EXHIBIT 10.44
NRG EXECUTIVE OFFICER AND
KEY PERSONNEL
SEVERANCE PLAN
WILLIAM PIEPER
CONTENTS
<Table>
Article 1. Establishment, Term, and Purpose .................................. 1
Article 2. Definitions ....................................................... 1
Article 3. Participation ..................................................... 4
Article 4. Severance Benefits Other Than Upon Change in Control .............. 4
Article 5. Severance Benefits Upon Change in Control ......................... 6
Article 6. Excise Tax ........................................................ 7
Article 7. Outplacement Assistance ........................................... 9
Article 8. The Company's Payment Obligation .................................. 9
Article 9. Withholding ....................................................... 9
Article 10. Non-Competition Other Than Upon Change in Control ................. 9
Article 11. Non-Disparagement .................................................11
Article 12. Successors and Assignment .........................................11
Article 13. Miscellaneous .....................................................11
</Table>
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NRG ENERGY, INC.
EXECUTIVE OFFICER AND KEY PERSONNEL SEVERANCE PLAN
ARTICLE 1. ESTABLISHMENT, TERM, AND PURPOSE
1.1 ESTABLISHMENT OF THE PLAN. NRG Energy, Inc., (hereinafter referred to
as the "Company"), hereby establishes a seVerance plan to be known as the NRG
Executive Officer and Key Personnel Severance Plan (the "Plan"). The Plan
provides severance benefits to certain executive officers and key personnel (the
"Participants") of the Company upon a termination of employment from the
Company, including termination of employment as a result of a Change in Control
of the Company. The Plan is intended to supersede any and all plans, programs,
or agreements providing for severance-related payments. This specifically
includes, but is not limited to, the NRG and NSP Employment Agreements for
Executive Officers which the Company has previously terminated.
1.2 TERM OF THE PLAN. This plan shall be effective on the Effective Date
and shall remain in effect until the third anniversary of the Effective Date.
This plan shall thereafter automatically be renewed for successive one-year
terms each commencing on an Effective Date anniversary and ending on the day
immediately preceding the succeeding Effective Date anniversary.
Notwithstanding the foregoing, the Company may at any time and in its sole
discretion terminate this Plan at the end of the initial term or any renewal
term by giving the Participant six (6) months written notice prior to the end of
a term.
1.3 PURPOSE OF THE PLAN. The purpose of the Plan is to provide certain
executive officers and key personnel of the Company financial security in the
event of a termination of employment from the Company, including termination of
employment as a result of a Change in Control of the Company.
ARTICLE 2. DEFINITIONS
Whenever used in this Plan, the following terms shall have the meanings
set forth below:
2.1 "BASE SALARY" means an amount equal to the Participant's base annual
salary as of the date of a termination. For this purpose, "Base Salary" shall
not include bonuses, long-term incentive compensation, or any remuneration other
than base annual salary.
2.2 "BENEFICIAL OWNER" shall have the meaning ascribed to such term in
Rule 13d-3 of the General Rules and Regulations under the Exchange Act.
2.3 "BENEFICIARY" means the persons or entities designated or deemed
designated by the Participant pursuant to Section 13.1 hereof.
2.4 "BOARD" means the Board of Directors of the Company.
2.5 "CAUSE" shall mean the occurrence of any one or more of the following
events:
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(a) The willful (as defined in 2.5[c]) and continued failure by the
Participant to substantially perform his normal duties (other than
any such failure resulting from the Participant's Disability), after
a written demand for substantial performance, signed by the CEO or
the Participant's immediate supervisor, is delivered to the
Participant, that identifies the manner in which the Participant has
not substantially performed his duties, and the Participant has
failed to remedy the situation within thirty (30) business days of
receiving such notice; or
(b) The Participant's conviction for committing an act of fraud,
embezzlement, theft, or other act constituting a felony; or the
Participant's violation of the Company Code of Conduct; or
(c) The engaging by the Participant in willful, reckless or grossly
negligent conduct materially and demonstrably injurious to the
Company. However, no act, or failure to act on the Participant's
part, shall be considered "willful, reckless or grossly negligent"
unless done, or omitted to be done, by the Participant not in good
faith and without reasonable belief that his action or omission was
in the best interest of the Company.
2.6 "CODE" means the United States Internal Revenue Code of 1986, as
amended.
2.7 "CHANGE IN CONTROL" means a Change in Control as defined in the NRG
Energy, Inc. 2000 Long-Term Incentive Compensation Plan, which may be amended
from time to time as directed by the Board of Directors.
2.8 "COMMITTEE" means the Compensation Committee of the Board, or any
other committee appointed by the Board to perform the functions of the
Compensation Committee.
2.9 "COMPANY" means NRG Energy, Inc., a Delaware corporation (including
any and all subsidiaries), or any successor thereto as provided in Article 12
herein.
2.10 "DISABILITY" means the definition provided in the NRG Energy, Inc.
2000 Long-Term Incentive Compensation Plan.
2.11 "EFFECTIVE DATE" means January 15, 2001.
2.12 "EFFECTIVE DATE OF TERMINATION" means the date on which a termination
occurs which triggers the payment of Severance Benefits or Change in Control
Severance Benefits hereunder.
2.13 "EXCHANGE ACT" means the United States Securities Exchange Act of
1934, as amended.
2.14 "GOOD REASON" means, without the Participant's express written
consent, the occurrence of any one or more of the following:
(a) Any material reduction in the Participant's Base Salary or Targeted
Bonus Opportunity below the amount in effect as of the Change in
Control Effective Date (including all increases following the Change
in Control Effective Date).
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(b) Any significant reduction in the Participant's benefits package,
except in the case of a reduction, which similarly applies to all
executives on a nondiscriminatory basis.
(c) Any material reduction in the Participant's long-term incentive
opportunity with the Company.
(d) Any assignment of new duties that requires the Participant to
relocate his domicile more than fifty (50) miles from the
Participant's current work location.
(e) Any dissolution or liquidation of the Company.
(f) Any significant reduction or diminution in the duties,
responsibilities, or position of the Participant from that in
effect, as of the Effective Date (including subsequent increases in
duties, responsibilities, or position), provided that the sale of a
Company division will not automatically be deemed to result in the
significant reduction or diminution in the duties, responsibilities,
or position of the Participant without a specific showing of such
reduction or diminution.
(g) Any significant increase in responsibility without corresponding
compensation.
The Participant's right to terminate employment for Good Reason shall not
be affected by the Participant's incapacity due to Disability. The
Participant's continued employment shall not constitute consent to, or a
waiver of rights with respect to, any circumstance constituting Good
Reason herein.
2.15 "NOTICE OF TERMINATION" shall mean a written notice which shall
indicate the specific termination provision in this Plan relied upon, and shall
set forth in reasonable detail the facts and circumstances claimed to provide a
basis for termination of the Participant's employment under the provision so
indicated.
2.16 "PARTICIPANT" means the executive officers (other than the CEO) and
key personnel as designated by the CEO.
2.17 "PERSON" shall have the meaning ascribed to such term in Section
3(a)(9) of the Exchange Act and used in Sections 13(d) and 14(d) thereof,
including a "group" as defined in Section 13(d).
2.18 "PLAN" means NRG Executive Officer and Key Personnel Severance Plan.
2.19 "RETENTION PERIOD" means the period of time beginning on the
Effective Date of this Plan, and ending on the earlier to occur of: (a) the
termination of the Plan; or (b) six (6) months prior to the effective date of a
Change in Control. The retention period is only applicable in the event of
general severance.
2.20 "RETIREMENT" means retirement as defined in the applicable NRG
Energy, Inc. and/or NSP/Xcel programs in which the Participant is eligible,
which may be amended from time to time as directed by the Board of Directors.
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2.21 "SEVERANCE BENEFITS" means the payment of severance compensation as
provided in Article 4 or 5 herein.
ARTICLE 3. PARTICIPATION
All executive officers and key personnel as defined by CEO shall be
eligible to participate in the Plan.
ARTICLE 4. SEVERANCE BENEFITS OTHER THAN UPON CHANGE IN CONTROL
4.1 RIGHT TO SEVERANCE BENEFITS. Subject to the provisions herein, the
Participant shall be entitled to receive from the Company Severance Benefits as
described in Section 4.2 herein, if, during the Retention Period, the
Participant's employment with the Company shall be terminated by the Company
without Cause or if the Participant terminates employment:
(a) within 3 months of a material change or reduction in the
Participant's job responsibilities with the Company, unless such
action is remedied by the Company promptly upon receipt of written
notice thereof from Participant, or
(b) as a result of a material breach by the Company of the compensation
or benefit terms of this Agreement, provided that the Participant
has given the Company written notice of, and a reasonable
opportunity to cure, such breach.
The Participant shall not be entitled to receive Severance Benefits under
Section 4.2 hereof if he is terminated for Cause, or if his employment with the
Company ends due to death, Disability, Retirement, or due to a voluntary
termination of employment by the Participant.
4.2 DESCRIPTION OF SEVERANCE BENEFITS. In the event that the Participant
becomes entitled to receive Severance Benefits, as provided in Section 4.1
herein, the Participant shall receive the following Severance Benefits:
(a) One and one-half (1.5) time(s) the sum of: (i) the Participant's
Base Salary; and (ii) the greater of: (a) the Participant's average
annual bonus earned over the two (2) full fiscal years prior to the
Effective Date of Termination; or (b) the Participant's target
annual bonus established for the bonus plan year in which the
Participant's Effective Date of Termination occurs.
(b) An amount equal to the Participant's unpaid targeted annual
incentive, established for the plan year in which the Participant's
Effective Date of Termination occurs, multiplied by a fraction, the
numerator of which is the number of days completed in the then
existing fiscal year through the Effective Date of Termination, and
the denominator of which is three hundred sixty-five (365).
(c) A net cash payment equivalent to the COBRA rates of the welfare
benefits of medical insurance, dental insurance, and group term life
insurance for a period of twelve (12) months. This cash payment
shall be made in one lump sum (net of applicable withholding) as
prospective reimbursement for the participant's COBRA coverage costs
for the number of months stated.
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COBRA election and continuation enforced shall be the responsibility
of the participant and/or qualified beneficiaries.
In the event the premium cost shall change for all employees of the
Company, the cost, likewise, shall change for the Participant in a
corresponding manner.
(d) A cash payment of vacation earned prior to the Effective Date of
Termination, but not taken by the Participant.
(e) Notwithstanding the provisions of the Long-term Incentive and
Compensation Plan (including any options granted thereunder)
regarding excercisability of options following termination of
employment, in the event that the Participant receives general
severance benefits under Article 4, options granted under the NRG
Energy, Inc. Long-term Incentive and Compensation Plan prior to the
termination date will continue to vest in accordance with the
existing vesting schedule for a period of two (2) years following
the termination date.
4.3 TERMINATION DUE TO DISABILITY. If the Participant's employment is
terminated due to Disability during the term of this Plan, the Participant shall
receive his Base Salary and accrued vacation through the Effective Date of
Termination and continuation of the welfare benefits of medical insurance,
dental insurance, and group term life insurance shall be subject to the
treatment provided under the applicable disability plan of the Company.
4.4 TERMINATION DUE TO RETIREMENT OR DEATH. If the Participant's
employment is terminated by reason of Retirement or death, the Participant or,
where applicable, the Participant's Beneficiaries, shall receive the
Participant's Base Salary and accrued vacation through the Effective Date of
Termination, and continuation of the welfare benefits of medical insurance,
dental insurance, and group term life insurance shall be subject to the
treatment provided under the applicable retirement plan of the Company.
4.5 TERMINATION FOR CAUSE OR BY THE PARTICIPANT OTHER THAN FOR GOOD
REASON. If the Participant's employment is terminated either: (a) by the Company
for Cause; or (b) by the Participant other than for Good Reason, the Company
shall pay the Participant his unpaid Base Salary and accrued vacation through
the Effective Date of Termination, at the rate then in effect, plus all other
amounts to which the Participant is entitled under any compensation plans of the
Company, at the time such payments are due, and the Company shall have no
further obligations to the Participant under this Plan.
4.6 NOTICE OF TERMINATION. Notice of Termination shall communicate any
termination by the Company for Cause or by the Participant for Good Reason at
least sixty (60) days prior to the date on which such termination shall be
effective. The Company can terminate the employment of the Participant with no
notice in which case the Company shall provide the Participant with continuation
of pay for sixty (60) days.
4.7 FORM AND TIMING OF SEVERANCE BENEFITS. At the discretion of the
Company, all cash payments set forth in Section 4.2 shall be made as a
continuance of pay net of appropriate
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withholdings, for the defined severance period, or in one (1) lump sum net of
appropriate withholdings, within forty-five (45) days after the Effective Date
of Termination.
ARTICLE 5. SEVERANCE BENEFITS UPON CHANGE IN CONTROL
5.1 RIGHT TO CHANGE IN CONTROL SEVERANCE BENEFITS. The Participant shall
be entitled to receive from the Company Change in Control Severance Benefits, as
described in Section 5.2 herein, if there has been a Change in Control of the
Company and if, within the six (6) full calendar month period prior to the
effective date of a Change in Control, or within twelve (12) calendar months
following the effective date of a Change in Control, the Participant's
employment with the Company shall end as a result of either an involuntary
termination of the Participant's employment by the Company for reasons other
than Cause, or by voluntary termination by the Participant for Good Reason.
The Participant shall not be entitled to receive Change in Control
Severance Benefits if he is terminated for Cause, or if his employment with the
Company ends due to death, Disability, or Retirement, or due to a voluntary
termination of employment by the Participant without Good Reason.
5.2 DESCRIPTION OF CHANGE IN CONTROL SEVERANCE BENEFITS. In the event that
the Participant becomes entitled to receive Change in Control Severance
Benefits, as provided in Section 5.1 herein, the Company shall pay to the
Participant and provide him with the following:
(a) An amount equal to two and one-half (2.5) time(s) the sum of (i) the
Participant's Base Salary; and (ii) the greater of: (a) the
Participant's average annual bonus earned over the two (2) full
fiscal years prior to the Effective Date of Termination; or (b) the
Participant's target annual bonus established for the bonus plan
year in which the Participant's Effective Date of Termination
occurs.
(b) An amount equal to the Participant's unpaid targeted annual
incentive, established for the plan year in which the Participant's
Effective Date of Termination occurs, multiplied by a fraction, the
numerator of which is the number of days completed in the then
existing fiscal year through the Effective Date of Termination, and
the denominator of which is three hundred sixty-five (365).
(c) A cash payment of vacation earned prior to the Effective Date of
Termination, but not taken by the Participant.
(d) A net cash payment equivalent to the COBRA rates of the welfare
benefits of medical insurance, dental insurance, and group term life
insurance for a period of twelve (12) months. This cash payment
shall be made in one lump sum (net of applicable withholding) as
prospective reimbursement for the participant's COBRA coverage costs
for the number of months stated.
COBRA election and continuation enforced shall be the responsibility
of the participant and/or qualified beneficiaries.
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(e) All outstanding long-term incentive awards shall be subject to the
treatment provided under the applicable long-term incentive plan of
the Company.
5.3 TERMINATION FOR DISABILITY. Following a Change in Control of the
Company, if the Participant's employment is terminated due to Disability during
the term of this Plan, the Participant shall receive his Base Salary and accrued
vacation through the Effective Date of Termination and continuation of the
welfare benefits of medical insurance, dental insurance, and group term life
insurance shall be subject to the treatment provided under the applicable
disability plan of the Company.
5.4 TERMINATION FOR RETIREMENT OR DEATH. Following a Change in Control of
the Company, if the Participant's employment is terminated by reason of his
Retirement or death, the Participant or, where applicable, the Participant's
Beneficiaries, shall receive the Participant's Base Salary and accrued vacation
through the Effective Date of Termination, and continuation of the welfare
benefits of medical insurance, dental insurance, and group term life insurance
shall be subject to the treatment provided under the applicable retirement plan
of the Company.
5.5 TERMINATION FOR CAUSE OR BY THE PARTICIPANT OTHER THAN FOR GOOD REASON
OR RETIREMENT. Following a Change in Control of the Company, if the
Participant's employment is terminated either: (i) by the Company for Cause; or
(ii) by the Participant (other than for Retirement) and other than for Good
Reason, the Company shall pay the Participant his full Base Salary and accrued
vacation through the Effective Date of Termination, at the rate then in effect,
plus all other amounts to which the Participant is entitled under any
compensation plans of the Company, at the time such payments are due, and the
Company shall have no further obligations to the Participant under this Plan.
5.6 NOTICE OF TERMINATION. Notice of Termination shall communicate any
termination by the Company for Cause or by the Participant for Good Reason at
least sixty (60) days prior to the date on which such termination shall be
effective. The Company can terminate the employment of the Participant with no
notice in which case the Company shall provide the Participant with continuation
of pay for sixty (60) days.
5.7 FORMS AND TIMING OF CHANGE IN CONTROL SEVERANCE BENEFITS. At the
discretion of the Company, all cash payments set forth in Section 5.2 shall be
made as a continuance of pay net of appropriate withholdings, for the defined
severance period, or in one (1) lump sum net of appropriate withholdings,
within forty-five (45) days after the Effective Date of Termination.
ARTICLE 6. EXCISE TAX
6.1 EXCISE TAX EQUALIZATION PAYMENT. In the event that the Participant
becomes entitled to severance benefits or any other payment or benefit under
this Plan, or under any other agreement or plan of the Company (in the
aggregate, the "Total Payments"), if any of the Total Payments will be subject
to the tax (the "Excise Tax") imposed by Section 4999 of the Code (or any
similar tax that may hereafter be imposed), the Company shall pay to the
Participant in cash an additional amount (the "Gross-Up Payment") such that the
net amount retained by the Participant after deduction of any Excise Tax upon
the Total Payments and any federal, state and local income tax and Excise Tax
upon the Gross-Up Payment provided for by this Section 6.1 (including FICA and
FUTA), shall be equal to the Total Payments. Such payment shall be made by the
Company to the Participant as soon
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as practical following the effective date of termination, but in no event beyond
forty-five (45) days from such date.
6.2 TAX COMPUTATION. For purposes of determining whether any of the Total
Payments will be subject to the Excise Tax and the amounts of such Excise Tax:
(a) Any other payments or benefits received or to be received by the
Participant in connection with a Change in Control of the Company or
the Participant's termination of employment (whether pursuant to the
terms of this Plan or any other plan, arrangement, or agreement with
the Company, or with any person (which shall have the meaning set
forth in Section 3(a)(9) of the Securities Exchange Act of 1934,
including a "group" as defined in Section 13(d) therein) whose
actions result in a Change in Control of the Company or any person
affiliated with the Company or such persons) shall be treated as
"parachute payments" within the meaning of Section 280G(b)(2) of the
Code, and all "excess parachute payments" within the meaning of
Section 280G(b)(l) shall be treated as subject to the Excise Tax,
unless in the opinion of tax counsel as supported by the Company's
independent auditors and acceptable to the Participant, such other
payments or benefits (in whole or in part) do not constitute
parachute payments, or unless such excess parachute payments (in
whole or in part) represent reasonable compensation for services
actually rendered within the meaning of Section 280G(b)(4) of the
Code in excess of the base amount within the meaning of Section
280G(b)(3) of the Code, or are otherwise not subject to the Excise
Tax;
(b) The amount of the Total Payments which shall be treated as subject
to the Excise Tax shall be equal to the lesser of: (i) the total
amount of the Total Payments; or (ii) the amount of excess parachute
payments within the meaning of Section 280G(b)(1) (after applying
clause (a) above); and
(c) The value of any non-cash benefits or any deferred payment or
benefit shall be determined by the Company's independent auditors in
accordance with the principles of Sections 280G(d)(3) and (4) of the
Code.
For purposes of determining the amount of the Gross-Up Payment, the
Participant shall be deemed to pay federal income taxes at the highest marginal
rate of federal income taxation in the calendar year in which the Gross-Up
Payment is to be made, and state and local income taxes at the highest marginal
rate of taxation in the state and locality of the Participant's residence on the
effective date of termination, net of the maximum reduction in federal income
taxes which could be obtained from deduction of such state and local taxes.
6.3 SUBSEQUENT RECALCULATION. In the event the Internal Revenue Service
adjusts the computation of the Company under Section 6.2 herein so that the
Participant did not receive the greatest net benefit, the Company shall
reimburse the Participant for the full amount necessary to make the Participant
whole, plus a market rate of interest, as determined by the Committee.
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ARTICLE 7. OUTPLACEMENT ASSISTANCE
Following a termination of employment in which Severance Benefits or
Change in Control Severance Benefits are payable hereunder, the Participant
shall be reimbursed by the Company for the costs of all outplacement services
obtained by the Participant within the two (2) year period after the Effective
Date of Termination; provided, however, that the total reimbursement shall be
limited to an amount equal to $10,000.
ARTICLE 8. THE COMPANY'S PAYMENT OBLIGATION
8.1 PAYMENT OBLIGATIONS ABSOLUTE. The Company's obligation to make the
payments and the arrangements provided for herein shall be absolute and
unconditional, and shall not be affected by any circumstances, including,
without limitation, any offset, counterclaim, recoupment, defense, or other
right which the Company may have against the Participant or anyone else. All
amounts payable by the Company hereunder shall be paid without notice or demand.
Each and every payment made hereunder by the Company shall be final, and the
Company shall not seek to recover all or any part of such payment from the
Participant or from whomsoever may be entitled thereto, for any reasons
whatsoever.
The Participant shall not be obligated to seek other employment in
mitigation of the amounts payable or arrangements made under any provision of
this Plan, and the obtaining of any such other employment shall in no event
effect any reduction of the Company's obligations to make the payments and
arrangements required to be made under this Plan, except to the extent provided
in Sections 4.2(c) and 5.2(d) herein.
8.2 CONTRACTUAL RIGHTS TO BENEFITS. This Plan establishes and vests in the
Participant a contractual right to the benefits to which he is entitled
hereunder. However, nothing herein contained shall require or be deemed to
require, or prohibit or be deemed to prohibit, the Company to segregate,
earmark, or otherwise set aside any funds or other assets, in trust or
otherwise, to provide for any payments to be made or required hereunder.
ARTICLE 9. WITHHOLDING
The Company shall be entitled to withhold from any amounts payable under
this Plan all taxes as legally shall be required (including, without limitation,
any United States federal taxes, and any other state, city, or local taxes).
ARTICLE 10. NON-COMPETITION OTHER THAN UPON CHANGE IN CONTROL
10.1 PROHIBITION ON COMPETITION. Unless there has been a Change in
Control, the Participant agrees that during the course of the Participant's
employment with the Company, without the prior written consent of the Company,
and for one (1) year from the date of the Participant's voluntary or involuntary
termination of employment with the Company, the Participant shall not:
(a) Directly or indirectly own, manage, consult, associate with,
operate, join, work for, control or participate in the ownership,
management, operation or control of, or be connected in any manner
with, any business (whether in corporate, proprietorship,
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or partnership form or otherwise), as more than a 10% owner in such
business or member of a group controlling such business, which is
engaged in any activity which competes with the business of the
Company as conducted one (1) year prior to (and up through) the date
of the Participant's involuntary or voluntary termination of
employment with the Company or which will compete with any proposed
business activity of the Company in the planning stage on such date
of involuntary or voluntary termination. The participant and the
Company agree that this provision is reasonably enforced as to any
geographic area.
(b) Directly or indirectly solicit, service, contract with or otherwise
engage any past (one year prior), existing or prospective customer,
client, or account who then has a relationship with the Company for
current or prospective business on behalf of a competitor of the
Company, or on the Participant's own behalf for a competing
business. The Participant and the Company agree that this provision
is reasonably enforced with reference to any geographic area
applicable to such relationships with the Company.
(c) 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. The Participant and the
Company agree that this provision is reasonably enforced with
reference to any geographic area applicable to such relationships
with the Company.
(d) The Company agrees that the terms "activity which competes with the
business of the Company," "competitor of the Company," "competing
business," and "relationship with the Company" as used in this
Agreement shall be narrowly applied and that it is not the belief of
the Company that all companies in the energy business are
competitors of the Company. The Company further agrees that this
Agreement shall not be so broadly construed that the Participant is
prevented during the non-compete period from obtaining all other
employment in the energy industry.
10.2 DISCLOSURE OF INFORMATION. The Participant recognizes that he has
access to and knowledge of certain confidential and proprietary information of
the Company, which is essential to the performance of his duties as an employee
of the Company. The Participant will not, during or after the term of his
employment by the Company, in whole or in part, disclose such information to any
person, firm, corporation, association, or other entity for any reason or
purpose whatsoever, nor shall he make use of any such information for his own
purposes.
10.3 COVENANTS REGARDING OTHER EMPLOYEES. During the period ending one (1)
year following the payment of Severance Benefits or Change in Control Severance
Benefits under this Plan, the Participant agrees to not directly or indirectly
solicit, employ or conspire with others to employ any of the Company's
employees. The term "employ" for purposes of this paragraph means to enter into
an arrangement for services as a full-time or part-time employee, independent
contractor, consultant, agent or otherwise. The Participant and the Company
agree that this provision is reasonably enforced as to any geographic area.
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ARTICLE 11. NON-DISPARAGEMENT
11.1 DISPARAGEMENT. The Participant and the Company, each agrees not to
make any disparaging or negative statements about the Company or the
Participant, including but not limited to its products, services or management
to any person or entity whatsoever, including but not limited to past, present
and prospective employees or employers, customers, clients, analysts, investors,
vendors and suppliers.
11.2 RELEASE. In order to receive the severance benefits provided under
the Plan, the Participant will be required to provide the Company with a release
in a form to be provided by the Company. Such release shall fully release the
Company and all of its officers, agents, directors, employees, and
representatives, any affiliated companies, businesses or entities, and all other
persons and entities from each and every legal claim or demand of any kind that
the Participant ever had or might have arising out of any action, conduct or
decision taking place during the Participant's employment with the Company, or
arising out of the Participant's separation from that employment, whether or not
any such claim is known at the time of separation. The Company will provide the
Participant with a release in a form provided by the Company. Such release shall
release the Participant from each and every legal claim or demand excluding acts
of fraud, embezzlement, theft or other acts constituting a felony.
ARTICLE 12. SUCCESSORS AND ASSIGNMENT
12.1 SUCCESSORS TO THE COMPANY. The Company will require any successor
(whether direct or indirect, by purchase, merger, consolidation, or otherwise)
of all or substantially all of the business and/or assets of the Company or of
any division or subsidiary thereof to expressly assume and agree to perform the
Company's obligations under this Plan in the same manner and to the same extent
that the Company would be required to perform them if no such succession had
taken place. Failure of the Company to obtain such assumption and agreement
prior to the effective date of any such succession shall be a breach of this
Plan and shall entitle the Participant to compensation from the Company in the
same amount and on the same terms as he would be entitled to hereunder if he had
terminated his employment with the Company voluntarily for Good Reason. Except
for the purposes of implementing the foregoing, the date on which any such
succession becomes effective shall be deemed the Effective Date of Termination.
12.2 ASSIGNMENT BY THE PARTICIPANT. This Plan shall inure to the benefit
of and be enforceable by the Participant's personal or legal representatives,
executors, administrators, successors, heirs, distributees, devisees, and
legatees. If the Participant dies while any amount would still be payable to him
hereunder had he continued to live, all such amounts, unless otherwise provided
herein, shall be paid in accordance with the terms of this Plan, to the
Participant's Beneficiary. If the Participant has not named a Beneficiary, then
such amounts shall be paid to the Participant's devisee, legatee, or other
designee, or if there is no such designee, to the Participant's estate.
ARTICLE 13. MISCELLANEOUS
13.1 BENEFICIARIES. The Participant may designate one or more persons or
entities as the primary and/or contingent Beneficiaries of any Severance
Benefits or Change in Control Severance
11
Benefits owing to the Participant under this Plan. Such designation must be in
the form of a signed writing acceptable to the Company. The Participant may make
or change such designations at any time.
13.2 GENDER AND NUMBER. Except where otherwise indicated by the context,
any masculine term used herein also shall include the feminine, the feminine
shall include the masculine; the plural shall include the singular, and the
singular shall include the plural.
13.3 SEVERABILITY. In the event any provision of this Plan shall be held
illegal or invalid for any reason, the illegality or invalidity shall not affect
the remaining parts of the Plan, and the Plan shall be construed and enforced as
if the illegal or invalid provision had not been included. Further, the captions
of this Plan are not part of the provisions hereof and shall have no force and
effect.
13.4 MODIFICATION. No provision of this Plan may be modified, waived, or
discharged unless such modification, waiver, or discharge is agreed to in
writing and signed by the Participant and by an authorized member of the
Committee, or by the respective parties' legal representatives and successors.
13.5 APPLICABLE LAW. To the extent not preempted by the laws of the United
States, the laws of the State of Minnesota, shall be the controlling law in all
matters relating to this Plan.
William Pieper
-----------------------------------------
Participant's Name
/s/ WILLIAM PIEPER
-----------------------------------------
Participant's Signature
7/16/01
-----------------------------------------
Date
NRG Energy, Inc.
By: /s/ David H. Peterson
--------------------------------------
Title: Chairman, President and CEO
-----------------------------------
Date: 7/17/01
------------------------------------
12
MEMORANDUM
(XCEL ENERGY LOGO)
Personal and Confidential
Date: 7/16/2002
To: William Pieper
From: David E. Ripka
Reference: NRG Executive Officer and Key Personnel Severance Plan
Dear Bill:
This note is designed to recognize the extraordinary efforts you have given to
NRG Energy, Inc. (the "Company") over the past years. You have been key in the
management and financial operations of that organization, and your position has
placed you in many of the executive level benefits offered by NRG and Xcel
Energy Inc.
We value you and wish to count on you for your continued contribution in the
financial functions of the Company as it transitions to a wholly-owned
subsidiary of Xcel Energy Inc. We also realize that you may be contemplating
your role in the new organization, and weighing it against your eligibility for
an immediate benefit under Section 4.1 of the NRG Executive Officer and Key
Personnel Severance Plan due to a material change and reduction in your job
responsibilities that occurred on June 3, 2002. It is with this backdrop that I
am pleased to be able to offer you the opportunity to modify the terms of the
Severance Agreement you had entered into under the NRG Executive Officer and Key
Personnel Severance Plan (the "Plan").
Our offer to modify the Plan terms is as follows:
We will extend the time frame to assert a "material change or reduction in the
Participant's job responsibilities with the Company" for an additional 15 months
from the date of this memo. You, in turn, agree to not voluntarily terminate and
assert a severance eligibility claim against the Company for a 12-month period.
At the end of the 12-month period you will have 3 months to voluntarily
terminate and receive severance benefits as calculated under Section 4.2 of the
Plan.
The balance of the Severance Agreement will continue to remain in full force and
effect, but may in the future be modified with our mutual consent. If you
ultimately assert a severance claim and, for any reason, the Company fails or is
unable to fulfill its obligation under this agreement on a timely basis, Xcel
Energy Inc. agrees to pay any and all sums that have not been paid by the
Company (as if
Xcel Energy Inc. were the primary obligor). In addition, we agree not to reduce
your base salary, perquisite allowance or target annual bonus during the term of
this agreement. We also agree that the severance benefit you will receive if you
ultimately assert a claim under this agreement will not be less than the amount
you would have received if you had voluntarily terminated as of the date of this
letter. I hope you agree that these modifications will allow you a better
opportunity to understand your role in Xcel Energy Inc.
If you agree with the modifications we have proposed, please indicate your
approval in the space below. Return the signed copy to my attention within the
next ten business days. I will have a countersigned copy returned to you. Thank
you in advance for your consideration.
Agreed to this 16th day of July, 2002.
------ -----
By: /s/ WILLIAM PIEPER
----------------------------------
Accepted on behalf of NRG Energy, Inc. and Xcel Energy Inc.
By: /s/ Eduard J. McIntyre
----------------------------------