Xcel Energy 2006 Annual Report Download - page 142

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Energy achieves a specified earnings per share (EPS) growth (adjusted for corporate-owned life insurance) measured against Dec. 31,
2006 EPS (adjusted for corporate-owned life insurance). The forms of performance-based restricted stock unit agreements are filed as
Exhibits 10.30 and 10.32 to this Form 10-K.
Additionally, Xcel Energy’s annual dividend paid on its common stock must remain at $0.89 per share or greater. EPS growth will be
measured annually at the end of each fiscal year. However, in no event will the restrictions lapse prior to Dec. 31, 2008. If the
performance criteria have not been met within four years of the date of grant, all associated Units shall be forfeited.
The remaining 25 percent of awarded Units plus associated earned dividend equivalents shall be settled, and the restricted period will
lapse, after the average of actual performance results for the three components of an environmental index (measured as a percent of
target performance) meets or exceeds 100 percent. The environmental index will be measured annually at the end of each fiscal year.
However, in no event will the restrictions lapse prior to Dec. 31, 2008. If the performance criteria have not been met within four years
of the date of grant, all associated Units shall be forfeited.
The separate awards of performance shares also will represent an equal number of shares of Xcel Energy common stock. Performance
shares may not be sold or otherwise transferred. Payout of the performance share award will be dependent entirely on a single
measure, total shareholder return (TSR). Xcel Energy’s TSR will be measured over a three-year period. Xcel Energy’s TSR is
compared to the TSR of other companies in the Edison Electric Institute’s Electrics Index as a peer group. At the end of the three-year
period, potential payouts of the performance shares range from 0 percent to 200 percent, depending on Xcel Energy’s TSR compared
to the peer group.
The terms of the foregoing grants are consistent with the 2005 Omnibus Incentive Plan and terms of award agreements filed as
Appendix B to Xcel Energy’s 2005 Proxy Statement and Exhibits 10.30, 10.31 and 10.32 to this Form 10-K.
The following table shows the number of performance-based restricted stock units and performance shares granted, effective Jan. 1,
2007, to Named Executive Officers:
Named Executive Officer
Performance-based
Restricted Stock Units Performance Shares
Richard C. Kelly ........................................ 86,478 95,211
Gary R. Johnson......................................... 11,819 13,012
Paul J. Bonavia.......................................... 18,927 20,838
Patricia K. Vincent....................................... 11,242 12,377
Benjamin G.S. Fowke III.................................. 18,927 20,838
Other Perquisites and Benefits
Other perquisites and benefits provided to executives generally are not tied to the Company’s financial performance, but are primarily
designed to attract and retain executives. Among the perquisites and benefits provided by the Company in 2006 to its executives are
Company-paid life insurance in an amount equal to four times base pay, reduced to two times base salary post retirement (which, in
general, the executives can purchase upon termination by repaying to the Company the greater of the cash surrender value or the
aggregate premiums paid by the Company), and benefits provided under the Xcel Energy Inc. Nonqualified Deferred Compensation
Plan and the Xcel Energy Supplemental Executive Retirement Plan that make up for retirement benefits that cannot be paid under the
Company’s qualified retirement plans due to Internal Revenue Code limitations and the exclusion of certain elements of pay from
pension-covered earnings. Other perquisites and benefits provided by the Company in 2006 to its executives include reimbursement
for financial planning services and home security systems, cash perquisite allowance, executive medical insurance and physicals,
aircraft usage and club dues. In 2006, the Company undertook a thorough review of perquisites provided to executive officers. The
Company compared the perquisites to those being offered to executive officers in other companies and evaluated the value the
perquisites provided in attracting and retaining executive officers. Based on this evaluation the Company substantially changed the
perquisites that will be provided to executive officers, including the Named Executive Officers in 2007. The Company also evaluated
the perquisites offered to the executive officers as compared to the benefits available to other employees of the Company. Based on
this review, the Company eliminated most perquisites for executive officers. The Company has increased the cash perquisite
allowance to partially offset the elimination of the perquisites. Effective January 1, 2007, the Committee eliminated all of these
executive perquisites other than the cash allowance, which was increased to $30,000 for the CEO and $25,000 for other NEO’s to
partially offset the elimination of the perquisites.
Certain executive officers, including four of the Named Executive Officers, may receive severance benefits in accordance with the
Xcel Energy Senior Executive Severance and Change in Control Policy, which is filed as Exhibits 10.15 and 10.28 to this form 10-K.
Mr. Bonavia may receive severance benefits under his employment agreement, which is filed as Exhibit 10.25 to this Form 10-K. In
October 2006, the Committee amended the 2003 Policy to reduce the separation benefits payable to an executive officer other than in
the event of a change in control to the following: (i) a lump sum severance benefit equal to one times my annual salary and target
annual incentive; (ii) a lump sum payment equal to the actuarial equivalent of the additional benefits accrued under the Company’s