargaining Unit Employees against Xcel and
certain of its officers and directors for alleged breaches of fiduciary duty
under the Employee Retirement Income Security Act of 1974, as amended
(“ERISA”).  The Settlement will provide
$8 million to fully resolve the lawsuit. 
Persons who were participants or beneficiaries of either plan who had
Xcel common stock allocated to their accounts between September 23, 1999, and
March 31, 2003 (“Class Period”) may be entitled to a share of the
Settlement.  Xcel also has agreed,
subject to the requirements of its collective bargaining agreements, to
undertake to amend the Plans to loosen restrictions on diversification of Xcel
stock held in participants’ accounts in the ESOP portions of the Plans.

 

The
United States District Court for the District of Minnesota authorized this
notice. The Court will hold a hearing to decide whether to approve the
Settlement, so that the benefits may be paid.

 

WHO IS INCLUDED?

 

You
are a Class member and could get benefits if you had Xcel common stock
allocated to your Plan account during the Class Period.  Persons named as individual Defendants in the
lawsuit, as well as their immediate family members, are not Class members.

 

1

 

WHAT IS THIS
ABOUT?

 

The
lawsuit claimed that the Defendants breached their duties under ERISA by
offering Xcel common stock as an investment option in the Plans and investing
and retaining the Plans’ assets in Xcel stock at a time when it was an
unsuitable and imprudent investment for the Plans, providing misleading
information regarding the financial condition of Xcel and the prudence of
investing in its stock, and failing to take appropriate actions to protect
participants and beneficiaries from losses to the Plans that were caused by
these actions.  Defendants deny that they
breached any fiduciary duties or any other provisions of ERISA in connection
with Xcel stock in the Plans, or that they misrepresented the financial
performance of Xcel or the value of Xcel stock to participants in the
Plans.  The Court did not decide which
side was right, but both sides agreed to the Settlement to ensure a resolution,
avoid the cost and risk of litigation, and to provide benefits to Class
members.

 

WHAT DOES THE
SETTLEMENT PROVIDE?

 

Xcel
agreed to create a fund of $8 million to be divided among the Class
members.  A Settlement Agreement,
available at the website below, describes all of the details about the proposed
Settlement.  Your share of the fund, if
any, will depend on the decline in value of shares of Xcel common stock held in
your Plan account during the Class Period, as compared to the decline in value
of shares of Xcel common stock held by other Plan participants in their
accounts.

 

HOW DO YOU RECEIVE
A PAYMENT?

 

If you
are a Class member and are entitled to a share of the Settlement amount
according to the Agreement, you will not be required to do anything to receive
a payment.  Payment will be made directly
to your Plan account or, if you no longer are a participant in one of the
Plans, your account will be reinstated in the Plan in which you participated
for the sole purpose of distributing your Settlement proceeds.  Either way, the Plans will notify you of the
amount of your payment.

 

CAN I OPT OUT OF
THE SETTLEMENT?

 

You do
not have the right to exclude yourself from the Settlement in this case.  The case was certified under Federal Rules of
Civil Procedure 23(b)(1) and (b)(2) as a “non opt-out” class action because of
the way ERISA operates.  Therefore, you
will be bound by any judgments or orders that are entered in this Action, and, if
the Settlement is approved, you will be deemed to have released all of the
Defendants and their related parties, each and every member of the Settlement
Class, and Class counsel from all claims that were or could have been asserted
in this case or are otherwise included in the release in the Settlement, other
than your right to obtain the relief provided to you, if any, by the
Settlement.

 

The
Court will hold a hearing in this case (In re Xcel Energy, Inc. ERISA
Litigation, Case Nos. 03-2218 and 03-2219) on                     ,
2005, at the United States Courthouse, 300 S. 4th
Street, Minneapolis, Minnesota, to consider whether to approve the Settlement
and a request by the lawyers representing all Class members (Branstetter,
Kilgore, Stranch & Jennings; Whatley Drake, L.L.C.; Barrett, Johnston &
Parsley; Robbins Umeda & Fink, LLP; Brauer,

 

2

 

Buescher, Goldhammer, Kelman & Dodge; Gilbert
& Sackman, a Law Corporation; and Cochrane & Bresnahan, P.A.) for
attorneys’ fees and expenses.  The fees
and expenses, if approved, will be paid from the Settlement Fund.  You may ask to appear at the hearing, but it
is not required.  Although you cannot opt
out of the Settlement, you can object to all or any part of the Settlement.

 

For
more information regarding anything in this Notice, call toll-free (866)
890-4864, or visit www.xcelerisasettlement.com.

 

3

 

EXHIBIT C

 

UNITED STATES DISTRICT COURT

DISTRICT OF MINNESOTA

 

	
  In re Xcel Energy, Inc. Securities, Derivative

  & ERISA Litigation

  	
  Master File: Civil 02-2677 (DSD/FLN)

  
	
   

  	
  MDL No. 1511

  
	
  This Document Relates to Case Nos. 03-2218

  and 03-2219, the “ERISA Actions.”

  	
   

  

 

ORDER PRELIMINARILY APPROVING SETTLEMENT, CONDITIONALLY

CERTIFYING CLASS FOR PURPOSES OF SETTLEMENT, APPROVING FORM AND

MANNER OF NOTICE, AND SCHEDULING HEARING ON FAIRNESS OF

SETTLEMENT PURSUANT TO FED. R. CIV. P. 23(e)

 

The
motion of Plaintiffs for an Order (1) preliminarily approving the settlement of
the above-captioned action pursuant to the terms and conditions of the
Stipulation and Agreement of Settlement of ERISA Actions (the “Agreement”),
dated                    ;
(2) approving the form of Notice and directing the manner of delivery and
publication of the Notice; (3) conditionally certifying a non-opt-out class
under Fed. R. Civ. P. 23(a) and 23(b)(l) and (b)(2) for purposes of the
Settlement and the final approval thereof; and (4) scheduling a hearing to
consider the fairness of the Settlement pursuant to Fed. R. Civ. P. 23(e) and
to consider the application for fees and expenses by Plaintiffs’ Counsel
pursuant to the common fund doctrine, having come before the Court, and upon
consideration of the Agreement and exhibits attached thereto, Plaintiffs’
motion and the pleadings and records on file, and good cause appearing, it is
hereby ORDERED as follows:

 

1.                                                    To
the extent not otherwise defined herein, all capitalized terms shall have the
same meaning as used in the Agreement.

 

 

2.                                                    The
Court has jurisdiction over the subject matter of this Action and over all
parties to this Action, including the Plans, the Plans’ fiduciaries, all
members of the Settlement Class, and all Defendants.

 

3.                                                    The
Settlement documented in the Agreement is hereby PRELIMINARILY APPROVED as
appearing on its face to be fair, reasonable, and adequate; to have been the
product of serious, informed, and extensive arms’ length negotiations among the
parties; and for there to have been a genuine controversy between the parties
involving the Defendants’ compliance with the fiduciary and other requirements
of ERISA.

 

4.                                                    The
Court finds that the form of Notice proposed by Plaintiffs is hereby
APPROVED.  Such Notice shall be (a)
mailed by first-class mail, postage prepaid, to the last known address of all
known Class members within 30 days of entry of this Order; and (b) published in
the Minneapolis Star-Tribune, the St. Paul Pioneer Press, and USA Today or
another national publication mutually agreed upon by counsel within 30 days of the
entry of this Order.  Plaintiffs’ Counsel
will ensure that the Notice and Publication Notice shall be handled in the
manner set forth in and required by the Agreement, and shall file an affidavit
attesting to the mailing of the Notice and publication of the Publication
Notice with the Court at or before the Settlement Fairness Hearing.

 

5.                                                    The
form and manner of delivery and publication of the Notice and Publication
Notice directed hereby and in the Agreement meet the requirements of Fed. R. Civ.
P. 23 and due process, constitute the best notice practicable under the
circumstances, and shall constitute due and sufficient notice to all members of
the Class.

 

6.                                                    The
Court hereby PRELIMINARILY APPROVES the maintenance of this Action as a class
action for purposes of the Settlement pursuant to Fed. R. Civ. P. Rule 23(a)
and

 

2

 

23(b)(l) and (b)(2). 
Specifically, the Court FINDS that (a) the number of members of the
Class is so numerous that joinder of all members thereof is impracticable; (b)
there are questions of law and fact common to the Class; (c) the claims of the
named Plaintiffs are typical of the claims of the Class; (d) the named
Plaintiffs will fairly and adequately represent the interests of the Class; and
(e) the prosecution of separate actions by individual members of the Class
would create a risk of (i) inconsistent or varying adjudications with respect
to individual members of the Class that would establish incompatible standards
of conduct for Defendants; (ii) adjudications with respect to individual
members of the Class which would as a practical matter be dispositive of the
interests of the other members of the Class; (iii) Defendants have acted or
refused to act on grounds generally applicable to the class; (iv) Plaintiffs
seek relief which is predominantly injunctive or declaratory in nature, and
monetary relief sought therewith flows directly from liability to the class as
a whole on the claims forming the basis of the injunctive or declaratory
relief.  Also for purposes of the
proposed Settlement only, the Court further finds and determines, pursuant to
Rule 23(a) of the Federal Rules of Civil Procedure, that Donald Newcome, Leonard
Banks and Gene Barday have and will adequately represent the Class as Class
Representatives, and are hereby approved as Class Representatives.

 

7.                                                    Accordingly,
for purposes of the Settlement only, this Action is hereby conditionally
CERTIFIED as a class action pursuant to Fed. R. Civ. P. 23(a) and 23(b)(1) and
(b)(2), with the Class defined as follows:

 

All
Persons who were participants or beneficiaries under the Plans at any time
between September 23, 1999, and March 31, 2003, inclusive, and who had Xcel
common stock allocated

 

3

 

to their Plan account at any time during that period,
other than persons who are named as individual Defendants in the Complaints and
their immediate family members.

 

8.                                                    The
Court appoints as counsel for the Class the firms of Branstetter, Kilgore,
Stranch & Jennings; Whatley Drake, L.L.C.; Barrett, Johnston & Parsley;
Robbins Umeda & Fink, LLP; Brauer, Buescher, Goldhammer, Kelman &
Dodge; Gilbert & Sackman, a Law Corporation; and Cochrane & Bresnahan,
PA.  Based on the proceedings in this
matter to date and the documents on file with the Court, the Court concludes
that Class counsel has and will represent the Class fairly and adequately.  Appointment of the above-named counsel as
Class counsel is supported by the significant work that Class counsel has
performed in identifying and investigating the potential claims in this action,
the experience of Class counsel in handling class actions and ERISA actions,
Class counsel’s knowledge of ERISA, and the resources that Class counsel has
committed to the prosecution of this action.

 

9.                                                    A
hearing (the “Settlement Fairness Hearing”) pursuant to Fed. R. Civ. P. 23(e)
is hereby SCHEDULED to be held before the Court on                                                ,
2005, at   .m. in Courtroom        for
the following purposes:

 

a.                                       to
determine whether the proposed Settlement is fair, reasonable, and adequate and
should be approved by the Court;

 

b.                                      to
determine finally whether this Action satisfies the applicable prerequisites
for class action treatment under Fed. R. Civ. P. 23(a) and 23(b)(1) and (b)(2)
for purposes of the Settlement;

 

c.                                       to
determine whether the Settlement has been negotiated at arm’s length by the
Plaintiffs and their counsel on behalf of the Plans, the Plans’ fiduciaries,
and the

 

4

 

Settlement Class, whether the Plaintiffs have acted
independently and that their interests are identical to the interests of the
Plans, the Plans’ fiduciaries, and the Settlement Class, and for the Court to
determine that the negotiations and consummation of the Settlement by the
Plaintiffs on behalf of the Plans, the Plans’ fiduciaries, and the Settlement
Class do not constitute “prohibited transactions” as defined by ERISA §§ 406(a)
or (b);

 

d.                                      to
determine whether the Order Approving Settlement as provided under the
Agreement should be entered and whether the Released Parties should be released
of and from the Released Claims, as provided in the Agreement;

 

e.                                       to
determine whether the bar order provisions in the Agreement should be entered
barring and enjoining (a) any action against Defendants, their Related Parties,
Defendants’ counsel, any member of the Settlement Class, or Class Counsel based
on the amount of any Settlement Claim issued pursuant to the Court-approved
Plan of Allocation, and (b) all Plaintiffs, the Plans, the Plans’ fiduciaries,
all members of the Settlement Class, all Defendants, and any other party from
instituting or prosecuting, either directly, indirectly, or in a representative
capacity, any other action in any court asserting any Released Claim against
any Released Person;

 

f.                                         to
determine whether the proposed Plan of Allocation of the Settlement Fund is
fair, reasonable, and adequate and should be approved by the Court;

 

g.                                      to
determine whether Plaintiffs’ Counsel’s application for an award of attorneys’
fees and reimbursement of expenses pursuant to the common fund doctrine is
fair, reasonable, and adequate and should be approved by the Court;

 

5

 

h.                                      to
consider the Class Representatives’ applications for awards of incentive fees
in the amount of $2,000; and

 

i.                                          to
rule upon such other matters as the Agreement contemplates and as the Court may
deem just and proper.

 

10                                                 Any
application by Plaintiffs’ Counsel for attorneys’ fees and reimbursement of
expenses, and all papers in support thereof, shall be filed with the Court and
served on all counsel of record no less than 21 days before the Settlement
Fairness Hearing.

 

11.                                              The
Court having determined preliminarily that this action may proceed as a non-opt
out class action under Fed. R. Civ. P. 23(a) and 23(b)(l) and (b)(2), Class
members shall be bound by any judgment in this action, subject to the Court’s
final determination at the Settlement Fairness Hearing as to whether this
action may so proceed.

 

12.                                              The
Court shall consider comments or objections to the certification of the Class under
Fed. R. Civ. P. 23(a) and 23(b)(1) and (b)(2), the Settlement, the Plan of
Allocation, the award of attorneys’ fees and reimbursement of expenses, and the
incentive payment to the Class Representatives at the Settlement Fairness
Hearing, but only if such comments or objections and any supporting papers are
filed with the Clerk of the Court, United States District Court for the
District of Minnesota, 300 S. 4th St., Minneapolis, Minnesota, no less than 14
days before the Settlement Fairness Hearing, and by the same date, copies of
all such papers are served on each of the following persons:

 

Jane B. Stranch

BRANSTETTER, KILGORE, STRANCH & JENNINGS

227 Second Avenue, North, 4th Floor

Nashville, TN 37201-163 1

615.254.8801  / 615.255.5419 (fax)

email: jbs@branstetterlaw.com

 

6

 

John M. Newman, Jr.

JONES DAY

North Point

901 Lakeside Avenue

Cleveland, OH  44114

216.586.3939 / 216.579.0212 (fax)

email: jmnewman@jonesday.com

 

Written objections must provide a detailed statement
of the objector’s specific objections to any matter before the Court and all
the grounds therefor, and must include all documents such person wishes the
Court to consider.

 

13.                                              Attendance
at the hearing is not necessary; however, persons wishing to be heard orally in
opposition to the approval of the Settlement, the Plan of Allocation, the
requests for attorneys’ fees and reimbursement of expenses, or the request for
an incentive payment to the Class Representatives must state in their written
objection(s) their intention to appear at the hearing.  Such persons must identify in their written
objection(s) the names of any witness they may call to testify and any exhibits
they intend to introduce into the evidence at the Settlement Fairness
Hearing.  Class members do not need to
appear at the hearing or take any other action to indicate their approval of
the Settlement.

 

14.                                              No
person shall be entitled to object to the proposed Settlement, to the final
judgment to be entered in this Action, to any award of attorneys’ fees or
expenses, or otherwise to be heard, except by filing and serving written
objections (and, if such person wishes to be heard at the Settlement Fairness
Hearing, a written notice of intention to appear) in the form and manner, and
by the date, required by the Notice.  Any
person who fails to object in the manner and by the date required shall be
deemed to have

 

7

 

waived any objections, and shall forever be barred
from raising such objections in this or any other action or proceeding.

 

15.                                              Pending
final determination of whether the Settlement should be approved, the parties,
all members of the Class, the Plans, and the Plans’ fiduciaries are each hereby
BARRED AND ENJOINED from instituting or prosecuting any action that asserts any
Released Claim against any Released Person.

 

16.                                              If
the Agreement is terminated pursuant to the provisions of Section 13.8 thereof,
this Preliminary Order shall be null, void, and of no further force or effect,
and each party to the Agreement shall be restored to his, her, or its
respective position as it existed prior to the execution of the Agreement.

 

17.                                              The
Court hereby retains jurisdiction for purposes of implementing the Agreement
and reserves the power to enter additional orders to effectuate the fair and
orderly administration and consummation of the Settlement and reimbursement of
Administrative Expenses, as may from time to time be appropriate, and
resolution of any and all disputes arising thereunder.

 

SO
ORDERED this             
day of             ,
2005.

 

 

	
   

  	
   

  
	
   

  	
  HON.
  DAVID S. DOTY

  
	
   

  	
  UNITED
  STATES DISTRICT COURT

  
	
   

  	
  DISTRICT
  OF MINNESOTA

  

 

8

 

EXHIBIT D

 

UNITED STATES DISTRICT COURT

DISTRICT OF MINNESOTA

 

	
  In re Xcel Energy, Inc. Securities, Derivative

  & ERISA Litigation

  	
  Master File: Civil 02-2677 (DSD/FLN)

  
	
   

  	
  MDL No. 1511

  
	
  This Document Relates to Case Nos. 03-2218

  and 03-2219, the “ERISA Actions.”

  	
   

  

 

ORDER AND FINAL JUDGMENT

 

This
action came on for a final hearing on a proposed settlement (the “Settlement”)
of this conditionally certified class action and the issues having been duly
heard and a decision having been duly rendered,

 

IT IS HEREBY
ORDERED AND ADJUDGED:

 

1.                                                    To
the extent not otherwise defined herein, all terms shall have the same meaning
as used in the Stipulation and Agreement of Settlement of ERISA Actions dated                       
(the “Agreement”).

 

2.                                                    The
Court has jurisdiction over the subject matter of this Action and over all
parties to this Action, including the Plans, the Plans’ fiduciaries, all
members of the Settlement Class, and all Defendants.

 

3.                                                    The
Court hereby approves and confirms the Settlement embodied in the Agreement as
being a fair, reasonable, and adequate settlement and compromise of this
Action, adopts the Agreement as its judgment, and orders that the Agreement
shall be herewith effective, binding, and enforced according to its terms and
conditions.  Among the factors considered
by the Court in concluding that the Settlement is fair, reasonable,

 

 

and adequate are: 
(1)  that cases involving
investment of ERISA plan assets in company stock represent an unsettled and
developing area of the law; (2) that the Defendants have asserted numerous
substantive defenses, including the arguments that a “presumption of prudence”
applies to investment of plan assets in company stock; (3) that Settlement
removes the risks, delay, and costs to the Plans and the Class associated with
continued litigation and delivers assured benefits to the Class (while
preserving Class members’ rights to participate in the proposed settlement of
the Securities Action to the extent they may be eligible under that settlement
agreement); and (4) that the structural changes to the Plans anticipated by the
Agreement provide significant economic benefit to Class members, in addition to
the cash payments to be made under the Agreement.

 

4.                                                    The
Court determines that the Settlement has been negotiated vigorously and at
arm’s length by the Plaintiffs and their counsel on behalf of the Plans and the
Settlement Class and further finds that, at all times, the Plaintiffs have
acted independently and that their interests are identical to the interests of
the Plans and the Settlement Class, and that Plaintiffs have at all times
adequately represented the Class. 
Accordingly, the Court determines that the negotiation and consummation
of the Settlement by the Plaintiffs on behalf of the Plans, the Plans’
fiduciaries, and the Settlement Class do not constitute “prohibited
transactions” as defined ERISA §§ 406(a) or (b).

 

5.                                                    The
Court determines that the Notice transmitted to the Settlement Class, pursuant
to the Preliminary Approval Order concerning the Settlement and the other
matters set forth therein, is the best notice practicable under the
circumstances and included individual notice to all members of the Settlement
Class who could be identified through reasonable efforts.  Such Notice provides valid, due, and
sufficient notice of these

 

2

 

proceedings and of the matters set forth therein,
including the Settlement described in the Agreement, to all persons entitled to
such notice, and such Notice has fully satisfied the requirements of Rule 23,
Fed. R. Civ. P. and the requirements of due process.

 

6.                                                    The
Court hereby approves the maintenance of this Action as a class action for
purposes of the Settlement pursuant to Fed. R. Civ. P. Rule 23(a) and 23(b)(l)
and (b)(2).  Specifically, the Court
finds that (a) the number of members of the Class is so numerous that joinder
of all members thereof is impracticable; (b) there are questions of law and
fact common to the Class; (c) the claims of the named Plaintiffs are typical of
the claims of the Class; (d) the named Plaintiffs will fairly and adequately
represent the interests of the Class; and that (e) (i) the prosecution of
separate actions by individual members of the Class would create a risk of
inconsistent or varying adjudications with respect to individual members of the
Class that would establish incompatible standards of conduct for Defendants;
(ii) adjudications with respect to individual members of the Class which would
as a practical matter be dispositive of the interests of the other members of
the Class; (iii) Defendants have acted or refused to act on grounds generally
applicable to the class; (iv) Plaintiffs seek relief which is predominantly
injunctive or declaratory in nature, and monetary relief sought therewith flows
directly from liability to the class as a whole on the claims forming the basis
of the injunctive or declaratory relief.

 

7.                                                    The
Court hereby approves the maintenance of the Action as a class action for
settlement purposes only pursuant to Fed. R. Civ. P. Rule 23(a), 23(b)(1) and
(b)(2), with the class being defined as follows:

 

All Persons who were
participants or beneficiaries under the Plans at any time between September 23,
1999, and March 31, 2003, inclusive, and who had Xcel common stock allocated to
their Plan account at any time during that period, other than persons who are

 

3

 

named as individual
Defendants in the Complaints and their immediate family members.

 

8.                                                    The
Court hereby dismisses the Complaints and the Action against the Defendants
with prejudice and on the merits, and without taxation of costs in favor of or
against any party.

 

9.                                                    As
of the date of Final Approval of Settlement (as defined in the Agreement), the
Plaintiffs, the Plans, the Plans’ fiduciaries, and each member of the Class on
their own behalf and on behalf of their respective heirs, executors,
administrators, past and present partners, officers, directors, agents,
attorneys, predecessors, and assigns, shall have released, and shall be deemed
to have released, each and all of the Released Persons from the Released
Claims, and the Defendants shall be deemed to have released the Plaintiffs, the
Settlement Class and Class Counsel from the Released Claims, in accordance with
the terms of the Agreement.

 

10.                                              The
Plaintiffs, Plans, the Plans’ fiduciaries, all members of the Settlement Class,
and any other party are hereby permanently barred and enjoined from instituting
or prosecuting, either directly, indirectly, or in a representative capacity,
any other action in any court asserting any and all Released Claims against any
and all Released Persons.  Defendants are
hereby permanently barred and enjoined from instituting or prosecuting, either
directly, indirectly, or in a representative capacity, any other action in any
court asserting any and all Released Claims against Plaintiffs, the Settlement
Class and Class Counsel.

 

11.                                              All
parties are hereby permanently barred and enjoined from the institution and
prosecution, either directly, indirectly, or in a representative capacity, of
any actions against any Defendants, their Related Parties, Defendants’ Counsel,
any member of the

 

4

 

Settlement Class, or Class Counsel based on the amount
of any Settlement Claim issued pursuant to the Plan of Allocation approved in
the Final Approval of the Settlement.

 

12.                                              The
Court hereby decrees that neither the Agreement nor the Settlement nor this
Order and Final Judgment is an admission or concession by any Defendant of any
liability or wrongdoing.  This Final
Judgment is not a finding of the validity or invalidity of any of the claims
asserted or defenses raised in this Action. 
Neither the Agreement nor the Settlement nor the Order and Final
Judgment nor the settlement proceedings nor the settlement negotiations nor any
related documents shall be offered or received in evidence as an admission,
concession, presumption or inference against any Defendant in any proceeding,
other than such proceedings as may be necessary to enforce or consummate the
agreement.

 

13.                                              The
Court awards attorneys’ fees and expenses to Plaintiffs, to be paid from the
Settlement Fund pursuant to the common fund doctrine in the amount of $             ,
and awards compensation in the amount of $2,000 to each of the Class
Representatives, such amounts to be paid as set forth in the Agreement.  Except as otherwise provided herein or in the
Agreement, each party shall bear its own fees, expenses, and costs.  Class Counsel shall allocate the award of
attorneys’ fees among counsel for the Class based on their good-faith
assessment of the contribution of such counsel to the prosecution of this
Action.

 

14.                                              Without
affecting the finality of this Judgment, the Court retains jurisdiction for
purposes of implementing the Agreement and reserves the power to enter
additional orders to effectuate the fair and orderly administration and
consummation of the

 

5

 

Agreement and Settlement and reimbursement of
Administrative Expenses, as may from time to time be appropriate, and
resolution of any and all disputes arising thereunder.

 

LET
JUDGMENT BE ENTERED ACCORDINGLY.

 

SO
ORDERED this            
day of                                  ,
2003.

 

 

	
   

  	
   

  
	
   

  	
  HON.
  DAVID S. DOTY

  
	
   

  	
  UNITED
  STATES DISTRICT COURT

  
	
   

  	
  DISTRICT
  OF MINNESOTA

  

 

6

 

EXHIBIT E

 

UNITED STATES DISTRICT COURT

DISTRICT OF MINNESOTA

 

	
  In Re Xcel Energy, Inc., Securities, Derivative

  & “ERISA” Litigation

  	
   

  	
  Master File: Civil 02-2677 (DSD/FLN)

  MDL No. 1511

   

  
	
  This Document Relates To Case Nos.

  03-2218 and 03-2219, the “ERISA Actions.”

  	
   

  	
   

  

 

ESCROW AGREEMENT

ERISA LITIGATION

 

This ESCROW AGREEMENT (the “Escrow Agreement”) is entered into in
connection with a Settlement Agreement dated as of                      .

 

I.              RECITALS

 

A.            The parties to this
Escrow Agreement are as follows:

 

1.             The Representative
Plaintiffs named in the above-described action (“Action”), through Plaintiffs’
Co-Lead Counsel.

 

2.             Xcel Energy, Inc.
(“Xcel”) and the Individual Defendants, through their respective counsel
(collectively, the “Settling Defendants”).

 

3.             TCF National Bank
Minnesota, as escrow agent for the Settlement Fund (the “Escrow Agent”).

 

B.            The Representative
Plaintiffs and the Settling Defendants have entered into a Settlement Agreement
in the Action, which Settlement Agreement will provide for a dismissal with
prejudice of the Settled Claims therein in favor of the Settling Defendants in
consideration of, among other things, the payment of the amount specified in
the Settlement Agreement.

 

 

C.            The parties hereto
have entered into this Escrow Agreement in order to carry out and effectuate
the Settlement Agreement.  The applicable
provisions of the Settlement Agreement, including the definitions of the terms
used therein, are hereby incorporated by reference as though fully set forth in
this Escrow Agreement; provided, however, that the Escrow Agent shall not have
any duties or obligations except those set forth herein.  The provisions of this Escrow Agreement are
to be construed in accordance with the provisions of the Settlement Agreement.

 

D.            Now, therefore, in
consideration of the foregoing and the mutual covenants and considerations
contained herein, the undersigned parties agree as follows:

 

II.            DEPOSITS INTO
ESCROW

 

A.            Pursuant to and in accordance with the Settlement
Agreement, the sum of Eight Million Dollars ($8,000,000) will be deposited with
the Escrow Agent, by wire transfer.  The
$8,000,000 will be held by the Escrow Agent in an interest bearing account for
benefit of plaintiffs and their attorneys.

 

B.            A portion of the
Settlement Fund shall be used to pay the initial costs of administering the
settlement, including without limitation the costs of notifying members of the
Settlement Class and the taxes incurred, if any, as a result of interest
accrued on the Settlement Fund.  Monies
may be disbursed from the Settlement Fund for the purposes stated above at the
written direction of Plaintiffs’ Settlement Counsel, without need for any order
by the Court.  The Escrow Agent shall
have no liability for acting on such written instructions from Plaintiffs’
Settlement Counsel which the Escrow Agent in good faith believes to be
authentic.

 

2

 

C.            With the exception of
Paragraph B above, the Settlement Fund shall be distributed only by order of
the Court pursuant to the Settlement Agreement filed with the Court.  The Escrow Agent shall be entitled to rely,
as to distributions and withdrawals from the Settlement Fund, on any order of
the Court, notwithstanding that any such order is subsequently reversed,
vacated, remanded, modified or stayed on appeal, except that the Escrow Agent
is not required to comply with any order subsequent to the time it receives
actual notice that such order is stayed for any reason.

 

III.           INTEREST AND
INVESTMENTS

 

A.            Promptly upon receipt
of the funds referred to in Paragraph II(A) the Escrow Agent shall cause such
funds to be invested in a certificate(s) of deposit or other interest-bearing
accounts as approved by Plaintiffs’ Settlement Counsel.  The Escrow Agent may also, at the direction
of Plaintiffs’ Settlement Counsel, establish a savings account to be funded
with such sums as may be directed by Plaintiffs’ Settlement Counsel for
purposes of effectuating the provisions of the Settlement Agreement.

 

B.            All interest earned on
the Settlement Fund shall be added to the Settlement Fund and distributed
pursuant to orders of the Court.

 

3

 

IV.           ESCROW AGENT’S FEES
AND EXPENSES

 

A.            For its services in
receiving, investing and reinvesting the Settlement Fund, the Escrow Agent
shall be entitled to withdraw from the Settlement Fund a fee as follows:

 

1.             Its usual penalty, if
any, for any early withdrawal from a certificate of deposit;

 

2.             Its usual charge for
outgoing wire transfers; and

 

3.             Reimbursement for
out-of-pocket expenses that the Escrow Agent incurs in distributing the
Settlement Fund to Class Members, such as check printing fees.  It is understood that the Escrow Agent may
assist the Claims Administrator in distributing the Settlement Fund.

 

B.            The Escrow Agent shall
be compensated solely as described in Paragraph IV(A) above, and the Escrow
Agent shall not have any additional claim for compensation against the parties
hereto.

 

V.            TERMINATION OF THE
SETTLEMENT AGREEMENT

 

In the event that the Settlement Agreement is voided, terminated or
cancelled, or fails to become effective for any reason whatsoever, then within
10 days after written notice is sent by Plaintiffs’ Settlement Counsel or by
counsel for Defendant Xcel Energy, Inc. to the Escrow Agent and all other
parties, the Settlement Fund shall be refunded to the persons who made payments
into such funds, plus all interest earned thereon, less:  (1) reasonable Escrow Agent fees and
expenses as described in Paragraph IV(A) above; (2) any amounts actually
disbursed, billed or incurred for tax liabilities on the Settlement Fund or
expenses incurred in preparation of necessary forms and reports

 

4

 

with respect thereto, if any; and (3) expenditures actually
disbursed, billed or incurred for administration as set forth in the Settlement
Agreement.

 

VI.           MISCELLANEOUS
PROVISIONS

 

A.            At least quarterly,
until the Effective Date as defined in the Settlement Agreement, the Escrow
Agent shall submit to each of the undersigned counsel a statement of receipts,
disbursements and property on hand pertaining to the Settlement Fund.

 

B.            Should the Escrow
Agent receive or become aware of any demands or claims with respect to the
Settlement Fund, other than those as contemplated by the Settlement Agreement,
it shall have the right to apply to the Court, on notice to the parties hereto,
for appropriate instructions.

 

C.            The Escrow Agent’s
acceptance and administration of the Settlement Fund shall constitute the
submission of the Escrow Agent to the jurisdiction of the Court for the purpose
of carrying out this Escrow Agreement.

 

D.            This Escrow Agreement
may not be assigned by the Escrow Agent without prior written approval of all
the other parties hereto.  The parties
agree that any consented-to appointment of a new escrow agent and substitution
of a new escrow agreement shall be binding upon and inure to the benefit of the
parties hereto and their successors and assigns.

 

E.             All funds held by the
Escrow Agent shall be deemed and considered to be held in the jurisdiction of
the Court until such time as such funds shall be distributed or returned
consistent with the terms of the Settlement Agreement and this Escrow
Agreement.  The Settling Defendants and
their insurers shall have no responsibility or

 

5

 

liability for the investment, administration or distribution of such
funds or for the actions of the Escrow Agent.

 

F.             The parties hereby
agree to treat the Settlement Fund as a designated settlement fund within the
meaning of Section 468B of the Internal Revenue Code of 1986 and Section
1.468B-5(c) of the Regulations promulgated thereunder.  The parties agree to elect to treat the
Settlement Fund as a “qualified settlement fund” under Section 1.468B-2 of the
Regulations, and the Settling Defendants agree to cooperate as may be
reasonably requested by Plaintiffs’ Settlement Counsel to make such filings as
may be required to effect such election.

 

G.            This Escrow Agreement
shall be governed and interpreted according to the laws of the State of
Minnesota.

 

H.            The Escrow Agent may
terminate the Escrow Agreement at any time upon 30 days’ prior written notice
to all of the other parties, or upon such shorter notice period as may be
required by any regulatory agency or official having authority over the Escrow
Agent.  Upon the expiration of said
notice period, the Escrow Agent shall pay the balance of the Settlement Fund to
a successor escrow agent designated by mutual agreement of the other parties
hereto, or to the Court if no successor escrow agent is designated by the
parties.

 

I.              This document may be
signed in counterparts and by different parties on different counterparts with
the same effect as if the signatures thereto were on the same instrument.  This Escrow Agreement shall be effective and
binding upon all parties hereto at such time as all parties have executed a
counterpart of this Escrow Agreement.

 

6

 

IN WITNESS WHEREOF, the parties hereto have executed this Escrow
Agreement through their respective attorneys as aforesaid and the Escrow Agent
also has executed this Escrow Agreement, as of the date of execution of the
Settlement Agreement, by its signature below.

 

7

 

	
  Dated:  January      , 2005       

  	
   

  	
  Dated:  January      , 2005

  
	
   

  	
   

  	
   

  
	
  FOR THE REPRESENTATIVE

  	
   

  	
  FOR DEFENDANTS XCEL ENERGY,

  
	
  PLAINTIFFS, CLASS COUNSEL,

  	
   

  	
  INC., WAYNE BRUNETTI, EDWARD J.

  
	
  AND THE SETTLEMENT CLASS

  	
   

  	
  MCINTYRE, WILLIAM T. PIEPER, GARY

  
	
   

  	
   

  	
  R. JOHNSON AND RICHARD C. KELLY

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By: 

  	
   

  	
   

  	
  By 

  	
   

  
	
  James G. Stranch, III, No. 2542

  	
   

  	
  John M. Newman, Jr., No. 5763

  
	
  Jane B. Stranch, No. 6044

  	
   

  	
  Geoffrey J. Ritts, No. 62603

  
	
  BRANSTETTER, KILGORE, STRANCH &

  	
   

  	
  JONES DAY

  
	
  JENNINGS

  	
   

  	
  North Point

  
	
  227 Second Avenue North, 4th Floor

  	
   

  	
  901 Lakeside Avenue

  
	
  Nashville, Tennessee 37201-1631

  	
   

  	
  Cleveland, Ohio 44114

  
	
  Telephone: (615) 254-8801

  	
   

  	
  Telephone: (216) 586-3939

  
	
  Fax: (615) 250-3937

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Timothy R. Thornton, No. 109630

  
	
  Joe R. Whatley, Jr.

  	
   

  	
  BRIGGS AND MORGAN, P.A.

  
	
  Glen M. Connor

  	
   

  	
  2400 IDS Center

  
	
  WHATLEY & DRAKE, LLC

  	
   

  	
  80 South 8th Street

  
	
  2323 Second Avenue North

  	
   

  	
  Minneapolis, MN 55402

  
	
  Birmingham, AL 35202

  	
   

  	
  Telephone: (612) 334-8400

  
	
  Telephone: (205) 328-9576

  	
   

  	
   

  
	
  Fax: (205) 328-9669

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  ESCROW AGENT

  
	
   

  	
   

  	
   

  	
  TCF National Bank Minnesota

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  Its

  	
   

  
								

 

8

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