01—Abstract
Summary
Summary of the 8-K filed March 23, 2007. Cited figures are marked; the original filing is the authoritative source.
This 8-K filing from Xcel Energy Inc. (XEL) on March 23, 2007, announces the retirement of Vice President and General Counsel, Gary R.
Johnson, effective March 31, 2007, after more than 18 years of service. The report details the comprehensive retirement agreement reached between Mr. Johnson and the company, outlining the compensation and benefits he will receive. This includes the exercise of outstanding stock options, participation in specific performance share and restricted stock units, vested benefits from various pension and retirement plans, and continued health and life insurance coverage.
Investors should note the significant financial provisions of the retirement agreement, including substantial cash payments and the estimated present values of pension and retirement benefits. While Mr. Johnson will receive these benefits, the filing also clarifies that the offered package is less than what he would have received under the company's severance policy for termination without cause. The agreement is contingent on Mr. Johnson signing a release of claims.
02—Key points
Key Highlights
- Gary R. Johnson, Vice President and General Counsel, announced his retirement effective March 31, 2007.
- Mr. Johnson served Xcel Energy for over 18 years.
- A retirement agreement outlines Mr. Johnson's compensation and benefits post-employment.
- Benefits include stock option exercise, participation in 2005 performance/restricted stock awards, and vested pension/retirement plan benefits.
- Estimated value of vested pension/retirement plans is approximately $4.5 million.
- The agreement includes several cash payments totaling over $1.2 million, payable in 2007.
- Mr. Johnson must sign a release of claims to receive these benefits, and the package is less than a 'termination without cause' severance.
03—Questions
Frequently Asked Questions
What is the primary reason for this 8-K filing?
This 8-K filing is primarily to report the retirement of Xcel Energy's Vice President and General Counsel, Gary R. Johnson, and to disclose the terms of his retirement agreement with the company.
What retirement benefits will Mr. Johnson receive?
Mr. Johnson will receive vested benefits from the company's pension, non-qualified pension, Supplemental Executive Retirement Plan (SERP), and 401(k)/deferred compensation plans. He can also exercise outstanding stock options, participate in specific prior year performance and restricted stock awards, and continue post-employment health and life insurance coverage. Additionally, he will receive a cash payment of $56,375 and a lump sum of $1,070,000, among other potential cash payments related to retirement benefits.
Are the retirement benefits offered to Mr. Johnson standard?
The retirement benefits include standard components like vested plan benefits and continued options exercise. However, the additional cash payments and specific arrangements for continued insurance suggest a tailored package. The filing notes that these additional benefits are less than what he would have received under the company's 'termination without cause' severance policy.
What is the financial impact of this retirement agreement on Xcel Energy?
The financial impact is primarily the cost of the retirement and severance package for Mr. Johnson, estimated to be substantial given the cash payments and the present value of his pension and retirement benefits (estimated at over $4.5 million for vested benefits alone). The company has also estimated the value of certain other benefits like performance shares ($805,970) and executive life insurance premiums ($83,000).
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