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PRELIMINARY
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
MAY 6, 1994
TO OUR SHAREHOLDERS:
The Annual Meeting of the Shareholders of Nevada Power Company will be held
at the Sheraton Desert Inn Country Club, Terrace Room, 3145 Las Vegas Boulevard
South, Las Vegas, Nevada, on Friday, May 6, 1994, at 2:00 P.M. for the following
purposes:
1. To elect four directors to three-year terms.
2. To consider and act upon any other business that may properly be
brought before the meeting.
Guest rooms have been reserved at the Sheraton Desert Inn at a special rate
for those Nevada Power Company Shareholders who wish to stay Thursday, May 5,
1994. To make room reservations, please call the Sheraton Desert Inn (800) 634-
6906 or (702) 733-4434, and indicate you are attending the Nevada Power Company
Shareholders Meeting.
The close of business on March 14, 1994 has been fixed as the record date
for determining the shareholders entitled to receive notice of and to vote at
the Annual Meeting.
March 14, l994
Richard L. Hinckley
Secretary
EVEN IF YOU EXPECT TO BE PRESENT AT THE MEETING, PLEASE
SIGN AND DATE THE ENCLOSED PROXY AND RETURN IT
PROMPTLY IN THE ACCOMPANYING ENVELOPE
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Location of 1994
Annual Meeting of Shareholders
A map of the location of the 1994 Annual Meeting of Shareholders to be held at
the Sheraton Desert Inn Country Club in the Terrace Room is included in this
space. The map shows the area of Las Vegas, Nevada bordered by Sahara Ave to
the North, Tropicana Ave to the South, Interstate 15 to the West and Paradise
Road to the East, as well as the relative location of the Las Vegas Convention
Center and McCarran International Airport. An enlarged map of the Sheraton
Desert Inn property showing various structures is overlaid on the right side of
the area map of Las Vegas.
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PRELIMINARY
NEVADA POWER COMPANY
6226 West Sahara Avenue
P.O. Box 230
Las Vegas, Nevada 89151
_______________________
PROXY STATEMENT
The enclosed proxy for the 1994 Annual Meeting of Shareholders is solicited
by the Board of Directors of Nevada Power Company (the "Company") and it may be
revoked by written notice to the Secretary of the Company at any time prior to
its use. All shares represented by valid proxies on the enclosed form, timely
received by the Company, will be voted at the meeting or any adjourned session
in the manner directed by the shareholder. If no direction is made, the proxy
will be voted "FOR" proposal 1.
As of the close of business on March 14, 1994, there were outstanding and
entitled to vote 41,603,554 shares of Common Stock. Only holders of Common
Stock of record at the close of business on March 14, 1994 will be entitled to
vote at the meeting.
Each share of the Company's Common Stock is entitled to one vote. The
total number of shares represented by individual proxies includes shares, if
any, owned by shareholders and credited to their accounts under the Company's
Stock Purchase and Dividend Reinvestment Plan. An affirmative vote of a
majority of the shares present and voting at the meeting is required for
approval of all items being submitted to the shareholders for their
consideration. An automated system administered by the Company tabulates the
votes. Abstentions are included in the determination of the number of shares
present and voting, whereas broker non-votes are not counted for purposes of
determining whether a proposal has been approved. The first mailing of the
proxy and proxy statement to common shareholders will be on or about March 29,
1994.
The cost of soliciting proxies in the enclosed form is being borne by the
Company. In addition to solicitation by mail, arrangements have been made with
brokerage houses, nominees and other custodians and fiduciaries to send proxy
material to their principals and the Company will reimburse them for their
reasonable expenses in doing so. Proxies also may be solicited personally or by
telephone or telegraph by directors, officers, and a few regular employees of
the Company in addition to their usual duties, but they will not be specially
compensated for these services. The Company has retained D.F. King & Co., Inc.,
77 Water Street, New York, New York 10005 to aid in the solicitation of proxies
by similar methods, for which D.F. King & Co., Inc. will receive a fee of $7,000
plus reimbursement of out-of-pocket expenses.
ELECTION OF DIRECTORS
The Company's Restated Articles of Incorporation currently provide for a
classified board consisting of between three and twelve directors. At present,
the Board of Directors (sometimes referred to herein as the "Board") consists of
eleven members divided into three classes of four, three and four directors,
respectively. One class of directors is elected at each Annual Meeting to serve
a three-year term. A brief biography of each nominee up for election at the
1994 Annual Meeting is presented below. Management recommends that shareholders
vote "FOR" these nominees.
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The proxies solicited by and on behalf of the Board of Directors of the
Company will be voted "FOR" the election of the nominees, unless authority to do
so is withheld as provided in the enclosed proxy. Although it is not
contemplated that any of the nominees will be unable to serve, in the event any
nominee should not be available as a candidate for director at the time of the
Annual Meeting, the persons named in the proxy will vote for a substitute who
will be designated by the present Board of Directors to fill such vacancy.
The following table sets forth biographical information for the four
nominees for director and the other directors of the Company.
Principal Occupation and Year First
Employment for the Past Five Became Director
Name Age Years and Other Information /Term Expires
- ----------------- --- --------------------------------------- ---------------
Nominees for Director:
- ----------------------
JOHN L. GOOLSBY 52 President, Chief Executive Officer and 1991/1994
a director of each of The Hughes
Corporation and Summa Corporation (land
development companies), the principal
operating companies of the Howard
Hughes Estate. Mr. Goolsby became
affiliated with Summa Corporation in
l980, and since that time has held
various positions with the operating
companies of the Howard Hughes Estate.
Mr. Goolsby is a director of Bank of
America Nevada. Mr. Goolsby is a
graduate of the University of Texas at
Arlington and a Certified Public
Accountant. Member Compensation
Committee. Member Nominating
Committee. Member Pension Fund
Committee.
JERRY HERBST 56 Chief Executive Officer of each of 1990/1994
Terrible Herbst, Inc. (gas station, car
wash, convenience store chain) and
Herbst Supply Co., Inc. (wholesale fuel
distribution), family-owned businesses
for which he has worked since l959.
Mr. Herbst is a general partner of the
Gold Coast Hotel & Casino and a
director of Bank of America Nevada. Mr.
Herbst is a graduate of the University
of Southern California. Member
Compensation Committee. Member
Nominating Committee. Member Pension
Fund Committee.
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Principal Occupation and Year First
Employment for the Past Five Became Director
Name Age Years and Other Information /Term Expires
- ----------------- --- --------------------------------------- ---------------
FRANK E. SCOTT 74 Until his retirement in 1988, Chairman 1972/1994
of the Board and Chief Executive
Officer of First Western Financial
Corporation (holding company of a
savings and loan association). Mr.
Scott is Chairman of the Board and
Chief Executive Officer of Dres Media
Corporation (media communication), and
is Chairman of the Board of White
Plains Resources Corporation (mining).
Member Audit Committee. Member
Compensation Committee. Member Pension
Fund Committee.
JELINDO A. TIBERTI 74 Chairman of the Board of J. A. Tiberti 1963/1994
Construction Company, Inc. Mr. Tiberti
is a Professional Engineer. Chairman
Pension Fund Committee. Member
Executive Committee. Member
Compensation Committee.
Other Directors:
- ----------------
FRED D. GIBSON, JR. 66 Chairman, President, Chief Executive 1978/1995
Officer and a director of American
Pacific Corporation (manufacture of
chemicals and pollution abatement
equipment; real estate development).
Mr. Gibson has been affiliated with
American Pacific Corporation and its
predecessor, Pacific Engineering &
Production Co., since l956. Mr. Gibson
is a graduate of the University of
Nevada and holds a degree in
Metallurgical Engineering. Chairman
Audit Committee. Member Executive
Committee. Member Compensation
Committee. Member Nominating Committee.
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Principal Occupation and Year First
Employment for the Past Five Became Director
Name Age Years and Other Information /Term Expires
- ----------------- --- --------------------------------------- ---------------
JAMES C. HOLCOMBE 49 President and Chief Operating Officer 1990/1995
of the Company. Mr. Holcombe joined the
Company as Executive Vice President on
March l, l989 and was elected President
and Chief Operating Officer on May 1,
l989. Prior to joining the Company, he
was Vice President of Resource
Development for San Diego Gas and
Electric Company. Mr. Holcombe is a
graduate of California Polytechnic
State University and is a Registered
Professional Engineer. Member Executive
Committee.
CONRAD L. RYAN 69 Elected President of the Company in 1978/1995
1978, Chief Executive Officer of the
Company in l979 and Chairman of the
Board in l982. Mr. Ryan retired from
the Company and from the positions of
Chief Executive Officer and Chairman of
the Board in l989. Mr. Ryan is a
graduate of the University of Utah and
a Registered Professional Engineer.
Member Executive Committee. Member
Audit Committee.
ARTHUR M. SMITH 71 Prior to his retirement in 1984, 1959/1995
Chairman of the Board of First
Interstate Bank of Nevada, N.A. Mr.
Smith is a director of Circus Circus
Enterprises (hotel and casino), John
Deere Insurance Group and the W. M.
Keck Foundation. Chairman Compensation
Committee. Member Audit Committee.
Member Pension Fund Committee.
JAMES CASHMAN III 44 President of Cashman Equipment Company 1981/1996
(heavy construction equipment). Mr.
Cashman is a director of Circus Circus
Enterprises (hotel and casino). Mr.
Cashman is a graduate of Santa Clara
University. Chairman Nominating
Committee. Member Executive Committee.
Member Audit Committee.
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Principal Occupation and Year First
Employment for the Past Five Became Director
Name Age Years and Other Information /Term Expires
- ----------------- --- --------------------------------------- ---------------
MARY LEE COLEMAN 57 President of Coleman Enterprises 1980/1996
(developer of shopping centers and
industrial parks). Mrs. Coleman is a
graduate of the University of Southern
California. Member Audit Committee.
Member Pension Fund Committee.
CHARLES A. LENZIE 56 Chairman of the Board and Chief 1983/1996
Executive Officer of the Company. Mr.
Lenzie joined the Company in 1974 as
Vice President-Finance. He was elected
Senior Vice President-Finance and
Accounting Services in December 1979;
President on February l, l983 and
Chairman of the Board and Chief
Executive Officer on May l, l989. Mr.
Lenzie is a director of Bank of America
Nevada. Mr. Lenzie is a graduate of
the University of Illinois and a
Certified Public Accountant. Chairman
Executive Committee.
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COMMITTEES OF THE BOARD OF DIRECTORS
The Committees of the Board of Directors are the Executive Committee, the
Audit Committee, the Compensation Committee, the Nominating Committee and the
Pension Fund Committee. The major functions of these Committees are described
briefly below.
Executive Committee
Except for certain powers which, under Nevada law, may only be exercised by
the full Board of Directors, the Executive Committee may exercise all powers and
authority of the Board of Directors in the management of the business and
affairs of the Company.
Audit Committee
The Audit Committee recommends to the Board of Directors the appointment of
the independent public accountants. The Audit Committee reviews and considers
the comments from the independent public accountants with respect to internal
accounting controls and the consideration given or corrective action taken by
management to weaknesses, if any, in internal controls. The Audit Committee
discusses matters of concern to the Committee, the independent public
accountants or management relating to the Company's financial statements or
other results of the audit. It also meets with the Company's Director of
Internal Audit regarding internal auditing matters and controls.
Compensation Committee
The Compensation Committee reviews and recommends to the Board compensation
for officers.
Nominating Committee
The Nominating Committee is empowered to consider and review the
qualifications of potential nominees for directors and to recommend to the Board
of Directors a slate of nominees for election as directors at the Annual Meeting
of Shareholders and, when vacancies occur, candidates for election by the Board
of Directors. The Committee will consider nominees recommended by shareholders;
written recommendations must be received by the Secretary of the Company not
less than thirty days nor more than sixty days prior to the meeting at which
directors are to be elected.
Pension Fund Committee
The Pension Fund Committee oversees the investment of the assets of the
Company's Qualified Retirement Plan.
MEETINGS, ATTENDANCE AND COMPENSATION
During 1993, the Company's Board of Directors and the Executive Committee
each met 11 times, the Audit Committee 2 times, the Compensation Committee 4
times and the Pension Fund Committee and the Nominating Committee each met once.
During 1993, John L. Goolsby attended 72% of the aggregate meetings of the
Board of Directors and Committees on which he served. All other directors
attended at least 75% of these meetings.
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No director who receives a salary from the Company is paid any fees to
serve as a director or as a member of any committee of the Board of Directors.
Those directors not receiving salaries from the Company (the "Outside
Directors") are paid an annual fee of $20,000 plus $1,000 for each directors'
meeting attended; an annual fee of $10,000 for serving on the Executive
Committee; $1,000 per meeting attended for serving on the Audit Committee, the
Compensation Committee, the Nominating Committee, or the Pension Fund Committee
and an additional $400 per meeting for serving as Committee Chairman. In
addition, the Company has purchased a $20,000 term life insurance policy for
each of the Outside Directors.
SECURITY OWNERSHIP OF MANAGEMENT
The following table presents certain information regarding the Company's
Common Stock beneficially owned by each director, the Chief Executive Officer
and the four other most highly compensated executive officers of the Company for
the year 1993, and all directors and executive officers of the Company as a
group as of December 31, 1993:
Amount and
Nature of
Beneficial Percent of
Name Ownership Class
- ----------------------------------------------- ------------ ----------
James Cashman III ........................ 6,282(1) .015%
Mary Lee Coleman ......................... 323,585(2) .778%
Fred D. Gibson, Jr. ...................... 6,681(3) .016%
John L. Goolsby........................... 1,501(4) .004%
Jerry Herbst.............................. 5,000(1) .012%
James C. Holcombe ........................ 3,432(1)(12) .009%
Charles A. Lenzie ........................ 8,576(5)(12) .021%
Conrad L. Ryan ........................... 10,199(1) .025%
Frank E. Scott ........................... 5,060(1) .012%
Arthur M. Smith .......................... 1,200(6) .003%
Jelindo A. Tiberti ....................... 2,000(7) .005%
David G. Barneby ......................... 3,335(8)(12) .008%
Cynthia K. Gilliam ....................... 2,018(9)(12) .005%
Steven W. Rigazio......................... 4,049(10)(12) .010%
All Directors & Executive Officers as a
Group (16 individuals)(13).............. 386,009(11)(12) .928%
___________
(1) Held in shareholder's name.
(2) 156,889 shares held in shareholder's name; balance held in family trust.
(3) 4,600 shares held in street name; balance held in shareholder's name.
(4) 1,500 shares held in street name; balance held in shareholder's name.
(5) 5,345 shares held in street name; balance held in shareholder's name.
(6) 1,000 shares held in street name; balance held in family trust.
(7) 1,250 shares held in street name; balance held in name of controlled
corporation.
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(8) 1,136 shares held in street name; 1,817 shares held in shareholder's name;
balance held in trust.
(9) 360 shares held in street name; balance held in shareholder's name.
(10) 515 shares held in shareholder's name; balance held in family trust.
(11) Includes 750 shares held in the name of controlled corporation; 15,191
shares held in street name; 171,728 shares held in trust and 198,340 shares
held in shareholders' names.
(12) Of the shares shown, all of the shares beneficially owned by Mr.
Holcombe, 1,256 shares beneficially owned by Mr. Lenzie, 764 shares
beneficially owned by Mr. Barneby, 680 shares beneficially owned by Mrs.
Gilliam, 515 shares beneficially owned by Mr. Rigazio, and 8,822 of the
shares beneficially owned by all directors and executive officers as a
group are held in the Company's 401(k) Plan for the benefit of such
shareholders. These shares are fully vested. All shares of Company Common
Stock held in the Company's 401(k) Plan are subject to shared voting power
with the trustee of the 401(k) Plan.
(13) None of the directors or executive officers own any of the Company's
outstanding Cumulative Preferred Stock or Preference Stock.
The management of the Company does not know of any shareholder holding
more than 5% of the Company's Common Stock.
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EXECUTIVE COMPENSATION
The following table summarizes the total compensation of the Chief
Executive Officer and the four other most highly compensated executive officers
of the Company for the year 1993, as well as the total compensation paid to each
such individual for the Company's two previous years.
SUMMARY COMPENSATION TABLE (7)
Annual Compensation
------------------------------------
Name and Principal Other Annual All Other
Position(6) Year Salary Bonus(1) Compensation(2) Compensation(3)
- --------------------- ---- --------- -------- -------------- ---------------
Charles A. Lenzie 1993 $ 311,923 $ 98,256 $ 5,917 $ 7,075
Chairman of the 1992 271,434 113,393 4,002 8,104
Board and Chief 1991 263,781 13,121 4,191 7,913
Executive Officer,
Director
James C. Holcombe 1993 247,160 77,855 11,686 7,075
President and Chief 1992 223,976 92,776 9,940 6,418
Operating Officer, 1991 215,494 10,735 9,538 5,394
Director
David G. Barneby 1993 134,958 25,373 7,985 3,868
Vice President, 1992 130,235 35,791 5,060 3,756
Power Delivery 1991 116,768 3,868 5,648 3,503
Cynthia K. Gilliam(4) 1993 130,548 24,021 8,955 3,964
Vice President, 1992 117,732 24,278 4,580 3,468
Retail Customer 1991 100,844 2,280 6,910 3,005
Operations
Steven W. Rigazio(5) 1993 127,374 23,947 8,384 3,744
Vice President 1992 100,665 21,665 8,025 2,969
Finance and Plan- 1991 83,010 1,974 5,507 2,536
ning, Treasurer,
Chief Financial
Officer
(1) Amounts awarded under the Executive Performance Incentive Plan for the
respective fiscal years.
(2) These amounts represent the personal use of Company automobiles and
reimbursement for payment of taxes thereon.
(3) These amounts represent the Company's contribution to the Company's 401(k)
Plan.
(4) Cynthia K. Gilliam was elected Vice President, Customer Service January 1,
1992. She was Vice President, Human Resources during 1991.
(5) Steven W. Rigazio was elected Vice President and Treasurer, Chief Financial
Officer March 5, 1992. He was Vice President - Planning during 1991.
(6) Current positions reflect new organizational structure approved by the
Board of Directors on October 14, 1993.
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(7) The number and value of the aggregate performance restricted shares under
the Company's Long-Term Incentive Plan as of December 31, 1993, are 4,963
shares and $119,732 for Mr. Lenzie; 4,061 shares and $97,972 for Mr.
Holcombe; 1,191 shares and $28,733 for Mr. Barneby; 1,065 shares and
$25,693 for Mrs. Gilliam; and 930 shares and $22,436 for Mr. Rigazio,
respectively.
LONG-TERM INCENTIVE PLAN - AWARDS IN LAST FISCAL YEAR
Estimated Future Payouts under
Performance Non-Stock Price-Based Plans
or Other Period ----------------------------------------
Until Maturation Threshold Target Maximum
Name or Payout (#) (#) (#)
- -------------------- ---------------- ------------ ------------ ------------
Charles A. Lenzie... Three Years 2,328 shares 4,656 shares 5,820 shares
James C. Holcombe... Three Years 1,905 shares 3,810 shares 4,763 shares
David G. Barneby.... Three Years 559 shares 1,117 shares 1,396 shares
Cynthia K.Gilliam... Three Years 500 shares 999 shares 1,249 shares
Steven W. Rigazio... Three Years 436 shares 872 shares 1,090 shares
The Company's Long-Term Incentive Plan (LTIP) gives participants the
opportunity to earn awards based on the Company's performance over a three-year
performance period. The performance period for the 1993 LTIP awards (Awards)
began January 1, 1993 and ends December 31, 1995. The Awards of LTIP incentive
compensation units (Units) earned by the named executive officers will be
determined at the end of the three-year performance period based on the ranking
of the Company's total shareholder return (i.e., stock price appreciation plus
reinvested dividends) in comparison to the Merrill Lynch Electric Utilities
Index (Index). Common stock of the Company at the rate of one share per Unit
earned will be paid to LTIP participants at the end of the performance period.
Participants would earn a percentage of the Award based on the percentile rank
of the Company's total shareholder return in comparison to the Index, as
follows:
Percentile Rank of Company Percentage of Award Earned
-------------------------- --------------------------
Less than 40th 0
40th 50%
50th 75%
60th 90%
75th 100%
90th 125%
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COMPENSATION COMMITTEE REPORT
The Compensation Committee of the Board of Directors (the "Committee") is
responsible for establishing the philosophy for compensating the Company's
executives and ensuring that all aspects of the Executive Compensation Program
are administered consistent with the philosophy. During 1993, the Committee met
four times. This report describes the Committee's decisions during 1993 in
determining the compensation earned by the Chief Executive Officer (the "CEO"),
and all other officers as a group.
The Omnibus Budget Reconciliation Act of 1993 contained provisions on the
deductibility of executive compensation. All compensation paid to the CEO and
other proxy-named executives for 1993 is fully deductible. It is the
Committee's intention to maintain the complete deductibility in the future,
however, we reserve the right to deviate from this policy when and if we
determine it is in the best interests of the Company and its shareholders to do
so.
The Company has retained the services of Towers Perrin, a compensation
consulting firm, to assist the Committee in connection with the performance of
its various duties. Towers Perrin has been retained in this capacity since
1990. Towers Perrin provides advice to the Committee with respect to the
reasonableness of compensation paid to the officers of the Company.
Overall Objectives
The primary objective of the Executive Compensation Program is to motivate
the officers to achieve the Company's goals of providing the Company's
shareholders with a competitive return on their investment while at the same
time providing its customers with high quality service at a competitive price.
The compensation philosophy, therefore, bases a significant portion of each
officer's total compensation on the achievement of these goals.
Compensation Philosophy
The Executive Compensation Program is reviewed on an annual basis to ensure
its alignment with the Company's compensation philosophy. To retain and attract
an experienced results-oriented team, the Company's compensation philosophy is
to provide a total compensation opportunity between the median and 75th
percentile in comparison to both regulated and nonregulated businesses. Each
year, the Committee reviews data from the Edison Electric Institute (the "EEI")
survey of electric utilities and Towers Perrin's annual management compensation
survey. In the following performance graph on page 13, the Company's total
return to shareholders is compared to that of the 65 electric utilities
comprising the Solomon Electric Utilities Index and the S&P 500 Stock Index. The
overwhelming majority of the companies in the Solomon Electric Utilities Index
participate in the EEI survey database. The companies in the Towers Perrin
survey parallel the type and mix of companies comprising the S&P 500 Stock
Index.
The Executive Compensation Program for the officers of the Company is
comprised of base salary, annual performance-related awards and a long-term
incentive plan. Annual base salary increases reflect the individual's
performance and contribution over several years. Annual incentive awards vary
directly with annual corporate performance for the CEO and the Chief Operating
Officer (the "COO"). Corporate performance is weighted 60% and individual goal
achievement is weighted 40% for all other officers. Individual officer goals are
established annually in support of the corporate performance goals. The long-
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term incentive plan approved by the Company's shareholders in 1993 provides
officers with the opportunity to earn shares of common stock based on the
Company's total return to shareholders compared to a peer group of electric
utilities.
The remainder of this report discusses the administration of the 1993
Executive Compensation Program with respect to the CEO and the other officers as
a group.
1993 Base Salary
The 1993 base salaries of the CEO and other officers as a group were
established by the Committee taking into account salary trends and the
individual's performance. The 1993 base salaries of the CEO and the other
officers as a group represent 75% and 78% of their total compensation
respectively. The CEO's salary was increased 15% and all other officers as a
group by an average of 13% over their 1992 levels. For 1993, the CEO's salary
was at the median for comparable positions in the electric utility industry.
1993 Incentive Awards
The corporate component of the 1993 incentive awards was based on three
corporate performance goals weighted as follows-- corporate earnings, 50%;
customer satisfaction, 30%; and cost control, 20%. Specific corporate
performance goals were established at the beginning of the year. The CEO and
COO's 1993 annual incentive award is based entirely on the three corporate
goals. Achievement of the corporate performance goals and individual goals were
evaluated and taken into consideration in determining 1993 annual incentive
awards for all other officers.
The 1993 incentive award earned by the CEO was 32% of salary. This award
reflected the Company exceeding its corporate earnings and cost control goals,
while the targeted level of customer satisfaction, as determined by the results
of an independent customer satisfaction survey, was not achieved. The incentive
awards for all other officers as a group was an average of 22% of salary.
Under the provisions of the Company's Long-Term Incentive Plan, the
officers of the Company were granted a total number of 13,181 stock units. The
CEO's grant of 4,656 stock units was based on the Company's philosophy of
providing the opportunity to earn total compensation between the 50th and 75th
percentile of regulated and nonregulated businesses. The actual number of stock
units earned by the CEO and all officers as a group will be determined in 1996
based on the Company's total shareholders return as compared to a peer group of
electric utilities for the period 1993-1995 or such other measure as the
Committee deems appropriate.
COMPENSATION COMMITTEE
Arthur M. Smith
Fred D. Gibson, Jr.
John L. Goolsby
Jerry Herbst
Frank E. Scott
Jelindo A. Tiberti
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PERFORMANCE GRAPH
The following graph shows a five-year comparison of cumulative total
returns for the Company's common stock, the S&P 500 Stock Index, the Merrill
Lynch Electric Utilities Index and the Solomon Electric Utilities Index. The
Merrill Lynch Electric Utilities Index no longer appears to meet the criteria of
a published industry index under the Securities and Exchange Commission's rules.
Therefore, going forward, the Company has chosen to compare itself to the
Solomon Electric Utilities Index.
Comparison of Five-Year Cumulative Total Return Among
Nevada Power Company Common Stock (NPC), S&P 500 Stock Incex (S&P 500),
Merrill Lynch Electric Utilities Index (Merrill) & Solomon Electric
Utilities Index (Solomon)
Measurement Period
(Fiscal Year Covered) NPC S&P 500 Merrill Solomon
- --------------------- ------- ------- ------- -------
Measurement Pt. - 12/31/88 $100 $100 $100 $100
Fiscal Year Ended - 12/31/89 $135 $132 $133 $132
Fiscal Year Ended - 12/31/90 $124 $127 $135 $134
Fiscal Year Ended - 12/31/91 $119 $166 $174 $173
Fiscal Year Ended - 12/31/92 $157 $179 $186 $186
Fiscal Year Ended - 12/31/93 $171 $197 $207 $208
Assumes $100 invested on 12/31/88 in Nevada Power Company common stock, S&P 500
Stock Index, Merrill Lynch Electric Utilities Index and Solomon Electric
Utilities Index with dividend reinvestment over period.
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RETIREMENT BENEFITS
The Company's Qualified Retirement Plan (the "Retirement Plan") for
salaried employees provides noncontributory benefits based upon both years of
service and the employee's highest consecutive 5-year average annual
compensation. Annual compensation includes salary and bonus amounts paid as
shown in the Summary Compensation Table. The credited years of service under
the Retirement Plan at December 31, 1993 for each of the individuals listed in
the above table are as follows: Charles A. Lenzie, 18 years; James C. Holcombe,
4 years; David G. Barneby, 26 years; Cynthia K. Gilliam, 18 years; and Steven W.
Rigazio, 8 years. The Retirement Plan includes an early retirement option under
which a covered employee may receive an actuarially reduced benefit upon early
retirement between ages 55 and 65.
The following table presents the noncontributory annual benefits payable
for life under the Retirement Plan to employees, assuming normal retirement at
age 65 in the current year under a single life annuity benefit. The amounts
shown below represent the application of the Retirement Plan formula to the
amounts of compensation and years of service shown. The amounts do not include
Social Security benefits upon retirement. Benefits payable under the Retirement
Plan must be in compliance with the applicable guidelines or maximums
prescribed in the Employees Retirement Income Security Act of 1974 as currently
stated or as adjusted from time to time.
Maximum Annual Benefit for Specific
Years of Credited Service at Retirement
Highest ----------------------------------------------------------
Consecutive 5-Year
Average Earnings 15 Years 20 Years 25 Years 30 Years 35 Years 40 Years
- ------------------ -------- -------- -------- -------- -------- --------
$150,000 ........ $38,876 $51,834 $ 64,793 $ 77,751 $ 90,710 $103,668
200,000 ........ 52,376 69,834 87,293 104,751 118,800 118,800
250,000 ........ 64,245 87,834 109,793 118,800 118,800 118,800
300,000 ........ 64,245 87,834 109,793 118,800 118,800 118,800
350,000 ........ 64,245 87,834 109,793 118,800 118,800 118,800
The Company has adopted a Supplemental Executive Retirement Plan (the
"SERP") in addition to the regular Retirement Plan. Participation is limited to
such officers as the Board of Directors may select. Presently, 27 active or
retired designated officers and managers, including the five highest paid
officers of the Company, participate in the SERP. Each selected participant who
retires on or after age 62 with at least 25 years of service will receive a SERP
retirement benefit equivalent to 60% of their highest consecutive 3-year average
annual earnings reduced by the Retirement Plan benefit. Annual earnings include
wages, salary, bonus earned and the value of all other compensation amounts as
shown in the Summary Compensation Table. Reduced benefits apply to participants
who retire with less than 25 years of service or before age 62. The credited
years of service under the SERP at December 31, 1993 for each of the individuals
listed in the above table are as follows: Charles A. Lenzie, 19 years; James C.
Holcombe, 7 years; David G. Barneby, 27 years; Cynthia K. Gilliam, 19 years; and
Steven W. Rigazio, 9 years.
The following table sets forth, by example, maximum annual benefits upon
retirement on or after age 62 under the combined regular Retirement Plan and the
SERP. The amounts shown below represent the application of the SERP formula to
the highest consecutive 3-year average annual earnings and years of service
shown.
14
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Maximum Annual Benefit for Specific
Years of Service at Retirement
Highest Consecutive -----------------------------------------
3-Year Average Earnings 15 Years 20 Years 25 Years
- ---------------------------- --------- --------- ---------
$150,000 .............. $ 67,500 $ 78,750 $ 90,000
200,000 .............. 90,000 105,000 120,000
250,000 .............. 112,500 131,250 150,000
300,000 .............. 135,000 157,500 180,000
350,000 .............. 157,500 183,750 210,000
RETIREMENT PLAN FOR OUTSIDE DIRECTORS
The Company has established a Retirement Plan for the Outside Directors
(the "RPOD"). The RPOD provides a maximum annual life benefit equivalent to the
annual fee being paid to the Outside Director at the date of retirement. With
respect to an Outside Director first elected after May 11, 1990, receipt of the
maximum annual life benefit under the RPOD is subject to (a) minimum service for
5 years as an Outside Director and (b) retirement on or before the first day of
the month following such Outside Director's 72nd birthday. The annual benefit
received by an Outside Director elected after May 11, 1990, who has met the
minimum 5-year service requirement, will be reduced by $500 for each year such
Outside Director retires after their 65th birthday but prior to their 72nd
birthday.
15
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SELECTION OF INDEPENDENT PUBLIC ACCOUNTANTS
The Board of Directors has selected Deloitte & Touche as the Company's
independent public accountants for 1994 at the recommendation of the Audit
Committee. Representatives of Deloitte & Touche will be present at the 1994
Annual Meeting. They will have an opportunity to make a statement if they so
desire and will be available to respond to appropriate questions.
SUBMISSION OF SHAREHOLDER PROPOSALS
Shareholders are advised that any shareholder proposal intended for
consideration at the 1995 Annual Meeting must be received by the Company on or
before November 14, 1994 to be included in the proxy materials for the 1995
Annual Meeting. It is recommended that shareholders submitting proposals direct
them to the Secretary of the Company and utilize Certified Mail-Return Receipt
Requested.
ANNUAL REPORT
For further information with respect to the Company, reference is made to
the 1993 Annual Report of the Company, a copy of which has been mailed to all
shareholders of the Company.
OTHER MATTERS
The management knows of no matters to be presented at the meeting other
than those mentioned above. However, if any other matters do properly come
before the meeting, it is intended that the shares represented by proxies will
be voted with respect thereto in accordance with the judgment of the persons
voting thereon.
Richard L. Hinckley
Secretary
Las Vegas, Nevada
March 14, l994
16
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1993 ANNUAL MEETING MINUTES
Copies of the minutes of the Company's 1993 Annual Meeting of Shareholders
and/or the Company's 1993 Annual Report on Form 10-K, including the financial
statements and the schedules thereto filed with the Securities and Exchange
Commission for the Company's most recent fiscal year, will be furnished upon
written request to shareholders without charge. A copy may be obtained by
writing to Shareholder Services, Nevada Power Company, P.O. Box 230, Las Vegas,
Nevada 89151.
17
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APPENDIX A
LIST OF GRAPHIC AND IMAGE MATERIAL
1. Map of the location of the 1994 Annual Meeting of Shareholders. See the
page following the Notice of Annual Meeting of Shareholders for a
description of the map.
2. Performance Graph. See page 13 of the Proxy Statement for a description of
the Performance Graph in tabular form.
18
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PRELIMINARY
March 14, l994
Dear Shareholder:
You are cordially invited to attend the Annual Meeting of Shareholders of
Nevada Power Company to be held at 2:00 P.M. on May 6, 1994, at the
Sheraton Desert Inn Country Club, Terrace Room, 3145 Las Vegas Boulevard
South, Las Vegas, Nevada. Your Board of Directors looks forward to
greeting personally those shareholders able to attend.
At the meeting, you will be asked to vote in the election of four directors
to three-year terms.
Whether or not you plan to attend, it is important that your shares are
represented at the meeting. Accordingly, you are requested to promptly
vote, sign, date and mail the attached proxy in the envelope provided.
Thank you for your consideration and continued support.
Very truly yours,
Charles A. Lenzie
Chairman of the Board and
Chief Executive Officer
- ---------------------------------------------------------------------------
PROXY CARD
<PAGE>
<PAGE>
FRONT
- --------------------------------------------------------------------------------
DETACH HERE
Date:__________________________, 1994
_____________________________________
(Signature)
_____________________________________
(Signature)
(Joint owners must EACH sign.
Please sign EXACTLY as your
name(s) appear(s) on this card.
When signing as attorney, trustee,
executor, administrator, guardian
or corporate officer, please give
FULL title.)
THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED IN THE MANNER DIRECTED HEREIN BY
THE SIGNING SHAREHOLDER. IF NO DIRECTION IS MADE, THIS PROXY WILL BE VOTED FOR
PROPOSAL 1.
---------------------------------
Reserved Area (Front & Back)
---------------------------------
(TO BE VOTED ON REVERSE SIDE)
<PAGE>
<PAGE>
BACK
- --------------------------------------------------------------------------------
NEVADA POWER COMPANY
PROXY SOLICITED BY THE BOARD OF DIRECTORS FOR ANNUAL MEETING OF SHAREHOLDERS
May 6, 1994
The signing shareholder hereby appoints Charles A. Lenzie, Mary Lee Coleman
and Conrad L. Ryan, or any one of them, with full power of substitution, the
attorneys and proxies of the signing shareholder to vote all shares of Common
Stock of the Company which the signing shareholder is entitled to vote at the
annual meeting of Nevada Power Company to be held on May 6, 1994, at 2:00 p.m.
and at any and all adjournments of such meeting.
(1) ELECTION OF DIRECTORS FOR all nominees listed WITHHOLD AUTHORITY ___
to three-year terms below ___ (except as marked to vote for all
to the contrary below) nominees listed below
(INSTRUCTION: To withhold authority to vote for any individual nominee
strike a line through the nominee's name in the list below.)
John L.Goolsby Jerry Herbst Frank E. Scott Jelindo A. Tiberti
(2) IN THEIR DISCRETION, THE PROXIES ARE AUTHORIZED TO VOTE UPON SUCH OTHER
BUSINESS AS MAY PROPERLY COME BEFORE THE MEETING.
(TO BE SIGNED ON REVERSE SIDE)
<PAGE>
