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EXHIBIT 10.33
THIRD AMENDMENT TO THE
EMPLOYMENT AGREEMENT OF XXXXX X. XXXXXXXX
WHEREAS, Xxxxx X. Xxxxxxxx (the "Executive") and NRG Energy Inc.
("NRG") have previously entered into an Employment Agreement (the "Agreement")
dated June 28, 1995, amended on June 27, 1999 and further amended on August 26,
1999; and
WHEREAS, the parties wish to further amend the agreement to extend its
term for four (4) additional years, to provide a minimum severance benefit in
the event Executive's employment is terminated in connection with a change in
control, and to preserve certain 1999 retirement benefit calculation assumptions
if specific performance goals are achieved.
RESOLVED, that sections 1, 3(c)(i), and 5(a) of the Agreement are
hereby amended to read as follows:
1. Term. NRG shall employ the Executive, and the Executive shall serve NRG, on
the terms and conditions set forth in this Agreement, for the period (the
"Employment Period") commencing on June 28, 1995 (the "Effective Time") and
ending JUNE 27, 2004.
3. Compensation.
(c) Additional Benefits.
(i) Supplemental Retirement Benefits. During the
Employment Period, the Executive shall participate in a
supplemental executive retirement plan ("SERP") such that the
aggregate value of the retirement benefits that he and his
spouse will receive at the end of the Employment Period under
all defined benefit plans of NRG, NSP and their affiliates
(whether qualified or not) will be not less than the aggregate
value of the benefits he would have received had he continued,
through the end of the Employment Period to participate in the
NSP Deferred Compensation Plan, the NSP Excess Benefit Plan,
and the NSP Pension Plan; provided, that benefits under the
SERP, shall also include the amount, if any, that the NSP
Pension Plan's actuaries reasonably estimate is necessary to
compensate Executive for the monthly defined benefit payments
the Executive did not receive, but would have received during
the term of this Agreement and prior to the date of his actual
termination of employment if monthly benefit payments had
commenced at the end of the month following the month in which
the Executive first became eligible for Early Retirement under
the NSP Pension Plan. In addition, the SERP shall offer the
Executive the option to receive his benefits thereunder in a
single lump sum payment using actuarial assumptions that the
NSP Pension Plan's actuaries determine are reasonable in the
aggregate; provided, that such lump sum payment option shall
be subject to the consent of the Board in its sole discretion
and must be requested by the Executive not less than twelve
months prior to the Executive's termination of employment. IF
THE EXECUTIVE ELECTS A LUMP SUM PAYMENT, THE LUMP SUM SHALL BE
CALCULATED USING THE JOINT
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AND SURVIVOR ANNUITY FACTORS IN EFFECT FOR 1999 UNDER THE NSP
PENSION PLAN IF THE FOLLOWING PERFORMANCE GOALS HAVE BEEN
ACHIEVED PRIOR TO PAYMENT OF THE LUMP SUM: EARNINGS PER SHARE
(EPS) GROWTH OF 20 PERCENT PER YEAR (ASSUMING ADEQUATE EQUITY
FUNDING IS PROVIDED) AND NRG RETURN GUIDELINES OF UTILITY (NSP
AUTHORIZED RATE OF RETURN) PLUS 1 1/2 PERCENT LONG-TERM RETURN
ON EQUITY (XXX), ON AVERAGE, FOR NEW INVESTMENTS. IF THE XXX
GOAL IS NOT ACHIEVED, The ADDITIONAL BENEFIT DERIVED FROM THE
USE OF THE 1999 JOINT AND SURVIVOR ANNUITY FACTORS WILL BE
PRORATED PROVIDED THAT THE EPS GOAL IS MET AND AVERAGE ANNUAL
XXX IS AT LEAST 8 PERCENT. FOR EXAMPLE, IF, ON AVERAGE, 20
PERCENT EPS GROWTH AND A XXX OF UTILITY PLUS 1 1/2 PERCENT is
ACHIEVED, THE FULL JOINT AND SURVIVOR BENEFIT WILL BE
PROVIDED. IF AVERAGE ANNUAL XXX IS 8 PERCENT OR LESS, NO
BENEFIT BASED ON THE JOINT AND SURVIVOR ANNUITY FACTORS WILL
BE PROVIDED. Finally, if the Executive dies while employed, or
deemed pursuant to paragraph (a) of section 5 to be employed
by NRG, his surviving spouse (or, if, he has no surviving
spouse, his estate) shall be entitled to receive a benefit
equal in value to the difference between the pension benefit
that the Executive would have received if he had retired
(rather than died ) on the date of his death and received a
lump sum pension benefit and the lump sum value of the pension
payable in the absence of this provision; provided, that in
the case where the Executive has no surviving spouse, the
benefit pursuant to this sentence shall be paid in a lump sum;
and provided, further, that in the case where the Executive
has a surviving spouse, the benefit pursuant to this sentence
shall be paid in the form of a single life annuity for her
life unless she elects a single lump sum payment and the
Board, in its sole discretion, consents to the lump sum
payment. Notwithstanding anything in the preceding sentence to
the contrary, if despite reasonable efforts NRG is unable to
obtain insurance on the life of the Executive with a death
benefit equal to the anticipated after-tax cost to NRG of the
benefit described in the preceding sentence at an average
annual premium cost of less than $7,000, then the value of
such benefit payable to Executive's surviving spouse or estate
shall be reduced so that its after-tax cost to NRG does not
exceed the amount of insurance on the life of the Executive
that NRG could obtain at such cost.
5. Obligations of NRG upon Termination.
(a) By NRG Other Than for Cause or Disability; By the
Executive for Good Reason. If, during the Employment Period, NRG
terminates the Executive's employment, other than for Cause or
Disability, or the Executive terminates employment for Good Reason, NRG
shall continue to provide the Executive with the compensation and
benefits set forth in Section 3 as if he had remained employed by NRG
pursuant to this Agreement through the end of the Employment Period and
then retired (at which time he will be treated as eligible for all
retiree welfare benefits and other benefits provided to retired senior
executives, as set forth in Section 3(b) and (c)); PROVIDED THAT IF THE
TERMINATION IS A RESULT OF A CHANGE OF CONTROL, AS THAT TERM IS DEFINED
IN THE NRG OFFICER EQUITY PLAN, THE COMPENSATION AND BENEFITS SHALL BE
CONTINUED FOR THE LONGER OF THIRTY (30) MONTHS OR THROUGH THE END OF
THE EMPLOYMENT PERIOD; provided, that the Incentive
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Compensation for such period shall be equal to the greater of the
target Incentive Compensation that the Executive would have been
eligible to earn for such period or the Incentive Compensation awarded
for the last complete incentive plan year ending prior to Executive's
Termination of Employment; provided, further, that in lieu of
stock-based or equity-based awards, the Executive shall be paid cash
equal to the fair market value at the time of grant, if any,
(determined without regard to any restrictions) of the awards that
would otherwise have been granted; and provided, finally, that during
any period when the Executive is eligible to receive benefits of the
type described in paragraph (b) (i) of Section 3 under another
employer-provided plan the benefits provided by NRG under this
paragraph (a) of Section 5 may be made secondary to those provided
under such other plan. The payments and benefits provided pursuant to
this paragraph (a) of Section 5 are intended as liquidated damages for
a termination of the Executive's employment by NRG other than for Cause
or Disability or for the actions of NRG leading to a termination of the
Executive's employment by the Executive for Good Reason, and shall be
the sole and exclusive remedy therefor.
RESOLVED FURTHER, that the Agreement as amended, shall remain in full
force and effect.
/s/ Xxxxx X. Xxxxxxxx Date: 20 Oct. 1999
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Xxxxx X. Xxxxxxxx
NRG ENERGY, INCORPORATED
By /s/ Xxxxxxx X. Xxxxxx Date: 20 Oct. 1999
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Its Director
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