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

 

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	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

 

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	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

 

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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

 

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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.

 

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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;

 

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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.

 

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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.

 

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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.

 

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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.

 

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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