EXHIBIT 2.05
EMPLOYEE MATTERS AGREEMENT
THIS EMPLOYEE MATTERS AGREEMENT (this "Agreement") is entered
into as of December 5, 2003, between Xcel Energy Inc. ("Xcel"), a Minnesota
corporation, and NRG Energy, Inc. ("NRG"), a Delaware corporation.
WHEREAS, on May 14, 2003, NRG and certain related entities
(the "Debtors") filed voluntary petitions for relief under Section 301 of Title
11, United States Code, 11 U.S.C. Section 101, et seq., as amended (the
"Bankruptcy Code"), in the United States Bankruptcy Court for the Southern
District of New York (the "Bankruptcy Court");
WHEREAS, on October 10, 2003, a joint plan of reorganization
of the Debtors (the "Plan of Reorganization") was filed with the Bankruptcy
Court, including a proposed settlement between Xcel and NRG (the "Settlement
Agreement");
WHEREAS, the Settlement Agreement contemplates that the Plan
of Reorganization would approve an employee matters agreement pursuant to which
various obligations with respect to employees and benefit plans would be
allocated between Xcel and NRG as of the "Effective Date" as defined in the Plan
of Reorganization (the "Effective Date"); and
WHEREAS, in order to carry out the intent of the Settlement
Agreement, Xcel and NRG desire to enter into this Agreement.
NOW, THEREFORE, in consideration of the foregoing and the
covenants and agreements set forth below, the parties hereto agree as follows:
ARTICLE I
DEFINITIONS
Wherever used in this Agreement, capitalized terms used herein
and not otherwise defined shall have the respective meanings assigned to them in
the Settlement Agreement. The singular shall include the plural, unless the
context indicates otherwise. Headings of sections are used for convenience of
reference only, and in case of conflict, the text of this Agreement, rather than
such headings, shall control.
ARTICLE II
XCEL ENERGY PENSION PLAN
2.01 Individuals employed by NRG or any NRG Subsidiary that is a
participating employer in the Xcel Energy Pension Plan (the
"Pension Plan") as of May 13, 2003 (such individuals being
hereinafter referred to as the "Employees") will
continue to be eligible to participate in the Pension Plan
until the Effective Date in accordance with the terms thereof,
as in effect from time to time, applicable to Employees,
including the benefit formulas thereunder in effect as of May
13, 2003, and NRG and any applicable NRG Subsidiary will
continue until the Effective Date as participating employers
in the Pension Plan.
2.02 Prior to the Effective Date, NRG and Xcel will take such
action as may be determined by Xcel to be necessary or
desirable to provide that as of the Effective Date (i) NRG and
any applicable NRG Subsidiary will cease to be participating
employers in the Pension Plan, (ii) the Employees will no
longer actively participate in the Pension Plan, (iii) no
Employee who is not a participant in the Pension Plan
immediately prior to the Effective Date will be eligible to
participate in the Pension Plan and (iv) the Employees'
benefits under the Pension Plan will be frozen as of the
Effective Date (except as set forth in Section 2.03 below) and
Employees will cease to accrue further benefits under the
Pension Plan as of the Effective Date.
2.03 With respect to Employees who, as of the Effective Date, both
are employed by NRG or any NRG Subsidiary and are participants
in the Pension Plan (the "NRG Participants"), the Pension Plan
will provide that service, calculated in accordance with the
terms of the Pension Plan, with NRG or any NRG Subsidiary from
and after the Effective Date will be credited (i) for vesting
purposes under the Pension Plan for NRG Participants not fully
vested under the Pension Plan because of a partial termination
of the Pension Plan as described below or otherwise, and (ii)
for purposes of eligibility for entitlement for commencement
or receipt of benefits under the Pension Plan, including,
without limitation, for eligibility for commencement or
receipt of any early retirement benefits or supplement
thereunder. Service with NRG or any NRG Subsidiary on and
after the Effective Date will not be credited under the
Pension Plan for any other purpose, including, without
limitation, benefit accrual purposes. To the extent a partial
termination, within the meaning of Section 411(d)(3) of the
Internal Revenue Code of 1986, as amended (the "Code"), of the
Pension Plan would occur as of the Effective Date, whether as
a result of Employees ceasing to be employed by Xcel and its
subsidiaries or otherwise, such Employees will become fully
vested as of the Effective Date in their frozen benefit under
the Pension Plan as and to the extent provided by Section
411(d)(3) of the Code.
2.04 The frozen benefits to which Employees are entitled under the
terms of the Pension Plan, as required to be modified by this
Agreement, will be paid to them as and when provided in the
Pension Plan. The obligation for such benefits will remain
with the Pension Plan, and Xcel and the Pension Plan will have
the sole responsibility to fund and provide such benefits.
2.05 From and after the date hereof, Xcel shall continue to
administer, or cause to be administered, the Pension Plan in
accordance with its terms as in effect from time to time and
applicable law, and Xcel or its delegates shall have the sole
and absolute discretion and authority to construe and
interpret the Pension Plan, as set
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forth therein. Xcel shall not, without first consulting with
NRG, amend any material feature of the Pension Plan, except to
the extent such amendment (i) would not adversely affect any
benefits of the Employees under the Pension Plan or (ii) may
be necessary or appropriate, as determined by Xcel, to comply
with applicable law and rulings or regulations thereunder.
2.06 From and after the date hereof and through the Effective Date,
NRG shall perform, and shall cause each of the applicable NRG
Subsidiaries to perform, with respect to its participation in
the Pension Plan as a participating employer, the duties of a
participating employer as set forth in the Pension Plan
including (without limitation): (i) assisting in the
administration of benefit payments, to the extent requested by
the administrator of the Pension Plan; (ii) cooperating fully
with Pension Plan auditors and Xcel benefit personnel and
benefit vendors; and (iii) preserving the confidentiality of
all financial arrangements Xcel has or may have with any
vendors, administrators, trustees or any other entity or
individual with whom Xcel has entered into an agreement
relating to the Pension Plan.
ARTICLE III
NON-QUALIFIED RETIREMENT PLANS
3.01 With respect to the Xcel Energy Inc. Nonqualified Deferred
Compensation Plan and the Xcel Energy Inc. Nonqualified
Pension Plan (collectively, the "NQRPs"), NRG and Xcel will
determine prior to the Effective Date the proportion of the
obligations owing thereunder as of the Effective Date to
individuals employed by NRG or any NRG Subsidiary as of the
date hereof ("NRG NQRP Participants") that is legally
allocable to Xcel by virtue of the NRG NQRP Participants'
prior service with Xcel and/or Northern States Power Company
(the "Xcel NQRP Amount"). To the extent Xcel has not
previously satisfied such obligation, Xcel will maintain
responsibility for payment of the Xcel NQRP Amount to which
the NRG NQRP Participants become entitled under the NQRPs, and
NRG will have no obligation or liability for payment of such
amount.
3.02 Any excess of (i) the total amount owing to NRG NQRP
Participants under the NQRPs over (ii) the Xcel NQRP Amount
(the "NRG NQRP Amount") will be reinstated or replaced by NRG
under a similar non-qualified retirement plan or plans,
developed by NRG in consultation with the Global Steering
Committee and the Noteholder Group, that will be subject to
approval as part of the Plan of Reorganization. NRG will be
solely responsible for payment of the NRG NQRP Amount, and
Xcel will have no obligation or liability for payment of such
amount under the NQRPs or any replacement plan.
ARTICLE IV
PARTICIPANT INFORMATION
NRG will provide, or cause to be provided, to Xcel on a timely
basis all participant information that is necessary or appropriate for the
efficient and accurate
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administration of the Pension Plan with respect to Employees, including, without
limitation, information necessary or appropriate to calculate service, as
defined in the Pension Plan, with NRG or any NRG Subsidiary from and after the
Effective Date and information relating to the termination of employment with
NRG and the NRG Subsidiaries after the Effective Date for any reason. Xcel and
NRG shall share, or cause to be shared, all information regarding the NQRPs and
NRG NQRP Participants to enable Xcel and NRG to determine the Xcel NQRP Amount
and the NRG NQRP Amount prior to the Effective Date.
ARTICLE V
INDEMNIFICATION
5.01 NRG shall, for itself and as agent for each NRG Subsidiary,
indemnify and hold Xcel and its directors, officers,
employees, affiliates, agents and other representatives
harmless from any liability or expense (including reasonable
attorneys' fees) resulting from any claims of any nature that
relate to, arise out of, or result from any of the following:
(i) any acts or omissions or alleged acts or omissions by
or on behalf of NRG or any NRG Subsidiary as
participating employers under the Pension Plan;
(ii) any acts or omissions or alleged acts or omissions by
or on behalf of NRG or any NRG Subsidiary under or
with respect to any plan sponsored or maintained by
NRG or NRG Subsidiary that was merged into the
Pension Plan; or
(iii) any breach by NRG of this Agreement.
5.02 Xcel shall indemnify and hold NRG and its directors, officers,
employees, affiliates, agents and other representatives
harmless from any liability or expense (including reasonable
attorneys' fees) resulting from any claims of any nature that
relate to, arise out of, or result from any of the following:
(i) any acts or omissions or alleged acts or omissions by
or on behalf of Xcel as sponsor of the Pension Plan
except for any such acts or omissions resulting from
acts or omissions described in Section 5.01(i), (ii)
and (iii); or
(ii) any breach by Xcel of this Agreement.
ARTICLE VI
MISCELLANEOUS
6.01 This Agreement shall not be assigned by any of the parties
hereto without the prior written consent of the other party
hereto. This Agreement is intended to bind and inure to the
benefit of the parties hereto and their respective successors
and assigns.
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6.02 It is acknowledged and agreed by each of the parties hereto
that should any provisions of this Agreement be declared or be
determined to be illegal or invalid by final determination of
any court of competent jurisdiction after the Effective Date,
the validity of the remaining parts, terms or provisions of
this Agreement shall not be affected thereby, and the illegal
or invalid part, term or provision shall be deemed not to be a
part of this Agreement.
6.03 The rights and obligations arising under this Agreement shall
be governed by, and construed and enforced in accordance with,
the laws of the State of Minnesota.
6.04 This Agreement may be executed in one or more counterparts,
each of which shall be deemed an original and all of which
shall constitute one and the same agreement. Delivery of an
executed counterpart of a signature page by facsimile shall be
effective as delivery of a manually executed counterpart.
IN WITNESS WHEREOF, each of the parties hereto has caused this
Agreement to be executed and delivered by its duly authorized officers as of the
date first written above to be effective upon the Effective Date.
XCEL ENERGY INC.
By: /s/ RICHARD C. KELLY
Name: Richard C. Kelly
Title: President and Chief Operating Officer
NRG ENERGY, INC.
By: /s/ SCOTT J. DAVIDO
Name: Scott J. Davido
Title: Chairman, SVP and General Counsel
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