Xcel Energy (XEL)

Item 5.02 Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers

On May 23, 2007, the Board of Directors of Xcel Energy Inc. (the “Company”) approved an amendment to the Xcel Energy Senior Executive Severance and Change-in Control Policy (the “Policy”) to add, effective June 1, 2007, Mr. Paul J. Bonavia, President, Utilities Group, as a participant solely with respect to change-in control benefits.  As previously disclosed, each of the Company’s named executive officers other than Mr. Bonavia were already participants in the Policy.  Mr. Bonavia, however, had a separate employment agreement and change-in control agreement.  In connection with his addition as a participant in the Policy, Mr. Bonavia’s change-in-control agreement was terminated, effective June 1, 2007, and his employment agreement was amended, effective June 1, 2007, to reflect that change-in-control benefits would be paid under the Policy instead of through his change-in-control agreement.  Copies of the amendment to the Policy and Mr. Bonavia’s employment agreement are filed as exhibits 10.01 and 10.02 to this Form 8-K and are incorporated by reference herein.

As a participant in the Policy, if Mr. Bonavia is terminated (other than for cause, disability, death or voluntary retirement), including a voluntary termination following a diminution in salary, benefits or responsibilities, within two years following a change in control (as defined in the Policy), Mr. Bonavia would be entitled to receive:

·       a cash payment equal to three times his annual base salary and target annual incentive award;

·       prorated target annual incentive compensation for the year of termination;

·       a cash payment of approximately $30,000 for outplacement services;

·       a cash payment equal to the value of the additional amounts that would have been credited to or paid on his behalf under pension and retirement savings plans if he had remained employed for another three years;

·       continued medical, dental and life insurance benefits for three years; and

·       continued perquisite allowance for three years.

In addition, Mr. Bonavia would be entitled to receive an additional cash payment to make him whole for any excise tax on excess parachute payments that he may incur, with certain limitations specified in the Policy.

Under the terms of his amended employment agreement, upon termination following a change-in-control, Mr. Bonavia would be entitled to receive the greater of the payments under the Policy described above or the payments he would be entitled to receive under his employment agreement.

The Policy and Mr. Bonavia’s employment agreement have previously been filed as exhibits 10.10 to the Form S-4 Registration Statement (333-112032) of Southwestern Public Service Company, exhibit 10.39 to Xcel Energy’s Annual Report on Form 10-K for the year ended Dec. 31, 2006 and exhibit 10.25 to Xcel Energy’s Annual Report on Form 10-K for the year ended Dec. 31, 2004.

2

On March 20, 2007, Mr. Gary R. Johnson, Vice President and General Counsel of Xcel Energy Inc. (the “Company”), announced his intention to retire, effective March 31, 2007.  Mr. Johnson had served as General Counsel of Xcel Energy for more than 18 years.     Also on March 20, 2007, Mr. Johnson and the Company entered into an agreement providing for the compensation and benefits he is to receive from the Company following his retirement.

This agreement recognizes that Mr. Johnson will be entitled following his retirement to receive all benefits for which he qualifies under the terms of Company plans, programs, policies and practices under which he is covered.  The benefits that Mr. Johnson is entitled to receive upon termination include:

·                                          the ability to exercise outstanding stock options through the end of their respective terms,

·                                          participation in outstanding performance share and restricted stock units awarded in 2005 in accordance with their terms, with an estimated value, assuming payout at target and a March 20, 2007 stock price, of approximately $805,970 (performance share and restricted stock units awarded in 2006 and 2007 will be forfeited upon retirement unless the Governance, Compensation and Nominating Committee of the Board of Directors acts to provide a benefit to participants who retire during the term of an award, and permits Mr. Johnson to be included in this group)

·                                          vested benefits under the Company’s pension plan, non-qualified pension plan and Supplemental Executive Retirement Plan (“SERP”) (i.e., taking into account any reductions for early retirement) (estimated to have a present value of approximately $4,535,257)

·                                          accrued vacation/paid time off ($34,298 as of March 16, 2007, subject to adjustment through March 31, 2007)

·                                          vested benefits under the Company’s 401(k) plan and deferred compensation plan

·                                          post-employment/ retirement coverage under the Company’s group health and life plans (with an estimated value of premiums for group term life insurance of approximately $3,200; premiums for group health being fully retiree-paid)

In addition, the agreement provides that Mr. Johnson will be entitled to the following additional benefits:

·                                          a cash payment  of $56,375 representing one-fourth of his 2007 annual incentive target award (such payment to be made at the time the 2007 annual incentive is paid to other participants in February 2008)

·                                          a cash payment of $1,070,000, payable in a lump sum on October 15, 2007

·                                          a cash payment, payable in a lump sum on October 15, 2007, equal to the actuarial equivalent present value of credits under the pension plan and nonqualified pension plan, deferred compensation plan and SERP that would be needed to allow him  to reach the age and years of service criteria, the so-called “Rule of 90”, when benefits would be unreduced for early retirement by continuing employment through and retiring at November 1, 2007 (estimated to be approximately $180,583)

·                                          a cash payment, payable in a lump sum on October 15, 2007, equal to the actuarial equivalent present value of the estimated difference in the amount of retiree medical premiums that he would be required to pay from April 1, 2007 through March 31, 2009 and those medical premiums he would have paid as an active employee for such period (estimated to be approximately $27,693)

·                                          executive life insurance coverage until December 31, 2011 equal to his coverage currently in force (200% of final base salary) (estimated premiums of approximately $83,000).

As a condition to and in consideration of receiving these benefits, Mr. Johnson has agreed to sign a release of claims agreement.  These additional benefits are less than Mr. Johnson would have received if his employment was terminated without cause under the Company’s 2003 Severance and Change in Control Policy (pursuant to which he would be entitled, among other things, to two times salary and target bonus).

2