Document:

Exhibit 10.02

 

XCEL
ENERGY INC. NONQUALIFIED PENSION PLAN

 

(2009
Restatement)

 

First effective December 18, 1980

 

 

XCEL ENERGY INC. NONQUALIFIED PENSION PLAN

 

(2009
Restatement)

 

TABLE OF
CONTENTS

 

	
  SECTION 1  INTRODUCTION

  	
  1

  
	
   

  	
  1.1

  	
  Restatement
  of Plan

  	
  1

  
	
   

  	
  1.2

  	
  Definitions

  	
  2

  
	
   

  	
   

  	
  1.2.1

  	
  Actuarial Equivalent

  	
  2

  
	
   

  	
   

  	
  1.2.2

  	
  Affiliate

  	
  2

  
	
   

  	
   

  	
  1.2.3

  	
  Beneficiary

  	
  2

  
	
   

  	
   

  	
  1.2.4

  	
  Beneficiary Designation Form

  	
  3

  
	
   

  	
   

  	
  1.2.5

  	
  Committee

  	
  3

  
	
   

  	
   

  	
  1.2.6

  	
  Effective Date

  	
  3

  
	
   

  	
   

  	
  1.2.7

  	
  Employer

  	
  3

  
	
   

  	
   

  	
  1.2.8

  	
  Excess Plan Participant

  	
  3

  
	
   

  	
   

  	
  1.2.9

  	
  Participant

  	
  3

  
	
   

  	
   

  	
  1.2.10

  	
  Plan

  	
  3

  
	
   

  	
   

  	
  1.2.11

  	
  Plan Statement

  	
  3

  
	
   

  	
   

  	
  1.2.12

  	
  Plan Year

  	
  3

  
	
   

  	
   

  	
  1.2.13

  	
  Principal Sponsor

  	
  3

  
	
   

  	
   

  	
  1.2.14

  	
  Qualified Pension Plan

  	
  3

  
	
   

  	
   

  	
  1.2.15

  	
  Qualified Pension Plan Benefit

  	
  4

  
	
   

  	
   

  	
  1.2.16

  	
  Separation from Service

  	
  4

  
	
   

  	
   

  	
  1.2.17

  	
  Spouse

  	
  4

  
	
   

  	
   

  	
  1.2.18

  	
  Top Hat Participant

  	
  5

  
	
   

  	
   

  	
  1.2.19

  	
  Trust

  	
  5

  
	
   

  	
   

  	
  1.2.20

  	
  Trust Fund

  	
  5

  
	
   

  	
   

  	
  1.2.21

  	
  Trustee

  	
  5

  
	
   

  	
  1.3

  	
  Rules of
  Interpretation

  	
  5

  
	
   

  	
   

  	
   

  	
   

  
	
  SECTION 2  PARTICIPATION

  	
  7

  
	
   

  	
  2.1

  	
  Participation

  	
  7

  
	
   

  	
  2.2

  	
  Cessation
  of Eligibility

  	
  7

  
	
   

  	
   

  	
   

  	
   

  
	
  SECTION 3  BENEFIT

  	
  8

  
	
   

  	
  3.1

  	
  Nonqualified
  Pension Plan Benefit of Traditional and Pension Equity Plan Top Hat
  Participants

  	
  8

  
	
   

  	
  3.2

  	
  Nonqualified
  Pension Plan Benefit of Account Balance Plan Top Hat Participants

  	
  8

  
	
   

  	
  3.3

  	
  Nonqualified
  Pension Plan Benefit of Excess Plan Participants

  	
  8

  

 

i

 

	
   

  	
  3.4

  	
  No
  Duplication of Benefits

  	
  9

  
	
   

  	
   

  	
   

  	
   

  
	
  SECTION 4  DISTRIBUTION

  	
  10

  
	
   

  	
  4.1

  	
  Time
  and Form of Payment

  	
  10

  
	
   

  	
  4.2

  	
  Death
  or Change in Control

  	
  10

  
	
   

  	
   

  	
  4.2.1

  	
  Death

  	
  10

  
	
   

  	
   

  	
  4.2.2

  	
  Change in Control

  	
  10

  
	
   

  	
  4.3

  	
  Withholding
  of Taxes

  	
  10

  
	
   

  	
  4.4

  	
  Acceleration
  of Payments

  	
  10

  
	
   

  	
   

  	
  4.4.1

  	
  Payment of Employment Taxes or
  Income Taxes

  	
  10

  
	
   

  	
   

  	
  4.4.2

  	
  Payment upon Income Inclusion under
  Code

  	
  10

  
	
   

  	
   

  	
  4.4.3

  	
  Conflicts of Interest

  	
  11

  
	
   

  	
   

  	
  4.4.4

  	
  Termination of Plan

  	
  11

  
	
   

  	
  4.5

  	
  Delay
  of Payments

  	
  11

  
	
   

  	
  4.6

  	
  Application
  for Payment

  	
  11

  
	
   

  	
  4.7

  	
  Designation
  of Beneficiaries

  	
  11

  
	
   

  	
   

  	
  4.7.1

  	
  Right

  	
  11

  
	
   

  	
   

  	
  4.7.2

  	
  Failure of Designation

  	
  12

  
	
   

  	
   

  	
  4.7.3

  	
  Definitions

  	
  12

  
	
   

  	
   

  	
  4.7.4

  	
  Special Rules

  	
  12

  
	
   

  	
   

  	
  4.7.5

  	
  Facility

  	
  13

  
	
   

  	
  4.8

  	
  Payment
  Obligations of Participating Employers

  	
  14

  
	
   

  	
  4.9

  	
  SERP
  Participants

  	
  14

  
	
   

  	
   

  	
   

  	
   

  
	
  SECTION 5  UNFUNDED PLAN

  	
  15

  
	
   

  	
  5.1

  	
  Establishment
  of Trust

  	
  15

  
	
   

  	
  5.2

  	
  Funding
  and Location of Trust

  	
  15

  
	
   

  	
  5.3

  	
  Interrelationship
  of the Plan and the Trust

  	
  15

  
	
   

  	
  5.4

  	
  Distributions
  From the Trust

  	
  15

  
	
   

  	
  5.5

  	
  Spendthrift
  Provision

  	
  15

  
	
   

  	
   

  	
   

  	
   

  
	
  SECTION 6  AMENDMENT AND
  TERMINATION

  	
  16

  
	
   

  	
  6.1

  	
  Amendment

  	
  16

  
	
   

  	
  6.2

  	
  Termination

  	
  16

  
	
   

  	
   

  	
  6.2.1

  	
  Dissolution or Bankruptcy

  	
  16

  
	
   

  	
   

  	
  6.2.2

  	
  Discretionary Termination

  	
  16

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  SECTION 7  DETERMINATIONS —
  RULES AND REGULATIONS

  	
  17

  
	
   

  	
  7.1

  	
  Determinations

  	
  17

  
	
   

  	
  7.2

  	
  Rules and
  Regulations

  	
  17

  
	
   

  	
  7.3

  	
  Method
  of Executing Instruments

  	
  17

  

 

ii

 

	
   

  	
  7.4

  	
  Claims
  and Review Procedure

  	
  17

  
	
   

  	
   

  	
  7.4.1

  	
  Initial Claim

  	
  17

  
	
   

  	
   

  	
  7.4.2

  	
  Notice of Initial Adverse
  Determination

  	
  17

  
	
   

  	
   

  	
  7.4.3

  	
  Request for Review

  	
  18

  
	
   

  	
   

  	
  7.4.4

  	
  Claim on Review

  	
  18

  
	
   

  	
   

  	
  7.4.5

  	
  Notice of Adverse Determination for
  Claim on Review

  	
  18

  
	
   

  	
  7.5

  	
  Rules and
  Regulations

  	
  19

  
	
   

  	
   

  	
  7.5.1

  	
  Adoption of Rules

  	
  19

  
	
   

  	
   

  	
  7.5.2

  	
  Specific Rules

  	
  19

  
	
   

  	
  7.6

  	
  Deadline
  to File Claim

  	
  20

  
	
   

  	
  7.7

  	
  Exhaustion
  of Administrative Remedies

  	
  20

  
	
   

  	
  7.8

  	
  Deadline
  to File Legal Action

  	
  20

  
	
   

  	
  7.9

  	
  Knowledge
  of Fact by Participant Imputed to Beneficiary

  	
  21

  
	
   

  	
  7.10

  	
  Information
  Furnished by Participants

  	
  21

  
	
   

  	
  7.11

  	
  Overpayments

  	
  21

  
	
   

  	
   

  	
   

  	
   

  
	
  SECTION 8  PLAN
  ADMINISTRATION

  	
  22

  
	
   

  	
  8.1

  	
  Principal
  Sponsor

  	
  22

  
	
   

  	
   

  	
  8.1.1

  	
  Officers

  	
  22

  
	
   

  	
   

  	
  8.1.2

  	
  Chief Executive Officer

  	
  22

  
	
   

  	
  8.2

  	
  Committee

  	
  22

  
	
   

  	
   

  	
  8.2.1

  	
  Appointment and Removal

  	
  22

  
	
   

  	
   

  	
  8.2.2

  	
  Automatic Removal

  	
  22

  
	
   

  	
   

  	
  8.2.3

  	
  Authority

  	
  22

  
	
   

  	
   

  	
  8.2.4

  	
  Majority Decisions

  	
  23

  
	
   

  	
  8.3

  	
  Limitation
  on Authority

  	
  23

  
	
   

  	
   

  	
  8.3.1

  	
  Generally

  	
  23

  
	
   

  	
   

  	
  8.3.2

  	
  Trustee

  	
  23

  
	
   

  	
  8.4

  	
  Conflict
  of Interest

  	
  24

  
	
   

  	
  8.5

  	
  Dual
  Capacity

  	
  24

  
	
   

  	
  8.6

  	
  Administrator

  	
  24

  
	
   

  	
  8.7

  	
  Service
  of Process

  	
  24

  
	
   

  	
  8.8

  	
  Administrative
  Expenses

  	
  24

  
	
   

  	
   

  	
   

  	
   

  
	
  SECTION 9  DISCLAIMERS

  	
  25

  
	
   

  	
  9.1

  	
  Term
  of Employment

  	
  25

  
	
   

  	
  9.2

  	
  Source
  of Payment

  	
  25

  
	
   

  	
  9.3

  	
  Delegation

  	
  25

  
	
   

  	
   

  	
   

  	
   

  
	
  ADDENDUM A  Section 415
  Excess Benefit Plan Benefit

  	
  26

  

 

iii

 

XCEL ENERGY INC. NONQUALIFIED PENSION PLAN

 

(2009
Restatement)

 

SECTION 1

 

INTRODUCTION

 

1.1                               Restatement of Plan.  Effective January 1, 1950, Xcel Energy
Inc. (formerly Northern States Power Company) established the NSP Pension
Plan.  Since its establishment, the NSP
Pension Plan has been restated several times. 
The NSP Pension Plan was most recently restated in its entirety as of January 1,
2000, and was renamed as the “Xcel Energy Pension Plan” as of August 10,
2000 and was most recently restated as of January 1, 2002.

 

As of December 18,
1980, Northern States Power Company established the NSP Deferred Compensation
Plan.  The NSP Deferred Compensation Plan
was restated in its entirety as of January 1, 1992 (the “NSP 1992 Plan”).  The purposes of the NSP 1992 Plan were to
provide additional retirement benefits to a select group of management and
highly compensated employees by allowing participants to elect to defer current
income by making pretax contributions to the plan.  In addition, section 9(F) of the NSP
1992 Plan provided certain employees an additional benefit intended to restore
to them promised benefits under the NSP Pension Plan that could not be provided
due to the limitations imposed by Internal Revenue Code (“Code”) section
401(a)(17).

 

Effective
as of November 1, 1988, Northern States Power Company established the NSP
Excess Benefit Plan.  The NSP Excess
Benefit Plan was renamed as the “Xcel Energy Excess Benefit Plan” as of August 10,
2000.  One of the purposes of the Xcel
Energy Excess Benefit Plan was to provide eligible employees with those
benefits that they would have received under the Xcel Energy Pension Plan
(formerly, the “Northern States Power Company Pension Plan”), but for the
limitations of Code section 415 as permitted by section 3(36) of the Employee
Retirement Income Security Act (“ERISA”).

 

As of January 1,
2000, Northern States Power Company adopted the NSP Nonqualified Deferred
Compensation Plan (2000 Statement).

 

As of August 2000,
Northern States Power Company and New Century Energies, Inc. (“NCE”)
merged to become Xcel Energy Inc. (the “Principal Sponsor”).

 

Following
that merger, the NSP Nonqualified Deferred Compensation Plan (2000 Statement)
was renamed the Xcel Energy Inc. Nonqualified Deferred Compensation Plan.  In 2002, the Xcel Energy Inc. Nonqualified
Deferred Compensation Plan was restated as the “Xcel Energy Inc. Nonqualified
Deferred Compensation Plan (2002 Restatement)” and all benefits previously
payable to participants under the NCE Nonqualified Plans and the benefits
previously payable to Participants under section 8 of the NSP 1992 Plan (the “Regular
Deferred Compensation Account”), including amounts credited to such account
pursuant to Sections 9(B), 9(D) and 9(E) of the NSP 1992 Plan (a
participant’s “ESOP make-up”, “FINC account” and “grandfathered 

 

1

 

incentive
benefit” respectively, if any), were transferred to and became payable to
participants pursuant to the terms of the Xcel Energy Inc. Nonqualified
Deferred Compensation Plan (2002 Restatement).

 

At the
same time, a portion of the NSP 1992 Plan was restated to become the Xcel
Energy Inc. Nonqualified Pension Plan (2002 Restatement).  The purpose of the 2002 Restatement was to
provide certain of the benefits promised to a select group of management and
highly compensated participants under the Xcel Energy Pension Plan and the Xcel
Energy Inc. Non-bargaining Pension Plan (South) (2002 Restatement) without
regard to the limitations imposed by Code section 401(a)(17), subject to the
limitations provided in such restatement, but without duplication of
benefits.  The benefits provided under
such restatement (and this 2009 Restatement thereof) are to be provided in full
satisfaction of any similar benefits provided to participants under section 9(F) of
the NSP 1992 Plan, Article III of the Xcel Energy Excess Benefit Plan, and
any similar nonqualified supplemental retirement plan of the former NCE or its
affiliates (said plans being collectively referred to herein as the “Former
Nonqualified Plans”) other than benefits provided a select group of management
or highly compensated employees pursuant to the terms of the New Century Energies Supplemental Executive Retirement
Plan (as adopted effective January 1, 1998) and as renamed the “Xcel
Energy Supplemental Executive Retirement Plan” as of August 10, 2000.

 

In
addition, Addendum A of the 2002 Restatement was and is intended to be an “excess
benefit plan” maintained by the Principal Sponsor solely for the purpose of
providing benefits for certain employees in excess of the limitations on
benefits imposed by Code section 415. 
Such Addendum is intended to be considered a “separable part” of this
Plan and is intended to provide certain employees with the benefits previously
provided under Article III of the
Xcel Energy Excess Benefit Plan that provided supplemental pension benefits.

 

Effective
January 1, 2009, this Plan is again amended and restated and to cause the
Plan to be compliant with Section 409A of the Internal Revenue Code of
1986, as amended, and the guidance issued thereunder. During the period from
and after January 1, 2005 through the effective date of this restatement,
the Plan has been operated in good faith compliance with IRS Notice 2005-1,
proposed and final regulations under Code Section 409A and other
applicable guidance.

 

1.2                               Definitions.  When the following terms are used herein with
initial capital letters, they shall have the following meanings:

 

1.2.1                      Actuarial Equivalent – a benefit of
equivalent value computed on the basis of the factors and assumptions of the
Qualified Pension Plan in which the Participant participated at the time of his
or her Separation from Service.

 

1.2.2                      Affiliate – A business entity that
is at least 50% owned or affiliated in ownership with the Principal Sponsor, as
defined in regulations issued under Section 409A of the Code.

 

1.2.3                      Beneficiary – as to a Top Hat
Participant, a person designated by a Top Hat Participant (or automatically by
operation of this Plan Statement) to receive all or a part of the Top Hat
Participant’s benefit in the event of the Top Hat Participant’s death prior to
full distribution thereof.  As to an
Excess Plan Participant, a person designated by the Excess Plan Participant to
receive all or part of the Excess Plan Participant’s benefit under the
Qualified Plan in which the Excess Plan Participant participated or is such
Excess Plan 

 

2

 

Participant’s Beneficiary as automatically determined
by operation of such Qualified Plan.  A
person shall not be considered a Beneficiary until the death of the
Participant.

 

1.2.4                      Beneficiary Designation Form –
the form prescribed by the Committee upon which a Top Hat Participant may
designate a Beneficiary.

 

1.2.5                      Committee – a Committee appointed
pursuant to Section 8.

 

1.2.6                      Effective Date – the original
effective date of the Plan was December 18, 1980.  The effective date of this restatement is January 1,
2009, except as otherwise provided herein.

 

1.2.7                      Employer – the Principal Sponsor and
any business entity that is an Affiliate of the Principal Sponsor as employing
employees that are eligible participate in this Plan or for whom benefits are
provided under Addendum A hereof.

 

1.2.8                      Excess Plan Participant - A Participant whose benefit under this Plan is determined
solely by reference to Section 3.3.

 

1.2.9                      Participant – an employee of the
Employer who is eligible to participate in this Plan as a Top Hat Participant
because his benefit under the Qualified Pension Plan is limited by Code section
401(a)(17), or who is an employee whose benefit under the Qualified Pension
Plan is limited solely by application of Code section 415 and whose benefit
under this Plan is determined solely by reference to Section 3.3 hereof
(an “Excess Plan Participant”).  No
employee is presumed or automatically eligible to participate in this Plan as a
Top Hat Participant.  An employee who has
become a Participant shall be considered to continue as a Participant in the
Plan until the date of the Participant’s death or, if earlier, the date when
the Participant is no longer employed by an Employer or an Affiliate and upon
which the Participant (or Beneficiary of a surviving Participant) no longer has
any benefit under the Plan.  When used
herein, the term “Participant” shall refer collectively to Excess Plan
Participants and Top Hat Participants, unless the context clearly requires
otherwise.

 

1.2.10                Plan
– the nonqualified defined benefit pension program maintained by the Principal
Sponsor established for the benefit of Participants eligible to participate
therein, as set forth in this Plan Statement. 
The Plan shall be referred to as the “Xcel Energy Inc. Nonqualified
Pension Plan (2009 Restatement).

 

1.2.11                Plan
Statement – this document entitled “XCEL ENERGY INC.
NONQUALIFIED PENSION PLAN (2009 Restatement).

 

1.2.12                Plan
Year – the calendar year.

 

1.2.13                Principal
Sponsor – Xcel Energy Inc., a Minnesota corporation.

 

1.2.14                Qualified
Pension Plan – the Xcel Energy Inc. Pension Plan (North) and the Xcel Energy Inc. Non-bargaining
Pension Plan (South), and any amendments, restatements, or successor plans
thereto.

 

3

 

1.2.15                Qualified
Pension Plan Benefit – a Participant’s benefit under a
Qualified Pension Plan applicable to him or her, but not including any
Retirement Spending Account benefit or any Social Security Supplement as those
terms are defined in the Qualified Pension Plan.

 

1.2.16                Separation
from Service – means:

 

(a)                                 An Employee’s death, retirement or other
termination of employment, from the Employer and all Affiliates.  A Separation from Service shall not be
considered to have occurred and the Participant’s employment relationship is
treated as continuing while the Participant is on military leave, sick leave,
or other bona fide leave of absence if such period of leave does not exceed 6
months or, if longer, so long as the Participant’s right to reemployment is
provided by statute or by contract.  If
the period of leave exceeds 6 months and such reemployment rights are not
provided, then the Participant is deemed to have a termination of employment as
of the first date immediately following such 6-month period.

 

(b)                                A termination of employment will occur as of
a specified date if the facts and circumstances indicate that (1) the
Employer and the Participant reasonably anticipated that no further services
would be performed after that date or (2) the level of bona fide services
the Participant would perform after that date (whether as an employee or an
independent contractor) would permanently decrease to 20% or less of the
average level of bona fide services performed (whether as an employee or an
independent contractor) over the immediately preceding 36-month period (or the
full period of such services, if less than 36 months).

 

(c)                                 A Participant is presumed to (1) have
incurred a termination of employment from the Employer and all Affiliates where
the level of bona fide services the Participant performs after such date
decreases to a level equal to 20% or less of the average level of services
performed by the Participant over the immediately preceding 36-month period (on
the full period of such services, if less than 36 months); and (2) not to
have incurred a termination of employment from the Employer and all Affiliates
where the level of bona fide services the Participant performs after such date
continues at a level equal to 50% or more of the average level of services
performed by the Participant over the immediately preceding 36-month period (or
the full period of such services, if less than 36 months).  These presumptions can be rebutted by showing
that the Employer and the Participant reasonably anticipated that there either
would or would not have been a Separation from Service in accordance with
paragraph (b).

 

(d)                                In the case of a Participant who is an
independent contractor, Separation from Service means the expiration of the
contract (or, as applicable, all contracts) under which services are performed
for the Employer or any Affiliate if the expiration constitutes a good faith
and complete termination of the contractual relationship.

 

1.2.17                Spouse
– the person to whom a Participant is legally married on the earlier of:

 

(a)                                 the
date as of which the Participant’s benefit payments are scheduled to begin; or

 

(b)                                the
date of the Participant’s death;

 

4

 

and to
whom the Participant has been legally married for at least 12 consecutive
months on the date of the Participant’s death.

 

1.2.18                Top
Hat Participant – A Participant who is a member of a
select group of management or highly compensated employees whose benefit is
determined under the provisions of Section 3.1 or Section 3.2.

 

1.2.19                Trust
– the Trust agreement for the Plan, if any, established by the Principal
Sponsor pursuant to Section 5.

 

1.2.20                Trust
Fund – the fund or funds, if any, established by the
Principal Sponsor pursuant to Section 5.

 

1.2.21                Trustee
– that person or entity, if any, which shall have been appointed by the
Principal Sponsor to hold the assets of any Trust created pursuant to Section 5.

 

1.3                               Rules of Interpretation.  The following rules shall apply for
purposes of interpreting this Plan.

 

1.3.1                      An individual
shall be considered to have attained a given age on such individual’s birthday
for that age (and not on the day before). 
Individuals born on February 29 in a leap year shall be considered
to have their birthdays on February 28 in each year that is not a leap
year.

 

1.3.2                      Whenever
appropriate, words used herein in the singular may be read in the plural, or
words used herein in the plural may be read in the singular; the masculine may
include the feminine; and the words “hereof,” “herein” or “hereunder” or other
similar compounds of the word “here” shall mean and refer to this entire Plan
document and not to any particular paragraph or section of this Plan document
unless the context clearly indicates to the contrary.

 

1.3.3                      If, under
the rules of this Plan, an election, form or other document (whether in
written or electronic form) must be filed with or received by the Committee, it
must be actually received by the Committee or its agent to be effective.  The determination of whether or when an
election, form or other document has been received by the Committee shall be
made by the Committee on the basis of what documents are acknowledged by the
Committee to be in its actual possession without regard to any “mailbox rule”
or similar rule of evidence.  The
absence of a document in the Committee’s records and files shall be conclusive
and binding proof that the document was not received.

 

1.3.4                      The titles
given to the various sections of this Plan document are inserted for
convenience of reference only and are not part of this Plan document, and they
shall not be considered in determining the purpose, meaning or intent of any
provision hereof.

 

1.3.5                      This Plan
shall be construed and this Plan shall be administered to create an unfunded
plan providing deferred compensation to a select group of management or highly
compensated employees so that it is exempt from the requirements of Parts 2, 3
and 4 of Title I of the Employee Retirement Income Security Act of 1974 (ERISA)
and qualifies for a form of simplified, alternative compliance with the
reporting and disclosure requirements of Part 1 of Title I of ERISA.  It is further intended that this Plan shall
satisfy the conditions for a deferral of income under the Code including but
not limited 

 

5

 

to the provisions of Code Section 409A and in a
manner that will not cause a Participant to be liable for the payment of
interest and tax penalties which may be imposed under Code Section 409A.  If any provision of this Plan may be
susceptible to more than one interpretation or to an interpretation that may
result in the Plan’s failing to satisfy Code Section 409A, such provision
shall be applied as construed in a manner that is consistent with the
provisions of such Code section.

 

1.3.6                      This
document has been executed and delivered in the State of Minnesota and has been
drawn in conformity to the laws of that State and shall, subject to the
foregoing, be construed and enforced in accordance with the laws of the State
of Minnesota.

 

6

 

SECTION 2

 

PARTICIPATION

 

2.1                                Participation. An employee (other than employee whose employment
terms are subject to a collective bargaining agreement) of an Employer who is a
member of a select group of management or highly compensated employees shall
become a Participant in this Plan if his or her benefit under the applicable
Qualified Pension Plan is limited by Code Section 401(a)(17) or whose
benefit under the Plan is determined solely be reference to Section 3.3
hereof.

 

2.2                                Cessation of Eligibility.  If, during a Plan
Year, a Participant ceases to satisfy the criteria that qualified him as a
Participant (including, for this purpose, the requirement that such individual
be a member of a select group of management or
highly compensated employees (as that expression is used in ERISA)), his
accruals under the Plan shall continue for the rest of such Plan Year and shall
then cease.  Such employee shall,
however, remain a Participant in the Plan until his benefit (if any) is
distributed from the Plan.

 

7

 

SECTION 3

 

BENEFIT

 

3.1                                Nonqualified Pension Plan Benefit of Traditional and Pension
Equity Plan Top Hat Participants.  The benefit of a Top Hat
Participant whose Qualified Pension Plan Benefit is determined under either a
traditional benefit formula or a pension equity benefit formula shall, at such
Top Hat Participant’s Separation from Service, be equal to (a) - (b) multiplied
by (c) as follows:

 

(a)                                  the
Top Hat Participant’s Qualified Pension Plan Benefit determined without regard
to the limitations imposed by Code sections 401(a)(17) and 415, and determined
as if such Top Hat Participant’s compensation under the Qualified Pension Plan
had, for Plan Years prior to January 1, 2002, included compensation that the
Top Hat Participant deferred to a nonqualified deferred compensation plan of
the Employer,

 

minus

 

(b)                                 the
Top Hat Participant’s actual Qualified Pension Plan Benefit, and

 

multiplied
by

 

(c)                                  a
percentage equal to that percentage which the Top Hat Participant is vested in
his or her benefit under a Qualified Pension Plan at the time of his or her
Separation from Service.

 

3.2                                Nonqualified Pension Plan Benefit of Account Balance Plan Top
Hat Participants. A Top Hat
Participant whose Qualified Pension Plan benefit is determined by reference to
the account balance formula thereof shall, effective for Plan Years beginning
on and after January 1, 2002, earn a benefit under this Plan equal to (a) —
(b) multiplied by (c), as follows:

 

(a)                                  The
account balance credits (and interest thereon) that would have been credited to
the account of a Top Hat Participant under the Qualified Pension Plan if the
limitations imposed by Code sections 401(a)(17) and 415 had been disregarded,

 

minus

 

(b)                                 The
account balance credits (and interest thereon) actually credited to such Top
Hat Participant’s account under the Qualified Pension Plan for such period, and

 

multiplied
by

 

(c)                                  A
percentage equal to that percentage which the Top Hat Participant is vested in
his or her benefit under a Qualified Pension Plan at the time of his or her
Separation from Service.

 

3.3                                Nonqualified Pension Plan Benefit of Excess Plan Participants.  The Nonqualified Pension Plan benefits of an
Excess Plan Participant shall be determined as provided in Addendum A.

 

8

 

3.4                                No Duplication of Benefits.  It is the intent that this Plan shall
supplement, but not duplicate, the benefits provided Participants under the
Qualified Pension Plan.  This Plan shall
be interpreted consistently with those intentions.

 

9

 

SECTION 4

 

DISTRIBUTION

 

4.1                                Time and Form of Payment.  A Participant’s benefit shall be paid in a
single lump sum cash payment as of the first day of the seventh month following
the Participant’s Separation from Service. Notwithstanding the foregoing, the
benefit of a Top Hat Participant whose Qualified Pension Plan Benefit is
determined by reference to the account balance formula under the Qualified
Pension Plan shall be paid in a single lump sum cash payment as of the first
day of the seventh month following the later of the Participant’s Separation
from Service or attainment of age 55.

 

4.2                                Death or Change in Control.  Notwithstanding the foregoing, a Participant’s
benefit shall be paid before the date specified in Section 4.1, above,
pursuant to the following rules:

 

4.2.1                      Death.  Payment of the
Participant’s benefit shall be made to the Participant’s Beneficiary in a
single cash lump sum within the 90-day period following the Participant’s
death.

 

4.2.2                      Change in Control.  Each Participant’s
benefit shall be paid to him in a single cash lump sum within 90 days of the
occurrence of a change in ownership or control of an Employer, or a change in
the ownership of a substantial portion of the assets of an Employer, as such
terms are defined and in a manner consistent with the provisions of Code Section 409A
and Treasury Regulation Section 1.409A-3(i)(5).

 

4.3                                Withholding of Taxes.  The benefits payable under this Plan shall be
subject to the deduction of any federal, state, or local income taxes, Federal
Insurance Contributions Act (FICA), FUTA or other taxes that are required to be
withheld from such payments by applicable laws and regulations.

 

4.4                                Acceleration of Payments.  Notwithstanding the preceding provisions of
this Section 4, the Committee, in its sole discretion, may decide to
accelerate payments under the Plan prior to the times set forth above in
accordance with Treas. Reg. Section 1.409A-3(j)(4).  If payments are made to or on behalf of a
Participant in accordance with this Section 4.4, then any payments that
would otherwise be made under this Plan at any later date shall be reduced by
the payments so made.  Payments that may
be made in accordance with this Section shall include, but shall not be
limited to, payments made under the following circumstances:

 

4.4.1                      Payment of Employment Taxes or Income Taxes.  Payments may be made at the time required by
applicable law, for the payment or withholding of FICA tax imposed under Code Section 3101,
Section 3121(a) and Section 3121(v)(2) or federal, state,
local or foreign tax obligations arising from participation in the Plan
provided distributions are limited to the amounts of such tax obligations.

 

4.4.2                      Payment upon Income Inclusion under Code Section 409A.  If this Plan fails to meet the requirements
of Code Section 409A, the amount of a Participant’s benefit that is
required to be included in the income of the affected Participant due to such
failure shall be paid to such Participant in a single lump sum.

 

10

 

4.4.3                      Conflicts of Interest.  Each Participant’s benefit shall be paid at
such time and to the extent permitted by Treas. Reg. Section 1.409A-3(j)(4)(iii) in
connection with ethics agreements with the Federal government and applicable
Federal, state, local or foreign ethics or conflicts of interest laws.

 

4.4.4                      Termination of Plan.  Each Participant’s benefit shall be paid to
him upon termination of the Plan to the extent provided in Section 6.

 

4.5                                Delay of Payments.  Notwithstanding the foregoing provisions of
this Section 5, the payment of any benefit under this Plan may be
postponed to the extent permitted under the provisions of Code Section 409A
and related regulations, but if such payment is described in (a) or (b),
below, then all payments to similarly situated Participants shall be treated in
the same manner.  The types of delays
that are permitted include, but are not limited to, the following:

 

(a)                                  If
the Employer reasonably determines that if a payment were made as scheduled the
Employer’s deduction with respect to such payment would not be permitted under
Code §162(m), then the Employer may unilaterally delay the payment of such
benefit provided such payment is made either during the first calendar year in
which the Employer reasonably anticipates that such deduction will not be
barred by application of Code §162(m), or, if later, during the period
beginning on the date of the Participant’s Separation from Service and ending
on the later of the last day of the calendar in year in which such Separation
from Service occurred or the 15th day of the third month following the
Participant’s Separation from Service.

 

(b)                                 If
the Employer reasonably anticipates that the payment of a benefit would violate
Federal securities laws or other applicable law, the Employer may cause the
Plan to delay payment of a Participant’s benefit until such time as the
Employer reasonably anticipates that the payment of such benefit will not cause
such violation.

 

(c)                                  A
payment may be delayed to the extent that the Committee reasonably determines
that payment will jeopardize the Employer’s ability to continue as a going
concern, provided that payment is made during the first calendar year in the
payment would not have such effect;

 

(d)                                 A
payment may be delayed to the extent that the Committee reasonably determines
that due to circumstances beyond the control of the Participant the calculation
of the amount of the Participant’s payment is not administratively practicable,
provided that payment is made during the first calendar year in which the
calculation of the payment amount is administratively practicable.

 

4.6                                Application for Payment.  The Administrator may prescribe from time to
time the information to be submitted by a Participant or Beneficiary of a
deceased Participant in connection with commencing a distribution from the
Plan.

 

4.7                                Designation of Beneficiaries.

 

4.7.1                      Right  to Designate.  Each Top Hat Participant may designate upon a
Beneficiary Designation Form furnished by and filed with the Committee,
one or more primary Beneficiaries or alternative Beneficiaries to receive all
or a specified part of such Top Hat Participant’s benefit in the event of such
Top Hat Participant’s death.  The Top Hat

 

11

 

Participant may change or revoke any such designation
from time to time without notice to or consent from any Beneficiary.  No such designation, change or revocation
shall be effective unless executed by the Top Hat Participant and received by
the Committee during the Top Hat Participant’s lifetime.

 

4.7.2                      Failure of Designation.  If a Top Hat Participant:

 

(a)                                  fails
to designate a Beneficiary,

 

(b)                                 designates
a Beneficiary and thereafter revokes such designation without naming another
Beneficiary, or

 

(c)                                  designates
one or more Beneficiaries and all such Beneficiaries so designated fail to
survive the Top Hat Participant,

 

such
Top Hat Participant’s benefit, or the part thereof as to which such Top Hat
Participant’s designation fails, as the case may be, shall be payable to the
first class of the following classes of automatic Beneficiaries with a member
surviving the Top Hat Participant and (except in the case of surviving issue)
in equal shares if there is more than one member in such class surviving the
Top Hat Participant:

 

Top
Hat Participant’s surviving Spouse

 

Top
Hat Participant’s surviving issue per stirpes and not per capita

 

Top
Hat Participant’s surviving parents

 

Top Hat
Participant’s surviving brothers and sisters

 

Representative
of Top Hat Participant’s estate

 

4.7.3                      Definitions.  When used herein and, unless the Top Hat
Participant has otherwise specified in the Top Hat Participant’s Beneficiary
designation, when used in a Beneficiary designation, “issue” means all persons
who are lineal descendants of the person whose issue are referred to, including
legally adopted descendants and their descendants but not including
illegitimate descendants and their descendants; “child” means an issue of the
first generation; “per stirpes” means in equal shares among living children of
the person whose issue are referred to and the issue (taken collectively) of
each deceased child of such person, with such issue taking by right of representation
of such deceased child; and “survive” and “surviving” mean living after the
death of the Top Hat Participant.

 

4.7.4                      Special Rules.  Unless the Top Hat Participant has otherwise
specified in his or her Beneficiary designation, the following rules shall
apply:

 

(a)                                  If
there is not sufficient evidence that a Beneficiary was living at the time of
the death of the Participant, it shall be deemed that the Beneficiary was not
living at the time of the death of the Top Hat Participant.

 

12

 

(b)                                 The
automatic Beneficiaries specified in Section 4.7.2 and the Beneficiaries
designated by the Top Hat Participant shall become fixed at the time of the Top
Hat Participant’s death so that, if a Beneficiary survives the Top Hat
Participant but dies before the receipt of all payments due such Beneficiary
hereunder, such remaining payments shall be payable to the representative of
such Beneficiary’s estate.

 

(c)                                  If
the Top Hat Participant designates as a Beneficiary the person who is the Top
Hat Participant’s Spouse on the date of the designation, either by name or by
relationship, or both, the dissolution, annulment or other legal termination of
the marriage between the Top Hat Participant and such person shall automatically
revoke such designation.  (The foregoing
shall not prevent the Top Hat Participant from designating a former Spouse as a
Beneficiary on a form executed by the Top Hat Participant and received by the
Committee after the date of the legal termination of the marriage between the
Top Hat Participant and such former Spouse, and during the Top Hat Participant’s
lifetime.)

 

(d)                                 Any
designation of a non-spouse Beneficiary by name that is accompanied by a
description of relationship to the Top Hat Participant shall be given effect
without regard to whether the relationship to the Participant exists either
then or at the Top Hat Participant’s death.

 

(e)                                  Any
designation of a Beneficiary only by statement of relationship to the Top Hat
Participant shall be effective only to designate the person or persons standing
in such relationship to the Top Hat Participant at the Top Hat Participant’s
death.

 

A
Beneficiary designation is permanently void if it either is executed or is
filed by a Top Hat Participant who, at the time of such execution or filing, is
then a minor under the law of the state of the Top Hat Participant’s legal
residence.  The Committee shall be the
sole judge of the content, interpretation and validity of a purported
Beneficiary designation.

 

4.7.5                      Facility  of
Payment.  In
case of the legal disability (e.g., minority or mental incompetency), of a Top
Hat Participant or Beneficiary entitled to receive any distribution under the
Plan, payment shall be made, if the Committee shall be advised of the existence
of such condition:

 

(a)                                  to
the duly appointed guardian, conservator or other legal representative of such
Top Hat Participant or Beneficiary, or

 

(b)                                 to
a person or institution entrusted with the care or maintenance of the legally
disabled Top Hat Participant or Beneficiary, provided such person or
institution has satisfied the Committee that the payment will be used for the
best interest and assist in the care of such Top Hat Participant or
Beneficiary, and provided further, that no prior claim for said payment has
been made by a duly appointed guardian, conservator or other legal
representative of such Top Hat Participant or Beneficiary.

 

Any
payment made in accordance with the foregoing provisions of this section shall
constitute a complete discharge of any liability or obligation of the Committee
therefore.

 

13

 

4.8                                Payment Obligations of Participating Employers.  Payment of distributions from this Plan shall
be made only by the Employer which last employed the Participant before
payments commence, provided, however, that each other Employer shall reimburse
the paying Employer for benefits accrued by the Participant during the period
(if any) that the Participant was employed by them.

 

4.9                                SERP Participants.  Notwithstanding anything else in this Section 4
to the contrary, if as of December 31, 2008 an individual is both a
Participant in this Plan and a participant in the Xcel Energy Supplemental
Executive Retirement Plan (SERP), then the Participant’s benefit under this
Plan shall be paid in the time and form of his or her benefit under the SERP.

 

14

 

SECTION 5

 

UNFUNDED PLAN

 

5.1                                Establishment of Trust. The
obligation of the Employer to make payments under this Plan constitutes only
the unsecured (but legally enforceable) promise of the Employer to make such
payments.  A Participant shall have no
lien, prior claim or other security interest in any property of the Employer.  The Employer is not required to establish or
maintain any fund, trust or account (other than a bookkeeping account or
reserve) for the purpose of funding or paying the benefits promised under this
Plan.  If such a fund is established, the
property therein shall remain the sole and exclusive property of the Employer.

 

5.2                                Funding and Location of Trust.  Any trust established by the Employer for
purposes of paying benefits under this Plan, and the taxation of any assets
held in such trust on behalf of Participants, shall be subject to the
requirements of Code §409A, including (a) the rules pertaining to
offshore funding set forth in Code §409A(b)(1), (b) the transfers of
assets for the benefit of covered employees (as defined in Code
§409A(b)(3)(d)(ii)) when an defined benefit plan of the Employer defined
benefit pension plan is in a restricted period, and (c) the restriction of
assets in connection with a change in the Employer’s financial health under
Code §409A(b)(2).

 

5.3                                Interrelationship of the Plan and the Trust.  The provisions of the Plan shall govern the
rights of a Participant or Beneficiary to receive distributions pursuant to the
Plan.  The provisions of the Trust (if
any) shall govern the rights of the Employer, the Participants, and the creditors
of the Employer relative to any property of the Employer set aside
therein.  The Employer shall at all times
prior to the Plan’s termination remain liable to carry out its responsibilities
under the Plan.

 

5.4                                Distributions From the Trust.  The Employers’ obligations under the Plan may
be satisfied with assets of the Trust distributed pursuant to the terms
thereof, and any such distribution shall reduce the Employers’ obligations
under the Plan.

 

5.5                                Spendthrift Provision.  No Participant or Beneficiary shall have any
interest in any account or Trust which can be transferred nor shall any
Participant or Beneficiary have any power to anticipate, alienate, dispose of,
pledge or encumber the same while in the possession or control of the Employer
or the Trustee, nor shall any benefit or the Trust be subject to attachment,
garnishment, execution following judgment or other legal process while in the
possession or control of the Employer or the Trustee.

 

This section shall not
prevent the Employer from exercising, in its discretion, any of the applicable
powers and options granted to it upon the occurrence of a Participant’s
Retirement, as such powers may be conferred upon it by any applicable provision
hereof.

 

15

 

SECTION 6

 

AMENDMENT AND TERMINATION

 

6.1                                Amendment.  The Plan may be amended from time to time in
any respect whatever by the Employer and by the Committee to the extent
consistent with its delegated authority. 
Any such amendment may be retroactive, prospective or both.  No such amendment of the Plan document or
termination of the Plan, however, shall reduce a Participant’s benefit earned
as of the date of such amendment unless the Participant so affected consents in
writing to the amendment or such amendment is deemed necessary by the Employer
to affect the intended purposes of this Plan and/or comply with applicable law.
Any such amendment shall be communicated to the Employers participating in the
Plan.  Each Employer reserves the right
to withdraw from participation in the Plan, but until such withdrawal occurs,
they shall be bound by the Plan as originally established and as amended from
time to time.

 

6.2                                Termination.  The Employer reserves the right to
discontinue benefit accruals at any time. 
The Employer also reserves the right cause an acceleration of the time
and form of a Plan payment where the acceleration of such payment is made in
accordance with one of the following provisions:

 

6.2.1                      Dissolution or Bankruptcy.  At the discretion of the Employer within 12
months of a corporate dissolution taxed under Code Section 331 or with the
approval of a bankruptcy court pursuant to 11 U.S.C. Section 503(b)(1)(A),
provided that Plan benefits are included in the Participants’ gross incomes in
the latest of the following years (or, if earlier, the Participants’ respective
tax year in which the benefits are actually or constructively received): (i) the
first calendar year in which the Plan termination and liquidation occurs; (ii) the
calendar year in which the amount is no longer subject to a substantial risk of
forfeiture; or (iii) the first calendar year in which payment is
administratively practicable.

 

6.2.2                      Discretionary Termination.  A termination of the Plan that does not occur
proximate to a downturn in the financial health of the Employer; provided that (a) all
other arrangements sponsored by the Employer that would be aggregated with this
arrangement under Treas. Reg. Section 1.409A-1(c) are also terminated
(such aggregation being determined by assuming that all Participants have a
benefit under any such other arrangement); (b) no payments in liquidation
of the Plan, other than payments that would have been made under this Plan had
the termination not occurred, are made from the Plan within 12 months of the
date the Employer has taken all necessary action to irrevocably terminate and
liquidate this Plan (the “Termination Date”) ; (c) all benefits are fully
distributed within 24 months of the Termination Date; and (d) the Employer
does not adopt a new arrangement that would be aggregated under Treas. Reg. Section 1.409A-1(c) with
this Plan (such aggregation being determined by assuming that all Participants
will have a benefit under any new arrangement) within 3 years following the
Termination Date.

 

16

 

SECTION 7

 

DETERMINATIONS — RULES AND REGULATIONS

 

7.1                                Determinations.  The Committee shall make such determinations
as may be required from time to time in the administration of the Plan. The
Committee shall have the sole discretion, authority and responsibility to
interpret and construe this Plan Statement and to determine all factual and
legal questions under the Plan, including but not limited to the entitlement of
any persons to benefits and the amounts of their benefits. Its discretionary
authority shall include all matters arising under the Plan including, but not
limited to, the determination of whether a domestic relations order is
enforceable against the Plan and the interpretation and administration of a
qualified domestic relations order. The Actuary, the Trustee and other
interested parties may act and rely upon all information reported to them
hereunder and need not inquire into the accuracy thereof nor be charged with
any notice to the contrary.

 

7.2                                Rules and Regulations.  Any rule not in conflict or at variance
with the provisions hereof may be adopted by the Principal Sponsor.

 

7.3                                Method of Executing Instruments.  Information to be supplied or written notices
to be made or consents to be given by the Principal Sponsor pursuant to any
provision of this Plan Statement may be signed in the name of the Principal
Sponsor by any officer who has been authorized to make such certification or to
give such notices or consents.

 

7.4                                Claims and Review Procedure.  Until modified by the Committee, the claims
and review procedure set forth in this Section shall be the mandatory
claims and review procedure for the resolution of disputes and disposition of
claims filed under the Plan. An application for benefits shall be considered as
a claim for the purposes of this Section.

 

7.4.1                      Initial Claim.  An individual may, subject to any applicable
deadline, file with the Committee a written claim for benefits under the Plan
in a form and manner prescribed by the Committee.

 

(a)                                 If
the claim is denied in whole or in part, the Committee shall notify the
claimant of the adverse benefit determination within ninety (90) days after
receipt of the claim.

 

(b)                                The
ninety (90) day period for making the claim determination may be extended for
ninety (90) days if the Committee determines that special circumstances require
an extension of time for determination of the claim, provided that the
Committee notifies the claimant, prior to the expiration of the initial ninety
(90) day period, of the special circumstances requiring an extension and the
date by which a claim determination is expected to be made.

 

7.4.2                      Notice of Initial Adverse Determination.  A notice of an adverse determination shall
set forth in a manner calculated to be understood by the claimant:

 

(a)                                 the
specific reasons for the adverse determination;

 

17

 

(b)                                references to the specific provisions of the
Plan Statement (or other applicable Plan document) on which the adverse
determination is based;

 

(c)                                 a description of any additional material or
information necessary to perfect the claim and an explanation of why such
material or information is necessary; and

 

(d)                                a description of the claims review procedure,
including the time limits applicable to such procedure, and a statement of the
claimant’s right to bring a civil action under ERISA section 502(a) following
an adverse determination on review.

 

7.4.3                      Request for Review. Within sixty (60) days after receipt of an
initial adverse benefit determination notice, the claimant may file with
the Committee a written request for a review of the adverse determination and
may, in connection therewith submit written comments, documents, records and
other information relating to the claim benefits. Any request for review of the
initial adverse determination not filed within sixty (60) days after receipt of
the initial adverse determination notice shall be untimely.

 

7.4.4                      Claim on Review. If the claim, upon review, is denied in
whole or in part, the Committee shall notify the claimant of the adverse
benefit determination within sixty (60) days after receipt of such a request
for review.

 

(a)                                 The sixty (60) day period for deciding the
claim on review may be extended for sixty (60) days if the Committee determines
that special circumstances require an extension of time for determination of
the claim, provided that the Committee notifies the claimant, prior to the
expiration of the initial sixty (60) day period, of the special circumstances
requiring an extension and the date by which a claim determination is expected
to be made.

 

(b)                                In the event that the time period is extended
due to a claimant’s failure to submit information necessary to decide a claim
on review, the claimant shall have sixty (60) days within which to provide the
necessary information and the period for making the claim determination on
review shall be tolled from the date on which the notification of the extension
is sent to the claimant until the date on which the claimant responds to the
request for additional information or, if earlier, the expiration of sixty (60)
days.

 

(c)                                 The Committee’s review of a denied claim
shall take into account all comments, documents, records, and other information
submitted by the claimant relating to the claim, without regard to whether such
information was submitted or considered in the initial benefit determination.

 

7.4.5                      Notice of Adverse Determination for Claim on Review. A notice of an adverse determination for a
claim on review shall set forth in a manner calculated to be understood by the
claimant:

 

(a)                                 the specific reasons for the denial;

 

18

 

(b)                                references to the specific provisions of the
Plan Statement (or other applicable Plan document) on which the adverse
determination is based;

 

(c)                                 a statement that the claimant is entitled to
receive, upon request and free of charge, reasonable access to, and copies of,
all documents, records, and other information relevant to the claimant’s claim
for benefits;

 

(d)                                a statement describing any voluntary appeal
procedures offered by the Plan and the claimant’s right to obtain information
about such procedures; and

 

(e)                                 a statement of the claimant’s right to bring
an action under ERISA section 502(a).

 

7.5                                Rules and Regulations.

 

7.5.1                      Adoption of Rules. Any rule not
in conflict or at variance with the provisions hereof may be adopted by the
Committee.

 

7.5.2                      Specific Rules.

 

(a)                                 No
inquiry or question shall be deemed to be a claim or a request for a review of
a denied claim unless made in accordance with the established claim procedures.
The Committee may require that any claim for benefits and any request for a
review of a denied claim be filed on forms to be furnished by the Committee
upon request.

 

(b)                                All
decisions on claims and on requests for a review of denied claims shall be made
by the Committee unless delegated as provided for in the Plan, in which case
references in this Section 7 to the Committee shall be treated as
references to the Committee’s delegate.

 

(c)                                 Claimants
may be represented by a lawyer or other representative at their own expense,
but the Committee reserves the right to require the claimant to furnish written
authorization and establish reasonable procedures for determining whether an
individual has been authorized to act on behalf of a claimant. A claimant’s
representative shall be entitled to copies of all notices given to the
claimant.

 

(d)                                The
decision of the Committee on a claim and on a request for a review of a denied
claim may be provided to the claimant in electronic form instead of in writing
at the discretion of the Committee.

 

(e)                                 In
connection with the review of a denied claim, the claimant or the claimant’s
representative shall be provided, upon request and free of charge, reasonable
access to, and copies of, all documents, records, and other information
relevant to the claimant’s claim for benefits.

 

(f)                                   The
time period within which a benefit determination will be made shall begin to
run at the time a claim or request for review is filed in accordance with the 

 

19

 

claims procedures, without regard to whether all the
information necessary to make a benefit determination accompanies the filing.

 

(g)                                The
claims and review procedures shall be administered with appropriate safeguards
so that benefit claim determinations are made in accordance with governing plan
documents and, where appropriate, the plan provisions have been applied
consistently with respect to similarly situated claimants.

 

(h)                                For
the purpose of this Section, a document, record, or other information shall be
considered “relevant” if such document, record, or other information: (i) was
relied upon in making the benefit determination; (ii) was submitted,
considered, or generated in the course of making the benefit determination,
without regard to whether such document, record, or other information was
relied upon in making the benefit determination; (iii) demonstrates
compliance with the administration processes and safeguards designed to ensure
that the benefit claim determination was made in accordance with governing plan
documents and that, where appropriate, the Plan provisions have been applied
consistently with respect to similarly situated claimants; and (iv) constitutes
a statement of policy or guidance with respect to the Plan concerning the
denied treatment option or benefit for the claimant’s diagnosis, without regard
to whether such advice or statement was relied upon in making the benefit
determination.

 

(i)                                    The
Committee may, in its discretion, rely on any applicable statute of limitation
or deadline as a basis for denial of any claim.

 

7.6                                Deadline to File Claim. To be
considered timely under the Plan’s claim and review procedure, a claim must be
filed with the Committee within one (1) year after the claimant knew or
reasonably should have known of the principal facts upon which the claim is
based.

 

7.7                                Exhaustion of Administrative Remedies.
The exhaustion of the claim and review procedure is mandatory for resolving
every claim and dispute arising under the Plan. As to such claims and disputes:

 

(a)                                 no
claimant shall be permitted to commence any legal action to recover Plan
benefits or to enforce or clarify rights under the Plan under section 502 or
section 510 of ERISA or under any other provision of law, whether or not
statutory, until the claim and review procedure set forth herein have been
exhausted in their entirety; and

 

(b)                                in
any such legal action all explicit and all implicit determinations by the
Committee (including, but not limited to, determinations as to whether the
claim, or a request for a review of a denied claim, was timely filed) shall be
afforded the maximum deference permitted by law.

 

7.8                                Deadline to File Legal Action. No
legal action to recover Plan benefits or to enforce or clarify rights under the
Plan under section 502 or section 510 of ERISA or under any other provision of
law, whether or not statutory, may be brought by any claimant on any matter
pertaining to the Plan unless the legal action is commenced in the proper forum
before the earlier of:

 

(a)                                 thirty
(30) months after the claimant knew or reasonably should have known of the
principal facts on which the claim is based, or

 

20

 

(b)                                six
(6) months after the claimant has exhausted the claim and review
procedure.

 

7.9                                Knowledge of Fact by Participant Imputed to Beneficiary.
Knowledge of all facts that a Participant knew or reasonably should have known
shall be imputed to every claimant who is or claims to be a Beneficiary of the
Participant or otherwise claims to derive an entitlement by reference to the
Participant for the purpose of applying the previously specified periods.

 

7.10                          Information Furnished by Participants.  Neither the Principal Sponsor, and Employer
nor the Committee shall not be liable or responsible for any error in the
computation of the benefit of a Participant resulting from any misstatement of
fact made by the Participant, directly or indirectly, to the Principal Sponsor,
and used by it in determining the Participant’s benefit.  The Principal Sponsor shall not be obligated
or required to increase the benefit of such Participant, which, on discovery of
the misstatement, is found to be understated as a result of such misstatement of
the Participant.  However, the benefit of
any Participant, which is overstated by reason of any such misstatement, shall
be reduced to the amount appropriate in view of the truth.

 

7.11                          Overpayments.  If a payment or series of payments made from
this Plan is found to be greater than the benefit to which a Participant or
Beneficiary is entitled due to factual errors, mathematical errors or
otherwise, the Committee may, in its discretion, and in addition to or in lieu
of any other legal remedies it may have suspend or reduce future benefits to
such Participant or Beneficiary as it deems appropriate to correct the
overpayment.

 

21

 

SECTION 8

 

PLAN ADMINISTRATION

 

8.1                                Principal Sponsor.

 

8.1.1                      Officers.  Except as hereinafter provided, functions
generally assigned to the Principal Sponsor shall be discharged by its officers
or delegated and allocated as provided herein.

 

8.1.2                      Chief Executive Officer.  The Chief Executive Officer of the Principal
Sponsor may delegate or re-delegate and allocate and reallocate to a Committee
such functions assigned to the Principal Sponsor as may from time to time be
deemed advisable.

 

8.2                                Committee.

 

8.2.1                      Appointment and Removal.  The Committee shall consist of three or more
members as may be determined and appointed from time to time by the Chief
Executive Officer or the President of the Principal Sponsor and they shall
serve at the pleasure of such Chief Executive Officer or President of the
Principal Sponsor.

 

8.2.2                      Automatic Removal.  If any individual who is a member of the
Committee is a director, officer or employee when appointed as a member of the
Committee, then such individual shall be automatically removed as a member of
the Committee at the earliest time such individual ceases to be a director,
officer or employee.  This removal shall
occur automatically and without any requirement for action by the Chief
Executive Officer or President of the Principal Sponsor or any notice to the
individual so removed.

 

8.2.3                      Authority.  The Committee may elect such officers as the
Committee may decide upon.  The Committee
shall:

 

(a)                                 establish
rules for the functioning of the Committee, including the times and places
for holding meetings, the notices to be given in respect of such meetings and
the number of members who shall constitute a quorum for the transaction of
business,

 

(b)                                organize
and delegate to such of its members as it shall select authority to execute or
authenticate rules, advisory opinions or instructions, and other instruments
adopted or authorized by the Committee; adopt such bylaws or regulations as it
deems desirable for the conduct of its affairs; appoint a secretary, who need
not be a member of the Committee, to keep its records and otherwise assist the
Committee in the performance of its duties; keep a record of all its
proceedings and acts and keep all books of account, records and other data as
may be necessary for the proper administration of the Plan; notify the Employer
and the Trustee of any action taken by the Committee and, when required, notify
any other interested person or persons,

 

(c)                                 determine
from the records of the Employer the compensation, service records, status and
other facts regarding Participants and other employees,

 

22

 

(d)                                cause
to be compiled at least annually, from the records of the Committee and the
reports and accountings of any Trustee, a report or accounting of the status of
the Plan and the benefits of the Participants, and make it available to each Participant
who shall have the right to examine that part of such report or accounting (or
a true and correct copy of such part) which sets forth the Participant’s
benefits and ratable interest in the Plan,

 

(e)                                 prescribe
forms to be used for applications for participation, benefits, notifications,
etc., as may be required in the administration of the Plan,

 

(f)                                   set
up such rules as are deemed necessary to carry out the terms of this Plan
Statement,

 

(g)                                resolve
all questions of administration of the Plan not specifically referred to in
this Section,

 

(h)                                delegate
or re-delegate to one or more persons, jointly or severally, and whether or not
such persons are members of the Committee or employees of the Employer, such
functions assigned to the Committee hereunder as it may from time to time deem
advisable and in the event of any such delegation, references to the Committee
shall be treated as references to the Committee, and

 

(i)                                    perform
all other acts reasonably necessary for administering the Plan and carrying out
the provisions of this Plan Statement and performing the duties imposed on it.

 

8.2.4                      Majority Decisions.  If there shall at any time be three (3) or
more members of the Committee serving hereunder who are qualified to perform a
particular act, the same may be performed, in writing or in a meeting, on
behalf of all, by a majority of those qualified, with or without the
concurrence of the minority.  No person
who failed to join or concur in such act shall be held liable for the
consequences thereof, except to the extent that liability is imposed under
ERISA.

 

8.3                                Limitation on Authority.

 

8.3.1                      Generally.  No action taken by any person, if authority
to take such action has been delegated or re-delegated to it, shall be the
responsibility of any other person except as may be required by the provisions
of ERISA.  Except to the extent imposed
by ERISA, no person shall have the duty to question whether any other fiduciary
is fulfilling all of the responsibility imposed upon such other person by the
Plan Statement or by ERISA.

 

8.3.2                      Trustee.  If any trust is established, the
responsibilities and obligations of the Trustee shall be strictly limited to
those set forth in the agreement of trust.  
The Trustee shall have no authority or duty to determine or enforce
payment of any Employer contribution under the Plan or to determine the
existence, nature or extent of any individual’s rights in the Fund or under the
Plan or question any determination made by the Principal Sponsor or the
Committee regarding the same.  Nor shall
the Trustee be responsible in any way for the manner in which the Principal
Sponsor, the Employer or the Committee carries out its responsibilities under
this Plan Statement or, more generally, under the Plan.  The Trustee shall give the Principal Sponsor
notice of (and tender to the Principal Sponsor) 

 

23

 

the prosecution or defense of any litigation involving
the Plan, the Fund or other person acting with respect to the Plan.

 

8.4                                Conflict of Interest.  If any officer or employee of the Employer,
any member of the Board of Directors of the Employer, any member of the
Committee or any Trustee to whom authority has been delegated or re-delegated
hereunder shall also be a Participant (or Participant’s Spouse), the individual
shall have no authority as such officer, employee, member or Trustee with
respect to any matter specially affecting his or her individual interest
hereunder (as distinguished from the interests of all Participants and
Beneficiaries or a broad class of Participants and Beneficiaries), all such
authority being reserved exclusively to the other officers, employees, members
or Trustees as the case may be, to the exclusion of such Participant or such
Beneficiary, and such Participant or Beneficiary shall act only in his or her
individual capacity in connection with any such matter.

 

8.5                                Dual Capacity.  Individuals, firms, corporations or
partnerships identified herein or delegated or allocated authority or
responsibility hereunder may serve in more than one fiduciary capacity.

 

8.6                                Administrator.  The Principal Sponsor shall be the
administrator for purposes of section 3(16)(A) of ERISA.

 

8.7                                Service of Process.  In the absence of any designation to the
contrary by the Principal Sponsor, the Secretary of the Principal Sponsor is
designated as the appropriate and exclusive agent for the receipt of service of
process directed to the Plan in any legal proceeding, including arbitration,
involving the Plan.

 

8.8                                Administrative Expenses.  The reasonable expenses of administering the
Plan shall be payable out of the Trust Fund, if any, except to the extent that
the Employer, in its discretion, directly pays the expenses.

 

24

 

SECTION 9

 

DISCLAIMERS

 

9.1                                Term of Employment.  Neither the terms of this Plan Statement nor
the benefits hereunder nor the continuance thereof shall be a term of the
employment of any employee.  The Employer
shall not be obliged to continue the Plan. 
The terms of this Plan Statement shall not give any employee the right
to be retained in the employment of the Employer.

 

9.2                                Source of Payment.  Neither the Employer nor any of its officers
nor any member of its Committee or the Board of Directors in any way secure or
guarantee the payment of any benefit or amount which may become due and payable
hereunder to any Participant or to any Beneficiary or to any creditor of a
Participant or a Beneficiary.  Each
Participant or other person entitled at any time to payments hereunder shall
look solely to the assets of the Employer for such payments.  In each case where benefits shall have been
distributed to a former Participant and which purports to cover in full the
benefit hereunder, such former Participant shall have no further right or
interest in the other assets of the Employer. 
Neither the Employer nor any of its officers nor any member of its Board
of Directors shall be under any liability or responsibility for failure to
affect any of the objectives or purposes of the Plan by reason of the
insolvency of the Employer.

 

9.3                                Delegation.  The Employer, and its officers and the
members of its Board of Directors and Committee shall not be liable for an act
or omission of another person with regard to a responsibility that has been
allocated to or delegated to such other person pursuant to the terms of this
Plan Statement or pursuant to procedures set forth in this Plan Statement.

 

                                    ,
200 

 

	
   

  	
  Xcel Energy Inc.

  
	
   

  	
   

  
	
   

  	
  By

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Its

  	
   

  

 

25

 

ADDENDUM A

 

Section 415 Excess Benefit Plan Benefit

 

SECTION 1

 

INTRODUCTION

 

The benefit of a
Participant whose benefit under this Plan is solely attributable to the
limitations of Code section 415 shall be determined as follows:

 

A.1.1                   Section 415 Excess Benefit of Participants Whose Qualified Pension
Plan Benefit is Determined under the Traditional Formula.  The Section 415 Excess
Benefit of a Participant whose Qualified Pension Plan Benefit is determined
under the traditional benefit formula of a Qualified Pension Plan shall, at
such Participant’s Separation from Service, be equal to (a) - (b) multiplied
by (c) as follows:

 

(a)                                 the
Participant’s Qualified Pension Plan Benefit determined without regard to the
limitation imposed by Code section 415 (but applying the limitation imposed by
Code section 401(a)(17)),

 

minus

 

(b)                                the
Participant’s actual Qualified Pension Plan Benefit,

 

multiplied
by

 

(c)                                 a
percentage equal to that percentage which the Participant is vested in his or her
benefit under a Qualified Pension Plan at the time of his or her Separation
from Service.

 

A.1.2                   Section 415 Excess Benefit of Participants Whose
Qualified Pension Plan Benefit is Determined under the Account Balance or PEP
Formulas.  A Participant whose
Qualified Pension Plan benefit is determined by reference to the account
balance or PDP formula shall, effective for Plan Years beginning on and after January 1,
2003, earn a benefit under this Plan determined as of the date such Participant’s
benefit is to be paid, equal to (a) — (b) multiplied by (c), as
follows:

 

(d)                                The
Actuarial Equivalent single life annuity determined by reference to the
Participant’s account or PDP balance under the Qualified Plan as of the date
the Participant’s benefit under this Plan is to be paid calculated without
regard to the limitations imposed by Code section 415 (but applying the
limitation imposed by Code section 401(a)(17)),

 

26

 

minus

 

(e)                                 The
Actuarial Equivalent single life annuity determined by reference to the
Participant’s actual account or PDP balance under the Qualified Plan as of the
date the Participant’s benefit under this Plan is to be paid after applying the
limitations imposed by Code section 415 (and applying the limitation imposed by
Code section 401(a)(17)),

 

multiplied by

 

(f)                                   A
percentage equal to that percentage which the Participant is vested in his or
her benefit under a Qualified Pension Plan at the time of his or her Separation
from Service.

 

27Exhibit 10.05

 

XCEL ENERGY SENIOR EXECUTIVE SEVERANCE AND

CHANGE-IN-CONTROL POLICY

 

(2009 AMENDMENT AND RESTATEMENT)

 

Introduction

 

The Xcel Energy Senior Executive Severance Policy
expired August 18, 2003. Effective as of such date, all rights and entitlements
of participants under such policy ceased.

 

ARTICLE I

ESTABLISHMENT
OF POLICY

 

The Corporation hereby establishes, effective as of October 22,
2003, a separation compensation policy known as the Xcel Energy Senior
Executive Severance and Change-in-Control Policy. The Policy is hereby amended
and restated to take into account changes since the October 22, 2003
effective date including the First and Second Amendments, and the changes
required by section 409A of the Internal Revenue Code.

 

ARTICLE II

DEFINITIONS

 

As used herein the following words and phrases shall
have the following respective meanings unless the context clearly indicates
otherwise.  (In addition, certain terms
used in Section 4.5 of this Policy are defined in Section 4.5.)

 

(a)           Annual
Salary.  The Participant’s regular
annual rate of base salary payable by the Participant’s Employer, including
base salary converted to other benefits under a flexible pay arrangement
maintained by the Corporation or a Subsidiary or deferred pursuant to a written
plan or agreement with the Corporation or a Subsidiary, but excluding overtime
pay, allowances, premium pay, compensation paid or payable under any
Corporation or Subsidiary long-term or short-term incentive plan or any similar
payment.

 

(b)           Board.  The Board of Directors of the Corporation.

 

(c)           Change-in-Control.  Is the occurrence on or after the Effective
Date of any of the events described in subsections (i) through (iv),
below:

 

(i)            An acquisition by an individual,
entity or group (within the meaning of Section 13(d)(3) or 14(d)(2) of
the Securities Exchange Act of 1934, as amended) (a “Person”) of beneficial
ownership (within the meaning of Rule 13d-3 promulgated under the Exchange
Act) of twenty percent (20%) or more of either (1) the then outstanding
shares of common stock of the Corporation (the “Outstanding Corporation Common
Stock”), or (2) the combined voting power of the then outstanding voting
securities of the Corporation entitled to vote generally in the election of 

 

 

directors (the “Outstanding Corporation Voting
Securities”); excluding, however, the following: (A) any acquisition
directly from the Corporation, other than an acquisition by virtue of the
exercise of a conversion privilege unless the security being so converted was
itself acquired directly from the Corporation, (B) any acquisition by the
Corporation, (C) any acquisition by any employee benefit plan (or related
trust) sponsored or maintained by the Corporation or any corporation controlled
by the Corporation, or (D) any acquisition by any corporation pursuant to
a transaction which complies with clauses (1), (2) and (3) of
subsection (iii) of this definition; or

 

(ii)           A change in the composition of the
Board such that the individuals who, as of the Effective Date, constitute the
Board (the “Incumbent Board”) cease for any reason to constitute at least a
majority of the Board; provided, however, that any individual who becomes a
member of the Board subsequent to the Effective Date whose election, or
nomination for election by the Corporation’s shareholders, was approved by a
vote of at least a majority of those individuals then comprising the Incumbent
Board shall be considered as though such individual were a member of the
Incumbent Board; but, provided further, that any such individual whose initial
assumption of office occurs as a result of either an actual or threatened
election contest with respect to the election or removal of directors or other
actual or threatened solicitation of proxies or consents by or on behalf of a
Person other than the Board shall not be so considered as a member of the
Incumbent Board; or

 

(iii)          The approval by the shareholders of
the Corporation of a reorganization, merger, consolidation, share exchange or
sale or other disposition of all or substantially all of the assets of the
Corporation (“Corporate Transaction”) or, if consummation of such Corporate
Transaction is subject, at the time of such approval by shareholders, to the
consent of any government or governmental agency, the obtaining of such consent
(either explicitly or implicitly by consummation); excluding, however, such a
Corporate Transaction pursuant to which (1) all or substantially all of
the individuals and entities who are the beneficial owners, respectively, of
the Outstanding Corporation Common Stock and Outstanding Corporation Voting
Securities immediately prior to such Corporate Transaction will beneficially
own, directly or indirectly, more than sixty percent (60%) of, respectively,
the outstanding shares of common stock, and the combined voting power of the
then outstanding voting securities entitled to vote generally in the election
of directors, as the case may be, of the corporation resulting from such
Corporate Transaction (including, without limitation, a corporation which as a
result of such transaction owns the Corporation or all or substantially all of
the Corporation’s assets either directly or through one or more subsidiaries)
in substantially the same proportions as their ownership, immediately prior to
such Corporate Transaction, of the Outstanding Corporation Common 

 

2

 

Stock and Outstanding Corporation Voting Securities,
as the case may be, (2) no Person (other than the Corporation, any
employee benefit plan (or related trust) of the Corporation or such corporation
resulting from such Corporate Transaction) will beneficially own, directly or
indirectly, twenty percent (20%) or more of, respectively, the outstanding
shares of common stock of the corporation resulting from such Corporate
Transaction or the combined voting power of the outstanding voting securities
of such corporation entitled to vote generally in the election of directors
except to the extent that such ownership existed prior to the Corporate Transaction
and (3) individuals who were members of the board of directors of the
Incumbent Board will constitute at least a majority of the members of the board
of directors of the corporation resulting from such Corporate Transaction; or

 

(iv)          The approval by the shareholders of
the Corporation of a complete liquidation or dissolution of the Corporation.

 

(d)           Change-in-Control
Multiple.  For each Participant the
number set forth opposite the Participant’s name in the column titled
Change-in-Control Multiple on the Schedule I hereto.

 

(e)           Code.  The Internal Revenue Code of 1986, as amended
from time to time.

 

(f)            Committee.  The Governance, Compensation and Nominating
Committee of the Board or any successor to such committee.

 

(g)           Corporation.  Xcel Energy Inc.  and
any successor thereto.

 

(h)           Date
of Termination.  The date on which a
Participant ceases to be an Employee and has a “separation from service” as
defined in section 409A of the Code.

 

(i)            Effective
Date.  The effective date of this
amended and restated Policy, or January 1, 2009.

 

(j)            Employee.  Any full-time, regular-benefit,
non-bargaining employee of an Employer. 
The term shall exclude all individuals employed as independent
contractors, temporary employees, other benefit employees, non-benefit employees
or leased employees, even if it is subsequently determined that such
classification is incorrect.

 

(k)           Employer.  The Corporation or a Subsidiary, which has
adopted the Policy pursuant to Article V hereof.  Notwithstanding the provisions of Article V,
however, if an Employee is transferred to a Subsidiary that is not otherwise an
Employer, such Subsidiary shall be deemed, effective as of the effective time
of such transfer, an Employer with respect to the Participant for all purposes
of this Policy even though it has not otherwise adopted the Policy pursuant to Article V.

 

(l)            Good
Reason.       Any one or more of the
following conditions arising without the consent of the Participant as a result
of any action or inaction by the Employer or any of its 

 

3

 

affiliates: (i) a material diminution of the
Participant’s base compensation, or (ii) a material diminution in the
Participant’s authority, duties or responsibilities.

 

(m)          Participant.  An Employee who is designated as such
pursuant to Section 3.1.

 

(n)           Policy.  The Xcel Energy Senior Executive Severance
and Change-in-Control Policy, as it may, from time to time, be amended.

 

(o)           Release Agreement.  An agreement substantially in the form set
forth in Exhibit A to this Policy, with such amendments as the Committee
may determine to be necessary in order for such agreement to constitute a valid
release by the Participant in question of all claims described therein.

 

(p)           Separation Benefits.  The payments and benefits described in Section 4.3
or Section 4.4, whichever applies, that are provided to qualifying
Participants under the Policy.

 

(q)           Separation Period.  The period beginning on a Participant’s Date
of Termination and ending upon expiration of the number of consecutive 12-month
periods computed with reference to such Date of Termination and anniversaries
thereof that are equal to the Participant’s Severance Multiple.

 

(r)            Severance Multiple. For each
Participant the number set forth opposite the Participant’s name in the column
titled Severance Multiple on the Schedule I hereto.

 

(s)           Subsidiary.  Any corporation or other entity in which the
Corporation, directly or indirectly, holds a majority of the voting power of
such corporation’s or entity’s outstanding shares of capital stock or ownership
interests. An “affiliate” for purposes of this Policy means with respect to the
Corporation or any other entity, an entity that directly, or indirectly through
one or more intermediaries, controls, is controlled by, or is under common
control with, the Corporation or such other entity.

 

(t)            Target Annual Incentive.  The Annual Incentive Award under the Xcel
Energy Inc. Executive Annual Incentive Award Plan or successor thereto that the
Participant would have earned for the year in which his or her Date of
Termination occurs, if the target goals for such year had been achieved.

 

ARTICLE III

ELIGIBILITY

 

3.1                                Participation.  Each of the Employees named on Schedule I
hereto shall be a Participant in the Policy as of the Effective Date.  Schedule I may be amended by the Board or by
the Committee from time to time to add Employees as Participants.

 

3.2                                Duration
of Participation.  A Participant
shall only cease to be a Participant in the Policy as a result of an amendment
or termination of the Policy complying with Article VII of the Policy, or
when he or she ceases to be an Employee, unless, at the time he or she ceases
to be an Employee, such Participant is entitled to payment of Separation
Benefits as provided in the 

 

4

 

Policy or there has been an event or occurrence
described in Section 4.2(b) which would enable the Participant to
terminate employment and receive Separation Benefits.  A Participant entitled to payment of Separation
Benefits or any other amounts under the Policy shall remain a Participant in
the Policy until the full amount of the Separation Benefits and any other
amounts payable under the Policy have been paid to the Participant.

 

ARTICLE IV

SEPARATION
BENEFITS

 

4.1                                Right
to Separation Benefit.  A Participant
shall be entitled to receive Separation Benefits in accordance with Section 4.3
or Section 4.4, whichever applies, if the Participant’s Date of
Termination occurs in the circumstances set forth in Section 4.2(a) or
Section 4.2(b).

 

4.2                                Termination
of Employment.

 

(a)           Other
than Change-in-Control.  Except as
set forth in subsection (c) below, a Participant shall be entitled to
Separation Benefits if, at any time, other than during the period beginning on
the effective date of the occurrence of a Change-in-Control and ending on the
day before the second anniversary thereof, the Participant’s Date of
Termination occurs because the Participant ceases to be an Employee by action
of the Employer or any of its affiliates (excluding any transfer to another
Employer or a Subsidiary);

 

(b)           Change-in-Control.  Except as set forth in subsection (c) below,
a Participant shall be entitled to Separation Benefits if at any time beginning
on the effective date of the occurrence of a Change in Control and ending on
the day before the second anniversary thereof, if the Participant’s Date of
Termination occurs in the following circumstances:

 

(i)            the Participant
ceases to be an Employee by action of the Employer or any of its affiliates
(excluding any transfer to another Employer or a Subsidiary); or

 

(ii)           a Good Reason
arises and the Participant voluntarily terminates within 130 days after the
occurrence of such Good Reason;

 

With respect to a termination by the Participant
pursuant to clause (ii) of this Section 4.2(b), such termination
shall be effective for purposes of this Section 4.2(b), if and only if the
Participant has given written notice to his or her Employer of his or her
intent to terminate for Good Reason 
(stating the condition(s) relied upon for such Good Reason) within
90 days of initial existence of the condition(s) which constitute Good
Reason, and the Employer or an affiliate of the Employer, as the case may be,
has failed to remedy such condition(s) specified in such notice which
constitute Good Reason  within the 30 day
period following receipt of such notice.

 

(c)           Terminations
Which Do Not Give Rise to Separation Benefits Under This Policy.  If a Participant ceases to be an Employee and
incurs a Date of Termination because the Participant’s employment is terminated
for Cause, or by death, disability, or retirement, or due to a qualified sale
of business (as those terms are defined below), or voluntarily by the
Participant unless, if a Change-in-Control has occurred, the termination meets
the requirements of 

 

5

 

subsection  (b)(ii) of
this Section 4.2, the Participant shall not be entitled to Separation
Benefits under the Policy.

 

(i)            A termination by
disability shall have occurred where a Participant is terminated because of an
illness or injury and the Participant has become eligible to receive long-term
disability benefits under the Corporation’s or a Subsidiary’s long-term
disability plan, as it exists at the time of termination of employment.

 

(ii)           A termination by
retirement shall have occurred where a Participant’s termination is due to his
voluntary late, normal or early retirement under a defined benefit pension plan
sponsored by his Employer or its affiliates, as “late”, “normal” or “early”
retirement may be defined in such plan.

 

(iii)          A termination for
Cause shall have occurred where a Participant is terminated because of:

 

(A)          the willful and
continued failure of the Participant to perform substantially the Participant’s
duties with the Corporation or one of its Subsidiaries (other than any such
failure resulting from incapacity due to physical or mental illness), after a
written demand for substantial performance is delivered to the Participant by
the Board which specifically identifies the manner in which the Board believes
that the Participant has not substantially performed the Participant’s duties,
or

 

(B)           the willful engaging
by the Participant in illegal conduct or gross misconduct which is materially and
demonstrably injurious to the Corporation, Subsidiaries or one of its
affiliates.

 

For purposes of this provision, no act or failure to
act, on the part of the Participant, shall be considered “willful” unless it is
done, or omitted to be done, by the Participant in bad faith or without
reasonable belief that the Participant’s action or omission was in the best
interests of the Corporation, Subsidiaries or its affiliates, as the case may
be.  Any act, or failure to act, based
upon authority given pursuant to a resolution duly adopted by the Board, or
upon the advice of counsel for the Corporation, shall be conclusively presumed
to be done, or omitted to be done, by the Participant in good faith and in the
best interests of the Corporation, Subsidiaries or its affiliates.

 

(iv)          A termination due to
a qualified sale of business shall have occurred where an Employer or an
affiliate of an Employer has sold, distributed or otherwise disposed of the
subsidiary, branch or other business unit in which the Participant was employed
immediately before such sale, distribution or disposition and the Participant
has been offered employment with the purchaser of such subsidiary, branch or
other business unit or the corporation or other entity which is the owner
thereof on substantially the same terms and conditions under

 

6

 

which he or she
worked for the Employer or Subsidiary (including, without limitation, duties
and responsibilities, and the aggregate of the Participant’s base salary and
program of benefits).  Such terms and
conditions shall include, without limitation, a legally binding agreement or
plan covering such Participant, providing that upon a termination of employment
with the subsidiary, branch or business unit (or the corporation or other
entity which is the owner thereof) or any successor thereto of the kind described
in Article VI of this Policy, that would have entitled the Participant to
Separation Benefits by reason of Section 4.2(a) of this Policy had
the Participant still been a Participant herein, at any time before the third
anniversary of the date of the sale, distribution or disposition, the
Participant’s employer or any successor will pay to such former Participant an
amount equal to the Separation Benefits under Section 4.3 of this Policy
that such former Participant would have received under the Policy had he or she
been a Participant at the time of such termination and been entitled to
Separation Benefits thereunder.  For
purposes of this subsection, the new employer plan or agreement must treat
service with any Employer (irrespective of whether the Employer was an
affiliate of the Corporation or the Employee was a Participant at the time of
such service) and the new employer as continuous service for purposes of
calculating separation benefits.

 

4.3                                Separation
Benefits (non Change-in-Control).

 

(a)                                 If
a Participant’s ceases to be an Employee in circumstances entitling him to
Separation Benefits as provided in Section 4.2(a), and the Participant
executes within 45 days after the Participant’s Date of Termination and does
not revoke a Release Agreement, the Participant’s Employer shall pay such
Participant, within fifteen days of the Date of Termination, or if later, upon
the date such Release Agreement becomes irrevocable, a cash lump sum as set
forth in subsection (b) below and the continued benefits set forth in
subsection (c) of Section 4.3, below, subject to Section 4.6
below.

 

(b)                                The
cash lump sum referred to in Section 4.3(a) shall equal the aggregate
of the following amounts:

 

(i)            the sum of (1) the
Participant’s Annual Salary through the Date of Termination to the extent not
theretofore paid, (2) the product of (x) the Target Annual Incentive
and (y) a fraction, the numerator of which is the number of days in such
year through the Date of Termination, and the denominator of which is 365, and (3) any
accrued vacation pay, in each case to the extent not theretofore paid and in
full satisfaction of the rights of the Participant thereto;

 

(ii)           an amount equal to
the product of (1) the Participant’s Severance Multiple and (2) the
sum of (x) the Participant’s Annual Salary as in effect immediately prior
to his or her Date of Termination, and (y) the Target Annual Incentive;

 

(iii)          an amount equal to (A) minus
(B), where (A) is the accrued pension benefit under the qualified and
non-qualified pension plans sponsored by 

 

7

 

the Employer in
which the Participant participates, with the addition of credited service
during the Separation Period, and (B) is the accrued pension benefit under
the qualified and non-qualified pension plans sponsored by the Employer in
which the Participant participates as of the Date of Termination; and

 

(iv)          the sum of the
additional contributions (other than pre-tax salary deferral contributions by
the Participant) that would have been made or credited by the Employers to the
Participant’s accounts, whether or not the Participant was vested therein,
under each qualified defined contribution plan and non-qualified supplemental
executive savings plan, if any, that covered the Participant on the day
immediately proceeding the Date of Termination determined by assuming that:

 

(A)          The Participant’s
employment had continued for the Separation Period and the Participant
continued as an active participant in such plans;

 

(B)           The Participant’s
rate of compensation being recognized by each plan immediately prior to the
Date of Termination had continued in effect during the Separation Period;

 

(C)           In the case of
matching contributions, the Participant’s rate of pre-tax salary deferral
contributions in effect on the day immediately prior to the Date of Termination
had remained in effect throughout the Separation Period; and

 

(D)          In the case of
discretionary contributions by the Employers, the Employers continued to make
such contributions during the Separation Period at the rate that applied to the
most recent plan year that ended prior to the Date of Termination.

 

(v)           the sum of the Executive’s “flexible
perquisite allowance” through the Separation Period

 

(c)                                 The
continued benefits referred to above shall be as follows:

 

(i)            During the
Separation Period, the Participant and his family shall be provided with
medical, dental and life insurance benefits as if the Participant’s employment
as an Employee had not terminated; provided, however, that if the Participant
becomes reemployed with another employer and is eligible to receive such
medical or other welfare benefits under another employer-provided plan, the
medical and other welfare benefits described herein shall be secondary to those
provided under such other plan during such applicable period of eligibility,
and provided further, that with respect to any such benefits providing for the
reimbursement of medical expenses referred to in Section 105(b) of
the Code under a self-insured medical reimbursement plan (within the meaning of
Code Section 105(h)), including, without limitation, medical or dental
benefits, that are incurred following the period the Participant would be
entitled (or would, but for 

 

8

 

this Section 4.3(c)(i),
be entitled) to continuation coverage under such plan under Code Section 4980B
(COBRA) if the Participant had elected such coverage and paid the applicable
premiums, the reimbursement of an eligible medical expense must be made on or
before the last day of the calendar year following the calendar year in which
the expense was incurred and the amount of such expenses eligible for
reimbursement in one year may not affect the amount of expenses eligible for
payment, or in-kind benefits to be provided, in any other taxable year except
as otherwise provided in Section 409A of the Code and the regulations
thereunder.; and for purposes of determining eligibility (but not the time of
commencement of benefits) of the Participant for retiree medical, dental and
life insurance benefits under the Corporation’s or its Subsidiaries’ plans,
practices, programs and policies, the Participant shall be considered to have
remained employed during the Separation Period and to have retired on the last
day of such period;

 

(ii)           The Employer shall,
at its sole expense as incurred, provide the Participant with outplacement
services the scope and provider of which shall be selected by the Participant
in his or her sole discretion (but at a cost to the Employer of not more than
$30,000), provided that, such services must be provided and the expenses
therefore incurred prior to the end of the second calendar year following the
calendar year in which the Date of Termination occurs, and provided further, that
the Employer shall pay all reimbursements for such expenses so incurred not
later than the end of the third calendar year following the calendar year in
which the Date of Termination occurs;

 

To the extent any benefits described in this Section 4.3(c) cannot
be provided pursuant to the appropriate plan or program maintained for
Employees, the Employer shall provide such benefits outside such plan or
program at no additional cost (including without limitation tax cost) to the
Participant, provided however, that any tax gross-up provided shall be paid to
the Participant no later than the end of the calendar year next following the
calendar year in which the Participant incurs the related tax, but in no event
shall it be paid prior to the first day of the seventh month following the Date
of Termination.  Notwithstanding the
foregoing, if a group insurance carrier refuses to provide the coverage
described in this Section 4.3(c) under its contract issued to the
Corporation or a Subsidiary, as the case may be, or if the Corporation
reasonably determines that the coverage required under this Section 4.3(c) would
cause a welfare plan sponsored by the Corporation or a Subsidiary to violate
any provision of the Code prohibiting discrimination in favor of highly compensated
employees or key employees, the Employer will use its best efforts to obtain
for the Participant an individual insurance policy providing comparable
coverage.  However, if the Corporation
determines in good faith that comparable coverage cannot be obtained for less
than two times the premium or premium equivalent for such coverage under the
applicable Corporation or Subsidiary welfare plan or plans, the Employer’s sole
obligation under this Section 4.3(c) with respect to that coverage
will be limited to paying the Participant a monthly amount equal to two times
the monthly premium or premium equivalent for that coverage under the
applicable Corporation or Subsidiary’s plans, provided however, that that any
amount otherwise payable during the first six months following a Date of
Termination shall be paid as of the first day of the seventh month following
the Date of Termination.

 

9

 

4.4           Separation
Benefits (Change-in-Control).  If a
Participant’s ceases to be an Employee in circumstances entitling him or her to
Separation Benefits as provided in Section 4.2(b), and the Participant
executes within 45 days after the Participant’s date of termination and does
not revoke a Release Agreement, the Participant’s Employer shall pay such
Participant, within fifteen days of the Date of Termination, or if later, upon
the date such Release Agreement becomes irrevocable, a cash lump sum as set
forth in subsections (b)(i) through (b)(iv) of Section 4.3
above, together with continued benefits as set forth in Section 4.3(c) above
(subject to Section 4.6 below), provided however, that a Participant’s
Change in Control Multiple shall be substituted for his Severance Multiple in
applying the provisions of said subsections (including in determining the
length of the Separation Period as used therein).  For purposes of determining the cash lump sum
and continued benefits set forth in subsection (b) and (c) of Section 4.3,
if on or after the occurrence of a Change-in-Control a reduction of the
Participant’s Annual Salary or benefits has occurred which would entitle the
Participant to terminate employment and receive Separation Benefits under this Section 4.4,
such reduction shall be ignored.

 

4.4A       Other Benefits Payable.  The cash lump sum and continuing benefits
described in Sections 4.3 or 4.4 above shall be payable in addition to, and not
in lieu of, all other accrued, vested and earned but deferred compensation,
rights, options or other benefits which may be owed to a Participant upon or
following termination, including but not limited to accrued vacation or sick
pay, amounts or benefits payable under any bonus or other compensation plans,
stock option plan, stock ownership plan, stock purchase plan, life insurance
plan, health plan, disability plan or similar or successor plan, except to the
extent paid as provided in Section 4.3(b)(i) or Section 4.4 (by
incorporation of Section 4.3(b)(i)) above or as provided in Section 4.6
below.

 

4.5           Certain
Additional Payments or Reductions in Payments. Eligibility for the Gross-Up
Payment in Section 4.5(a) below is limited to those Participants who
have been designated as “Tier I Participants” listed on Schedule I herein.  Participants designated as “Tier II
Participants” shall be entitled to receive the full payment of such Separation
Payments if the Parachute Value of all Payments to which they are entitled
exceeds 110% of the Safe Harbor Amount, but will not receive a Gross-Up Payment
described below. Those Tier II Participants entitled to receive Payments the
Parachute Value of which exceeds the Safe Harbor Amount, but is equal to or
less than 110% of the Safe Harbor Amount, shall have their Separation Payments
reduced (but not below zero) so that the Parachute Value of all Payments to
which they are entitled equals the Safe Harbor Amount; provided, however, that
the reduction shall be made in such a manner as to maximize the Value of
Payments actually made to the Participant.

 

(a)                                 Gross-Up
or Reduction.

 

(i)            In the event it
shall be determined that any Payment would be subject to the Excise Tax, then
except to the extent provided below in this Section 4.5(a), the
Participant shall be entitled to receive an additional payment (a “Gross-Up
Payment”) in an amount such that after payment by the Participant of all taxes
(including any interest or penalties imposed with respect to such taxes),
including, without limitation, any income taxes (and any interest and penalties
imposed with respect thereto) and Excise Tax imposed upon the Gross-Up Payment,
the 

 

10

 

Participant
retains an amount of the Gross-Up Payment equal to the Excise Tax imposed upon
the Payments.

 

(ii)           Notwithstanding Section 4.5(a)(i),
if it shall be determined that the Participant is entitled to a Gross-Up
Payment pursuant to Section 4.5(a)(i) (before application of Sections
4.5(a)(ii), (iii) and (iv)), but that the Parachute Value of the Payments
does not exceed 110% of the Safe Harbor Amount, then no Gross-Up Payment shall
be made to the Participant and the Separation Payments, in the aggregate, shall
be reduced (but not below zero) such that the Parachute Value of all Payments
equals the Safe Harbor Amount, determined in such a manner as to maximize the
Value of all Payments actually made to the Participant.

 

(iii)          If it shall be
determined that the Participant is entitled to a Gross-Up Payment pursuant to Section 4.5(a)(i) and
the Payments are not reduced pursuant to Section 4.5(a)(ii), but one or
more of the Payments that is determined to be subject to the Excise Tax
consists of the accelerated vesting of a stock award under the Xcel Energy Inc.
Omnibus Incentive Plan or any successor thereto, then the Gross-Up Payment
shall be reduced by the portion thereof that is allocable to such accelerated
vesting.  The allocation of the Gross-Up
Payment to the individual Payments shall be made on a pro-rata basis using the
methodology set forth in Q&A 38 of Treasury Regulations Section 1.280G-1
or any comparable provision of any successor proposed or final regulations
under Sections 280G and 4999 of the Code.

 

(iv)          If it shall be
determined that a Participant is entitled to receive a Gross-Up Payment after
application of Sections 4.5(a)(i), (ii) and (iii), then a determination
shall be made whether it is possible to reduce the Separation Payments (but not
below zero) such that the Net After-Tax Amount of all the Payments (taking into
account such reduction) exceeds the Net After-Tax Amount of all the Payments
(not taking into account such reduction) plus the Gross-Up Payment.  If such a reduction is possible, then no
Gross-Up Payment shall be made and the aggregate Separation Payments shall be
so reduced (but not below zero); provided, that
the reduction shall be made in such a manner as to maximize the Value of all
Payments actually made to the Participant.

 

(b)                                Procedures.

 

(i)            All determinations
required to be made under Section 4.5, including whether and when a
Gross-Up Payment or a reduction in Separation Payments is required, the amount
of such Gross-Up Payment or reduction, and the assumptions to be utilized in arriving
at such determination, shall be made by a nationally recognized public
accounting firm or benefits consulting firm selected by the Corporation (the “Accounting/Consulting
Firm”), which shall provide detailed supporting calculations both to the
Corporation and the Participant within 15 business days of the receipt of
notice from the Participant that there has been a Payment, or such earlier time
as is requested by the Corporation; provided, that
if the Accounting/Consulting Firm determines that a Participant’s Separation 

 

11

 

Payments are
required to be reduced pursuant to this Section 4.5, including Section 4.5(a)(ii) or
(iv), and there is a choice to be made as to which Separation Payments shall be
reduced consistent with maximizing the Value of all Payments to the
Participant, the reduction shall be made first from cash payments under section
4.3(b) and then from payments in the following order: 4.3(c)(ii), then
4.3(c)(i).  All fees and expenses of the
Accounting/Consulting Firm shall be borne solely by the Corporation.  Any Gross-Up Payment, as determined pursuant
to this Section 4.5, shall be paid or caused to be paid by the Corporation
to the Participant within five days of the receipt of the Accounting/Consulting
Firm’s determination, but in no event later than the end of the calendar year
next following the calendar year in which the Participant remits the related
taxes to the taxing authority; provided, however, that the portion, if any, of
any Gross-Up Payment attributable to a Separation Payment shall not be paid
earlier than the first day of the seventh month following the Participant’s
Date of Termination (or the Participant’s earlier death).  Any determination by the
Accounting/Consulting Firm shall be binding upon the Corporation and the
Participant.

 

(ii)           As a result of the
uncertainty in the application of Section 4999 of the Code at the time of
the initial determination by the Accounting/Consulting Firm hereunder, it is
possible that amounts will have been paid or distributed to or for the benefit
of a Participant pursuant to this Policy which should not have been so paid or
distributed (“Overpayment”) or that additional amounts which will have not been
paid or distributed to or for the benefit of a Participant pursuant to this
Policy could have been so paid or distributed (“Underpayment”), in each case,
consistent with the requirements of this Section 4.5.  In the event that the Accounting/Consulting
Firm, based upon the assertion of a deficiency by the Internal Revenue Service
against either an Employer or the Participant which the Accounting/Consulting
Firm believes has a high probability of success determines that an Overpayment
has been made, any such Overpayment paid or distributed to or for the benefit
of a Participant shall be treated for all purposes as a loan to the Participant
which the Participant shall repay to the Employer together with interest at the
applicable federal rate provided for in Section 7872(f)(2) of the
Code; provided, however, that no such loan
shall be deemed to have been made and no amount shall be payable by a
Participant if and to the extent such deemed loan and payment would not either
reduce the amount on which the Participant is subject to tax under Section 1
and Section 4999 of the Code or generate a refund of such taxes or would
be a prohibited loan under Section 402 of the Sarbanes-Oxley Act of 2002,
as amended.  In the event that the Accounting/Consulting
Firm, based upon controlling precedent or substantial authority, determines
that an Underpayment has occurred, any such Underpayment shall be promptly paid
or caused to be paid by the Corporation to or for the benefit of the Participant
together with interest at the applicable federal rate provided for in Section 7872(f)(2) of
the Code, but in no event shall the Underpayment be paid no later than the end
of the first calendar year in which the calculation of the Underpayment is
administratively practicable..

 

12

 

(iii)          The Participant
shall notify the Corporation in writing of any claim by the Internal Revenue
Service that, if successful, could require the payment of the Gross-Up
Payment.  Such notification shall be
given as soon as practicable but no later than ten business days after the
Participant is informed in writing of such claim and shall apprise the
Corporation of the nature of such claim and the date on which such claim is
requested to be paid.  The Participant
shall not pay such claim prior to the expiration of the 30-day period following
the date on which it gives such notice to the Corporation (or such shorter
period ending on the date that any payment of taxes with respect to such claim
is due).  If the Corporation notifies the
Participant in writing prior to the expiration of such period that it desires
to contest such claim, the Participant shall:

 

(A)          give the Corporation
any information reasonably requested by the Corporation relating to such claim,

 

(B)           take such action in
connection with contesting such claim as the Corporation shall reasonably
request in writing from time to time, including, without limitation, accepting
legal representation with respect to such claim by an attorney reasonably
selected by the Corporation,

 

(C)           cooperate with the
Corporation in good faith in order to contest such claim effectively, and

 

(D)          permit the
Corporation to participate in any proceedings relating to such claim;

 

provided,
however, that the Corporation shall bear and pay directly all
costs and expenses (including additional interest and penalties) incurred in
connection with such contest and shall indemnify and hold the Participant
harmless, on an after-tax basis, for any Excise Tax or income tax (including
interest and penalties with respect thereto) imposed as a result of such
representation and payment of costs and expenses; and provided further that
such costs and expenses and indemnification of taxes shall be paid no later
than the end of the calendar year following the calendar year in which the
claim is resolved by the remitting to the applicable taxing authority the taxes
subject of the claim or, where as a result of the claim no taxes are remitted,
in which the audit is completed or there is a final and non-appealable
settlement or other resolution of the claim, except that, in no event shall any
such costs, expenses or taxes to the extent attributable to a Separation
Payment, be paid earlier than the first day of the seventh month after the Date
of Termination (or the Participant’s earlier death)..  Without limitation on the foregoing
provisions of this Section 4.5(b), the Corporation shall control all
proceedings taken in connection with such contest and, at its sole option, may pursue
or forgo any and all administrative appeals, proceedings, hearings and
conferences with the taxing authority in respect of such claim and may, at its
sole option, either direct the Participant to pay the tax claimed and sue for a
refund or contest the claim in any permissible manner, and the Participant
agrees to prosecute such contest to a determination before any administrative
tribunal, in a 

 

13

 

court
of initial jurisdiction and in one or more appellate courts, as the Corporation
shall determine; provided, however, that if the Corporation directs the
Participant to pay such claim and sue for a refund, the Corporation shall
advance the amount of such payment to the Participant, on an interest-free basis
and shall indemnify and hold the Participant harmless, on an after-tax basis,
from any Excise Tax or income tax (including interest or penalties with respect
thereto) imposed with respect to such advance or with respect to any imputed income
with respect to such advance, except that the Corporation shall not direct the
Participant to pay such claim and sue for a refund if such advance would be a
prohibited loan under Section 402 of Sarbanes-Oxley Act of 2002, as
amended; and further provided that (i) any extension of the statute of
limitations relating to payment of taxes for the taxable year of the
Participant with respect to which such contested amount is claimed to be due is
limited solely to such contested amount, and (ii) any such indemnification
for any Excise Tax or income tax shall be made not later than the end of the
calendar year following the calendar year in which such taxes are remitted, and
if attributable to a Separation Payment, in no event earlier than the first day
of the seventh month after the Date of Termination (or the Participant’s
earlier death)..  Furthermore, the
Corporation’s control of the contest shall be limited to issues with respect to
which a Gross-Up Payment would be payable hereunder and the Participant shall
be entitled to settle or contest, as the case may be, any other issue raised by
the Internal Revenue Service or any other taxing authority.

 

(iv)          If, after the
receipt by the Participant of an amount advanced by the Corporation pursuant to
Section 4.5(b)(iii), the Participant becomes entitled to receive any
refund with respect to such claim, the Participant shall (subject to the
Corporation’s complying with the requirements of Section 4.5(b)(iii))
promptly pay to the Corporation the amount of such refund (together with any
interest paid or credited thereon after taxes applicable thereto).  If, after the receipt by the Participant of
an amount advanced by the Corporation pursuant to Section 4.5(b)(iii), a
determination is made that the Participant shall not be entitled to any refund
with respect to such claim and the Corporation does not notify the Participant
in writing of its intent to contest such denial of refund prior to the
expiration of 30 days after such determination, then such advance shall be
forgiven and shall not be required to be repaid and the amount of such advance
shall offset, to the extent thereof, the amount of the Gross-Up Payment
required to be paid.

 

(c)                                 Definitions.  The following terms shall have the following
meanings for purposes of this Section 4.5.

 

(i)            “Excise Tax” shall
mean the aggregate of the excise taxes imposed by Section 4999 of the Code
or by similar state or local law, together with any interest or penalties
imposed with respect to such excise taxes.

 

(ii)           The “Net After-Tax
Amount” of a Payment shall mean the Value of a Payment net of all taxes imposed
on a Participant with respect thereto under 

 

14

 

Sections 1
and 4999 of the Code and applicable state and local law, determined by applying
the highest marginal rates that are expected to apply to the Participant’s
taxable income for the taxable year in which the Payment is made.

 

(iii)          “Parachute Value”
of a Payment shall mean the present value as of the date of the
Change-in-Control or other applicable date of the portion of such Payment that
constitutes a “parachute payment” under Section 280G(b)(2), or under any
similar state or local law, as determined by the Accounting/Consulting Firm for
purposes of determining whether and to what extent the Excise Tax will apply to
such Payment.

 

(iv)          A “Payment” shall
mean any payment or distribution by the Corporation or any affiliates in the
nature of compensation to or for the benefit of a Participant, whether paid or
payable pursuant to this Policy or otherwise, including, without limitation,
the lapse or termination of any restriction on or the vesting or exercisability
of any benefits or right thereto.

 

(v)           The “Safe Harbor
Amount” means the maximum Parachute Value of all Payments that a Participant
can receive without any Payments being subject to the Excise Tax.

 

(vi)          A “Separation
Payment” shall mean a Payment paid or payable pursuant to this Policy
(disregarding this Section 4.5).

 

(vii)         “Value” of a Payment
shall mean the economic present value of a Payment as of the date of
Change-in-Control or other applicable date, as determined by the
Accounting/Consulting Firm using the discount rate required by Section 280G(d)(4) of
the Code.

 

4.6                                Conditions
to Payment Obligations.

 

(a)           Except
as provided in Section 4.6(b) below, the obligations of the
Corporation and the Employers to pay the Separation Benefits and the Gross-Up
Payment and other payments described in Section 4.5 shall be absolute and
unconditional and shall not be affected by any circumstances, including,
without limitation, any set-off, counterclaim, recoupment, defense or other
right which the Corporation or any of its Subsidiaries may have against any
Participant.

 

(b)           Notwithstanding
any other provision of this Policy or any other plan, program, practice or
policy of any Employer:  (i) any
cash Separation Benefits that a Participant becomes entitled to receive under Section 4.3(b) or
Section 4.4 of this Policy shall be reduced (but not below zero) by the
aggregate amount of cash severance, separation, or similar benefits that the
Participant may be entitled to receive under any other plan, program, policy,
contract, agreement or arrangement of any Employer or Subsidiary, except to the
extent the Participant waives his or her right thereto, and by the aggregate
amount of such cash benefits or pay in lieu of notice that the Participant may
be entitled to receive under applicable law; and (ii) any continued
benefits that a Participant becomes entitled to receive under Section 4.3(c) or
Section 4.4 of this Policy shall be provided concurrently (not
consecutively) with any such benefits that such Participant may be entitled to
receive under any other plan, program, policy, contract, agreement or 

 

15

 

arrangement of any Employer or Subsidiary or
applicable law (including without limitation the health continuation coverage
required by Section 4980B of the Code and Section 601 et seq. of the
Employee Retirement Income Security Act of 1974, as amended).  In no event shall a Participant be obligated
to seek other employment or take any other action by way of mitigation of the
amounts payable to a Participant under any of the provisions of this Policy,
nor shall the amount of any payment hereunder be reduced by any compensation
earned by a Participant as a result of employment by another employer, except
as specifically provided in Section 4.3(c)(i) or Section 4.4 (by
incorporation of Section 4.3(c)(i)).

 

ARTICLE V

PARTICIPATING
EMPLOYERS

 

With the consent of the Board, this Policy may be
adopted by any Subsidiary of the Corporation. 
Upon such adoption, the Subsidiary shall become an Employer hereunder
and the provisions of the Policy shall be fully applicable to the Employees of
that Subsidiary who are Participants pursuant to Section 3.1.

 

ARTICLE VI

SUCCESSOR
TO CORPORATION

 

This Policy shall bind any successor of the
Corporation or other Employer, its assets or its businesses (whether direct or
indirect, by purchase, merger, consolidation or otherwise), in the same manner
and to the same extent that the Corporation or Employer would be obligated
under this Policy if no succession had taken place.

 

In the case of any transaction in which a successor
would not by the foregoing provision or by operation of law be bound by this
Policy, the Corporation shall require such successor expressly and
unconditionally to assume and agree to perform the Corporation’s or Employer’s
obligations under this Policy, in the same manner and to the same extent that
the Corporation or Employer would be required to perform if no such succession
had taken place.  The term “Corporation,”
as used in this Policy, shall mean the Corporation as hereinbefore defined and
any successor or assignee to the business or assets, which by reason hereof,
becomes bound by this Policy.

 

ARTICLE VII

DURATION,
AMENDMENT AND TERMINATION

 

7.1                                Amendment
and Termination.

 

(a)                                 Subject
to the provisions of Article VII, the Policy may be amended by the Board
at any time or from time to time and may be terminated by the Board at any
time. To the extent applicable, such amendment or termination shall comply with
section 409A of the Code. No amendment or termination, however, may adversely
affect the rights of any Participant without the Participant’s written consent
if such person (i) is then receiving Separation Benefits or other payments
under the Policy, (ii) upon termination of employment would become
entitled to receive Separation Benefits or other payments under the Policy on
account of a prior event or occurrence described in Section 4.2(b), or (iii) is
entitled to receive Separation Benefits or other payments under the Policy on
account of a prior termination of employment.

 

16

 

(b)           Notwithstanding
the provisions of Section 7.1(a), during the period commencing on October 22,
2003 and ending at the close of business on October 21, 2006 (the “Term”),
the Policy may not be amended or terminated in any way, whether or not a
Change-in-Control has occurred, that would adversely affect the rights of any
person, without such person’s written consent; provided, however, that on October 22,
2004 and on each October 22 thereafter, the Term shall automatically be
extended for an additional year unless, not later than the immediately
preceding July 22, the Corporation shall give notice to Participants that
it does not wish to have the Term extended; and provided further, however, that
if a Change-in-Control shall have occurred during the Term, the Term shall
expire no earlier than the second anniversary of the date on which the
Change-in-Control occurred

 

7.2                                 Duration.  Notwithstanding Section 7.1, this Policy
shall continue in full force and effect and shall not terminate or expire until
after all Participants who become entitled to any payments hereunder shall have
received such payments in full and all payments and adjustments required to be
made pursuant to Section 4.5 have been made.

 

7.3                                 Form of
Amendment.  The form of any amendment
of the Policy shall be a written instrument signed by a duly authorized officer
or officers of the Corporation, certifying that the amendment has been approved
by the Board.

 

ARTICLE VIII

MISCELLANEOUS

 

8.1                                 Employment
Status.  This Policy does not
constitute a contract of employment or impose on the Participant or the
Participant’s Employer any obligation to retain the Participant as an Employee,
to change the status of the Participant’s employment, or to change the
Corporation’s policies or those of its Subsidiaries regarding termination of
employment.

 

8.2                                 Claim
Procedure.  If an Employee or former
Employee makes a written request alleging a right to receive benefits under
this Policy or alleging a right to receive an adjustment in benefits being paid
under the Policy, the Corporation shall treat it as a claim for benefit.  All claims for benefit under the Policy shall
be sent to the Human Resources Department of the Corporation and must be
received within 30 days after termination of employment or, if earlier, within
30 days after the date as of which the alleged right to receive benefits
arises.  If the Corporation determines
that any individual who has claimed a right to receive benefits, or different
benefits, under the Policy is not entitled to receive all or any part of the
benefits claimed, it will inform the claimant in writing of its determination
and the reasons therefor in terms calculated to be understood by the
claimant.  The notice will be sent within
90 days of the claim unless the Corporation determines additional time, not
exceeding 90 days, is needed.  The notice
shall make specific reference to the pertinent Policy provisions on which the
denial is based, and describe any additional material or information is
necessary.  Such notice shall, in addition,
inform the claimant what procedure the claimant should follow to take advantage
of the review procedures set forth below in the event the claimant desires to
contest the denial of the claim, including a statement of the right to bring a
civil suit under Section 502(a) of the Employee Retirement Income
Security Act of 1974, as amended (“ERISA”). 
The claimant may within 60 days thereafter submit in writing to the
Corporation a notice that the claimant contests the denial of his or her claim
by the Corporation and desires a further review.  The notice may include comments, 

 

17

 

documents, records and other information relating to
the claim.  The claimant shall be
provided, upon request and free of charge, reasonable access to, and copies of,
all documents, records and other information relevant to the claim for
benefits.  The review will take into
account all comments, documents, records and other information submitted
relating to the claim, without regard to whether such information was submitted
or considered in the initial determination. 
The Corporation will render its final decision with specific reasons
therefor in writing and will transmit it to the claimant within 60 days of the
written request for review, unless the Corporation determines additional time,
not exceeding 60 days, is needed, and so notifies the Participant.  In the case of an adverse benefit
determination, the decision shall set forth, in a manner calculated to be
understood by the claimant, the specific reasons for the adverse determination,
reference to the specific Policy provisions on which the determination is
based, a statement that the claimant is entitled to receive upon request and
free of charge, reasonable access to, and copies of, all documents, records,
and other information relevant to the claim for benefits, and a statement of
the claimant’s right to bring an action under Section 502(a) of
ERISA.

 

8.3                                 Validity
and Severability.  The invalidity or
unenforceability of any provision of the Policy shall not affect the validity
or enforceability of any other provision of the Policy, which shall remain in
full force and effect, and any prohibition or unenforceability in any
jurisdiction shall not invalidate or render unenforceable such provision in any
other jurisdiction.

 

8.4                                 Governing
Law.  The validity, interpretation,
construction and performance of the Policy shall in all respects be governed by
the laws of Minnesota, without reference to principles of conflict of law, except
to the extent pre-empted by federal law. To the extent applicable, the Plan
sponsor intends the Policy to comply with Section 409A of the Code.

 

8.5                                 Withholding.  The Corporation or other applicable Employer
may withhold from any and all amounts payable under this Policy all federal,
state, local and foreign taxes that may be required to be withheld by
applicable laws or regulations.

 

18

 

	
   

  	
  Xcel Energy Inc.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  Richard C. Kelly

  
	
   

  	
   

  	
  Chairman and CEO

  

 

19

 

SCHEDULE I

 

Participants

 

	
  Employee Name

  	
   

  	
  Tier

  	
   

  	
  Severance Multiple

  	
   

  	
  Change-in-Control

  Multiple

  	
   

  
	
  Fowke
  III, Benjamin

  	
   

  	
  1

  	
   

  	
  1

  	
   

  	
  3

  	
   

  
	
  Gogel,
  Raymond

  	
   

  	
  1

  	
   

  	
  1

  	
   

  	
  3

  	
   

  
	
  Hart,
  Cathy

  	
   

  	
  1

  	
   

  	
  1

  	
   

  	
  3

  	
   

  
	
  Kelly,
  Richard

  	
   

  	
  1

  	
   

  	
  1

  	
   

  	
  3

  	
   

  
	
  Madden,
  Teresa

  	
   

  	
  2

  	
   

  	
  1

  	
   

  	
  2

  	
   

  
	
  Sparby,
  David

  	
   

  	
  2

  	
   

  	
  1

  	
   

  	
  2

  	
   

  
	
  Tyson
  II, George

  	
   

  	
  2

  	
   

  	
  1

  	
   

  	
  2

  	
   

  
	
  Wilks,
  David

  	
   

  	
  1

  	
   

  	
  1

  	
   

  	
  3

  	
   

  
	
  Bonavia,
  Paul

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  *

  	
   

  
	
  Connelly,
  Michael

  	
   

  	
  1

  	
   

  	
  1

  	
   

  	
  3

  	
   

  

 

*              Paul Bonavia shall not be a
Participant in the Policy for purposes of entitlement to Separation Benefits in
accordance with Section 4.3 by reason of ceasing to be an Employee in
circumstances as provided in Section 4.2(a), but shall be a Participant
for purposes of the remaining provisions of the Policy. Notwithstanding any
other provision of the Policy to the contrary, including but not limited to
Sections 4.2, 4.3 or 4.4, a cash payment made under section 4.4 (by
incorporation of Section 4.3(b)) shall not be paid to Mr. Paul
Bonavia until the first day of the seventh month following his date of
termination or on his earlier death.

 

 

EXHIBIT A

 

FORM OF RELEASE AGREEMENT

 

THIS AGREEMENT is entered into
this _____ day of ____________, 20__ by and between Xcel Energy Inc. (the “Company”),
a Minnesota corporation, and ________________________ (the “Participant”).

 

WHEREAS, the Participant has
become entitled to receive Separation Benefits under the Xcel Energy Senior
Executive Severance and Change-in-Contract Policy (the “Policy”) on the
condition that the Participant enter into this Release Agreement; and

 

NOW, THEREFORE, in consideration
of the Covenant Consideration, the Participant, intending to be legally bound,
agrees as follows:

 

1.             Acknowledgment.

 

(a)           The Participant
understands and agrees that, in addition to the Participant’s below-described
exposure to the Company’s Confidential Information or Trade Secrets, the
Participant may, in his capacity as an employee, at times meet with the Company’s
customers and suppliers, and that as a consequence of using and associating
with the Company’s name, goodwill, and professional reputation, the Participant
will be in a position to develop personal and professional relationships with
the Company’s past, current, and prospective customers and suppliers. The
Participant further acknowledges that during the course and as a result of
employment by the Company, the Participant may be provided certain specialized
training or know-how.  The Participant
understands and agrees that this goodwill and reputation, as well as the
Participant’s knowledge of Confidential Information or Trade Secrets and
specialized training and know-how, could be used unfairly in competition
against the Company.

 

(b)                                 Accordingly,
the Participant agrees that during the period of one year after the Date of
Termination (the “Covenant Period”), the Participant shall not:

 

(i)            Cause or attempt to cause any
existing or prospective customer, client, or account, who then has a
relationship with the Company for current or prospective business, to divert,
terminate, limit or in any manner modify, or fail to enter into any actual or
potential business relationship with the Company; and the Participant and the
Company agree that this clause (i) is reasonably enforced with reference
to any geographic area applicable to such relationships with the Company; and

 

(ii)           Directly or indirectly solicit,
employ or conspire with others to employ any of the Company’s employees; the
term “employ” for purposes of this clause (ii) meaning to enter into an
arrangement for services as a full-time or part-time employee, independent
contractor, consultant, agent or otherwise; and the Participant and the Company
agree that this clause (ii) is reasonably enforced as to any geographic
area.

 

 

2.             Return of Property.  The Participant agrees that upon the Date of
Termination, the originals and all copies of any and all documents (including
computer data, diskettes, programs, or printouts) that contain any customer
information, financial information, product information, or other information
that in any way relates to the Company, its products or services, its clients,
its suppliers, or other aspects of its business that are in the Participant’s
possession shall be immediately returned to the Company.  The Participant further agrees to not retain
any summary of such information.

 

3.             Confidential Information/Trade
Secrets.

 

(a)           The Participant
acknowledges that during the course and as a result of his or her employment,
the Participant may receive or otherwise have access to, or contribute to the
production of, Confidential Information or Trade Secrets.  “Confidential Information or Trade Secrets”
means information that is proprietary to or in the unique knowledge of the
Company (including information discovered or developed in whole or in part by
the Participant); the Company’s business methods and practices; or information
that derives independent economic value, actual or potential, from not being
generally known to, and not being readily ascertainable by proper means by,
other persons who can obtain economic value from its disclosure or use, and is
the subject of efforts that are reasonable under the circumstances to maintain
its secrecy. It includes, among other things, strategies, procedures, manuals,
confidential reports, lists of clients, customers, suppliers, past, current or
possible future products or services, and information concerning research,
development, accounting, marketing, selling or leases and the prices or charges
paid by the Company’s customers to the Company, or by the Company to its
suppliers.  The Participant acknowledges
his continuing agreement to abide by the terms of the Company’s Code of
Conduct.

 

(b)           The Participant
further acknowledges and appreciates that any Confidential Information or Trade
Secret constitutes a valuable asset of the Company and that the Company intends
any such information to remain secret and confidential. The Participant
therefore specifically agrees that except to the extent required by the
Participant’s duties to the Company or as permitted by the express written
consent of the  Board of Directors, the
Participant shall never, either during employment with the Company or at any
time thereafter, directly or indirectly use, discuss or disclose any
Confidential Information or Trade Secrets of the Company or otherwise use such
information to his or her own or a third party’s benefit.

 

4.             Consideration.  The Participant and the Company agree that
the above provisions of this Agreement are reasonable and necessary for the
protection of the Company and its business. 
In exchange for the Participant’s agreement to be bound by the terms of
this Agreement, the Company has provided the Participant the Separation
Benefits under the Policy. The Participant accepts and acknowledges the
adequacy of such consideration for this Agreement.

 

5.             Remedies for Breach.  The Participant acknowledges that a breach of
the above provisions of this Agreement will cause the Company irreparable harm
that would not be fully remedied by monetary damages.  Accordingly, the Participant agrees that the
Company shall, in addition to the requirement to return the Covenant
Consideration to the Company and any relief afforded by law, be entitled to
injunctive relief.  The Participant
agrees that both 

 

 

damages at law and injunctive relief shall be proper
modes of relief and are not to be considered alternative remedies.

 

6.             Release.

 

(a)           In consideration of
the Separation Benefits, the Participant does hereby fully and completely
release and waive any and all claims, complaints, causes of action or demands
of whatever kind which the Participant has or may have against the Company and
its predecessors, successors, subsidiaries and affiliates and all officers,
employees and agents of those persons and companies arising out of any actions,
conduct, decisions, behavior or events occurring to the date of his or her
execution of this Release of which the Participant is or has been made aware or
has been reasonably put on notice.

 

(b)           The Participant
understands and accepts that this release specifically covers but is not
limited to any and all claims, complaints, causes of action or demands of
whatever kind which the Participant has or may have against the
above-referenced released parties relating in any way to the terms, conditions
and circumstances of his or her employment to date, whether based on statutory,
regulatory or common law claims for employment discrimination, including but
not limited to race, color, religion, sex, age or reprisal discrimination,
arising under the Federal Civil Rights Act of 1964, as amended, the Civil
Rights Act of 1991, the Americans with Disabilities Act,  Executive Order 11246, the Age Discrimination
in Employment Act, as amended, the Colorado Civil Rights Act, Minnesota Human
Rights Act, or any other administrative order, federal or state statute or
local ordinance, wrongful discharge, equal pay claims, breach of contract,
breach of any express or implied promise, misrepresentation, fraud, reprisal,
retaliation, breach of public policy, infliction of emotional distress,
defamation, promissory estoppel, invasion of privacy, negligence, or any other
theory, whether legal or equitable; except that this release will not impair
any existing rights the Participant may have under any presently existing
pension, retirement or employee benefit plan of the Company.

 

(c)           By signing below,
the Participant acknowledges that he or she fully understands and accepts the
terms of this release, and represents and agrees that his or her signature is
freely, voluntarily and knowingly given and that he or she has been provided a
full opportunity to review and reflect on the terms of this release for at
least 21days and to seek the advice of legal
counsel of his or her choice, which advice the Participant has been encouraged
to obtain.

 

7.             The Participant’s Acknowledgment
of Review; Right to Revoke.

 

(a)           The Participant
represents that the Participant has carefully read and fully understands all
provisions of this Agreement and that the Participant has had a full
opportunity to review this Agreement before signing and to have all the terms
of this Agreement explained to him or her by counsel.

 

 

(b)                                This
Agreement may be revoked by the Participant by written notice given to

 

Michael C. Connelly

Vice President and
General Counsel

Xcel Energy Inc.

414 Nicollet Mall

 

Minneapolis, MN 55401

 

within 15 business days after being signed by the
Participant.

 

8.                                     General
Provisions.  The Participant and
the Company acknowledge and agree as follows:

 

(a)                                 This
Agreement contains the entire understanding of the parties with regard to all
matters contained herein.  There are no
other agreements, conditions, or representations, oral or written, express or
implied, with regard to such matters;

 

(b)                                This
Agreement may be amended or modified only by a writing signed by both parties;

 

(c)                                 Waiver
by either the Company or the Participant of a breach of any provision, term or
condition hereof shall not be deemed or construed as a further or continuing
waiver thereof or a waiver of any breach of any other provision, term or
condition of this Agreement;

 

(d)                                This
Agreement shall inure to the benefit of and be binding upon the Company and its
successors and assigns.  The Company
shall require any successor (whether direct or indirect, by purchase, merger,
consolidation or otherwise) to all or substantially all of the business and/or
assets of the Company expressly to assume and agree to perform this Agreement
in the same manner and to the same extent that the Company would have been
required to perform it if no such succession had taken place.  As used in this Agreement, “the Company”
shall mean the Company and its affiliates or assigns and any such successor
that assumes and agrees to perform this Agreement, by operation of law or
otherwise.  No assignment of this
Agreement shall be made by the Participant, and any purported assignment shall
be null and void;

 

(e)                                 If
any court finds any provision or part of this Agreement to be unreasonable, in
whole or in part, such provision shall be deemed and construed to be reduced to
the maximum duration, scope or subject matter allowable under applicable
law.  Any invalidation of any provision
or part of this Agreement will not invalidate any other part of this Agreement;

 

(f)                                   This
Agreement will be construed and enforced in accordance with the laws and legal
principles of the State of Minnesota. 
The Participant consents to the jurisdiction of the Minnesota courts for
the enforcement of this Agreement; and

 

 

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

 

THIS AGREEMENT IS INTENDED TO BE A LEGALLY
BINDING DOCUMENT FULLY ENFORCEABLE IN ACCORDANCE WITH ITS TERMS.  IF IN DOUBT, SEEK COMPETENT LEGAL ADVICE
BEFORE SIGNING.

 

 

	
   

  	
   

  	
   

  
	
  (Participant)

  	
   

  	
  Date

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  XCEL ENERGY INC.

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By

  	
   

  	
   

  	
  Date

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Its

  	
   

  	
   

  	
   

  

 

 

The Participant acknowledges that he or she has
received a copy of this Agreement.

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