<PAGE>
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. 1)
Filed by the Registrant [X]
Filed by a Party other than the Registrant [_]
Check the appropriate box:
[_] Preliminary Proxy Statement [_] CONFIDENTIAL, FOR USE OF THE
COMMISSION ONLY (AS PERMITTED BY
RULE 14A-6(E)(2))
[X] Definitive Proxy Statement
[_] Definitive Additional Materials
[_] Soliciting Material Pursuant to Section 240.14a-11(c) or Section 240.14a-12
SIERRA PACIFIC RESOURCES
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(Name of Registrant as Specified In Its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[_] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
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(2) Aggregate number of securities to which transaction applies:
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(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which
the filing fee is calculated and state how it was determined):
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(4) Proposed maximum aggregate value of transaction:
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(5) Total fee paid:
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[_] Fee paid previously with preliminary materials.
[_] Check box if any part of the fee is offset as provided by Exchange
Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee
was paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
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(2) Form, Schedule or Registration Statement No.:
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(3) Filing Party:
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(4) Date Filed:
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Notes:
<PAGE>
[LOGO OF SIERRA PACIFIC]
Malyn K. Malquist
Chairman of the Board, President
and Chief Executive Officer March 31, 1998
To Our Stockholders:
On behalf of the Board of Directors, I am pleased to invite you to
attend the 1998 Annual Meeting of the Stockholders of Sierra Pacific Resources,
which will be held at 10:00 a.m., local time, on Monday, May 18, 1998, at the
Peppermill Hotel, 2707 South Virginia Street, Reno, Nevada. The formal notice
of the Annual Meeting is set forth on the next page.
The matters to be acted upon at the meeting are described in the
attached Proxy Solicitation Statement. During the meeting, you and other
stockholders will have the opportunity to ask questions and comment on the
Company's operations. Directors, officers, and other employees of the Company
will be made available to visit with you before and after the formal meeting to
answer whatever questions you may have. In addition to the matters set forth
herein, we will also discuss 1997 financial results and our strategic plan for
meeting the challenges and seizing the opportunities made available from the
profound changes taking place in our industry. Refreshments will be available
at the conclusion of the meeting.
Your views and opinions are very important to the Company. Whether or
not you are able to be present at the Annual Meeting, we would appreciate it if
you would please review the enclosed Annual Report and Proxy Solicitation
Statement. Regardless of the number of shares you own, please execute your
proxy card and promptly return it to us in the postpaid envelope.
We greatly appreciate the interest expressed by our stockholders, and
we are pleased that in the past so many of you have voted your shares either in
person or by proxy. We hope that you will continue to do so and urge you to
return your proxy card as soon as possible.
Sincerely,
/s/ M. K. Malquist
<PAGE>
SIERRA PACIFIC RESOURCES
6100 Neil Road
Reno, Nevada 89511
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD MAY 18, 1998
--------------
NOTICE IS HEREBY GIVEN that the Annual Meeting of Stockholders of
Sierra Pacific Resources will be held at the Peppermill Hotel, 2707 South
Virginia, Reno, Nevada, on Monday, May 18, 1998, at 10:00 a.m., Pacific Daylight
Time, for the following purposes:
(1) To elect three members of the Board of Directors to serve until
the Annual Meeting in 2001, or until their successors are elected
and qualified.
(2) To transact such other business as may properly come before the
meeting, and any or all adjournments thereof;
all as set forth in the Proxy Statement accompanying this notice.
Only holders of record of Common Stock at the close of business on
March 13, 1998, will be entitled to vote at the meeting, and any or all
adjournments thereof. The transfer books will not be closed.
Your continued interest as a stockholder in the affairs of your
Company, its growth and development is greatly appreciated by the directors,
officers and employees who serve you.
By Order of the Board of Directors
WILLIAM E. PETERSON
Secretary
DATED: March 31, 1998
IF YOU ARE A HOLDER OF COMMON STOCK OF THE COMPANY AND DO NOT EXPECT TO ATTEND
THE ANNUAL MEETING OF STOCKHOLDERS, IT WILL BE HELPFUL TO US IF YOU WILL READ
THE ACCOMPANYING PROXY STATEMENT, THEN MARK, SIGN, DATE AND RETURN THE ENCLOSED
PROXY IN THE ENVELOPE PROVIDED, AS EARLY AS POSSIBLE.
We thank you for your cooperation.
MAILING ADDRESS:
P. O. Box 30150
Reno, Nevada 89520
<PAGE>
SIERRA PACIFIC RESOURCES
6100 NEIL ROAD
RENO, NEVADA 89511
PROXY STATEMENT
----------------
GENERAL
This proxy statement is furnished to the holders of Common Stock of Sierra
Pacific Resources (hereinafter referred to as the "Company") in connection with
the solicitation of proxies to be voted at the Annual Meeting of Stockholders to
be held on Monday, May 18, 1998. The enclosed proxy is solicited on behalf of
the Board of Directors of the Company. Every properly signed proxy will be
voted.
A person giving the enclosed proxy has the power to revoke it at any time
before it is exercised at the meeting, by written notice to the Secretary of the
Company, by sending a later dated proxy, or by revoking it in person at the
meeting.
The Company will bear the cost of solicitation of proxies by management,
including charges and expenses of brokerage firms and others for forwarding
solicitation material to beneficial owners of Common Stock. In addition to the
use of mail, proxies may be solicited by personal interview, by telephone, by
telegraph or electronic wireless medium, or by certain employees without
compensation. Beacon Hill Partners, Inc., will assist in the solicitation of
proxies at an estimated cost of $4,000. The approximate date on which this
proxy statement and the enclosed proxy will first be sent to stockholders is
March 31, 1998.
STOCK OUTSTANDING AND VOTING RIGHTS
Only holders of Common Stock of record on the stock transfer books of the
Company at the close of business on March 13, 1998 (the "record date") will be
entitled to vote at the meeting. There were 30,940,819 shares of Common Stock
outstanding on the record date. Each share of Common Stock is entitled to one
vote and a fraction of a share is entitled to the appropriate fraction of a
share vote. Under the Company's By-Laws, a majority of the shares issued and
outstanding and entitled to vote will constitute a quorum, and a majority of the
voting power of shares represented at the meeting will be sufficient to elect
Directors. Abstentions and broker non-votes will be counted for purposes of
determining a quorum and the number of shares, which will constitute a majority
of the voting power represented at the meeting. Since a majority of the voting
power represented at the meeting is required to approve most proposals, and to
elect directors, abstentions and non-votes will have the practical effect of a
vote against a proposal.
ELECTION OF DIRECTORS
All Directors elected at the meeting will serve a three-year term ending at
the Annual Meeting in 2001, or until their successors are elected and qualified.
The shares represented by the enclosed proxy will be voted to elect the three
Nominees unless such authority has been withheld. If any Nominee becomes
unavailable for any reason, which is not anticipated, the shares represented by
the enclosed proxy may be voted for such other persons as may be selected by the
Board of Directors of the Company.
The following information is furnished with respect to each Nominee for
election as a Director and for each Director whose term of office will continue
after the meeting.
-1-
<PAGE>
<TABLE>
<CAPTION>
NAME OF DIRECTOR PRINCIPAL OCCUPATION DIRECTOR
AND NOMINEE AGE DURING LAST 5 YEARS SINCE
- -----------------------------------------------------------------------------------------------------------
NOMINEES FOR ELECTION FOR A TERM OF THREE YEARS EXPIRING IN 2001
<S> <C> <C> <C>
James R. Donnelley 62 Vice Chairman of the Board of R.R. Donnelley & Sons Company 1987
since July 1990. He has been a director of that company since
1976. He is also a director of Pacific Magazines & Printing
Limited and Chairman of the Board of National Merit
Scholarship Corporation.
Malyn K. Malquist 45 In the first quarter of 1998, Mr. Malquist was elected 1998
Chairman, President & CEO of the Company and its wholly owned
subsidiary, Sierra Pacific Power Company (SPPC). In 1996, he
was named Senior Vice President, Distribution Services
Business Group, and Principal Operations Officer. He served
as Senior Vice President and Chief Financial Officer of the
Company from 1994 to 1996. Prior to joining the company, he was
with San Diego Gas & Electric, where he was Treasure in 1990 and
Vice President in 1993.
James L. Murphy 68 Certified public accountant and retired partner of and 1992
consultant to Grant Thornton, L.L.P., an international
accounting and management consulting firm. He is the owner,
independent trustee and general partner of several real estate
development projects and numerous rental properties. He is
also a retired Colonel of the United States Air Force Reserve.
He has been a Director of SPPC since 1990.
<CAPTION>
PRINCIPAL OCCUPATION DIRECTOR
NAME OF DIRECTOR AGE DURING LAST 5 YEARS SINCE
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DIRECTORS WHOSE TERM EXPIRES IN 1999
<S> <C> <C> <C>
Krestine M. Corbin 60 President and Chief Executive Officer of Sierra Machinery 1989
Incorporated since 1984 and a director of that Company since
1980. She also serves on the Twelfth Federal Reserve Bank
District Board.
Harold P. Dayton 75 Retired since 1985; formerly President of Dayton's Furniture, 1984
Inc. Mr. Dayton has been a director of SPPC since 1967.
Richard N. Fulstone 70 President and General Manager of R.N. Fulstone Company since 1986
1957 and President and General Manager of F.M. Fulstone, Inc.,
since 1982 (both companies engage in farming, cattle ranching,
and investments).
Dennis E. Wheeler 55 Chairman of the Board, President and Chief Executive Officer 1990
of Coeur d' Alene Mines Corporation since 1986.
</TABLE>
-2-
<PAGE>
<TABLE>
<CAPTION>
PRINCIPAL OCCUPATION DIRECTOR
NAME OF DIRECTOR AGE DURING LAST 5 YEARS SINCE
- --------------------------------------------------------------------------------------------------------
DIRECTORS WHOSE TERM EXPIRES IN 2000
<S> <C> <C> <C>
Edward P. Bliss 65 Partner, Loomis, Sayles & Co., Inc., an investment counsel 1990
firm in Boston, Massachusetts. He is also a director of
Seaboard Oil Company of Midland, Texas.
Theodore J. Day 48 Senior Partner, Hale Day Gallagher Co., a real estate 1987
brokerage and investment company.
Robert B. Whittington 70 Retired newspaper executive; former President, Gannett West 1985
Newspaper Group and Director, Gannett Co., Inc.; former
publisher, Reno Evening Gazette and Nevada State Journal.
</TABLE>
All Directors of Sierra Pacific Resources are Directors of its wholly-owned
subsidiary, SPPC. Of the other wholly-owned subsidiaries, Messrs. Malquist and
Murphy are Directors of Lands of Sierra, Inc.; Messrs. Dayton and Malquist are
Directors of Sierra Gas Holdings Company; Messrs. Day and Malquist are Directors
of Tuscarora Gas Pipeline Company; and Messrs. Malquist and Fulstone are
Directors of Sierra Water Development Company. Mr. Malquist is also a Director
of Sierra Energy Company, Tuscarora Gas Operating Company, Pinon Pine Corp., and
Pinon Pine Investment Co. In addition, Dr. Ronald K. Remington, President of
Great Basin College, is a Director of SPPC.
DIRECTOR'S COMPENSATION
Each non-employee Director is paid an annual retainer of $30,000. In keeping
with the Board's policy to tie management and director compensation to overall
Company performance, and to increase Director share ownership, on February 12,
1996, the Board amended the Non-Employee Director Stock Plan ("Plan") to require
that a minimum of $20,000 of the annual retainer be paid in Company Common
Stock. Under other provisions of the Plan, several non-employee Directors
elected to receive more Company Stock than the required minimum. This
requirement, adopted by an amendment to the Plan in 1996, increased the minimum
amount of the annual retainer Directors must take in Company Stock to 66-2/3%.
It also insures that all Directors will have a minimum of $100,000 worth of
Company Stock after five years of service. This Plan amendment, along with the
elimination of the director Retirement Plan (described below) in 1996, insures
that all Directors will always maintain a substantial shareholder investment in
the Company. Non-employee Directors of the Company, its subsidiaries, and
members of Board committees are paid $1,200 for each Board or Committee meeting
attended, not to exceed two meeting fees per day regardless of the number of
meetings attended. Directors also receive a full meeting fee or partial meeting
fee (depending on distance) for travel to attend meetings away from the
Director's home. In consideration for their additional responsibility and time
commitments, non-employee Directors serving as Committee Chairpersons are also
paid an additional $1,000 quarterly.
The Company's Retirement Plan for Outside Directors, adopted March 6, 1987,
was terminated on June 25, 1996. The actuarial value of the vested benefit as of
May 20, 1996, for each Director, was converted into "phantom stock" of the
Company at its fair market value on May 20, 1996. The "phantom stock" is held
in an account to be paid at the time of the Director's departure from the Board.
All "phantom stock" earns dividends at the same rate as listed stock from the
date of conversion and is deemed reinvested in additional shares of such stock.
-3-
<PAGE>
BOARD AND COMMITTEE MEETINGS
The Board of Directors maintains the following standing committees: Audit,
Compensation and Organization, and Planning and Finance. The Company's wholly-
owned subsidiary, SPPC, maintains a Pension Committee, which oversees the
pension and benefits program for all affiliates, and an Environmental Committee.
The Board may also establish ad hoc committees for specific projects when
required.
The Audit Committee was established in 1972 to review and confer with the
Company's independent auditors and to review the Company's internal auditing
program and procedures to ensure that its operations are in compliance with
applicable laws, regulations and Company policies. The Directors presently
serving on the Audit Committee are Ms. Corbin (Chair), and Messrs. Dayton,
Bliss, Murphy and Wheeler. The Audit Committee met three times in 1997.
The Compensation and Organization Committee was formed in 1991 to assume the
duties and responsibilities of the previous Personnel & Organization Committee.
Among its other duties, this Committee considers nominations to the Board of
Directors as recommended by stockholders or others. To be considered,
nominations must be submitted in writing to the Committee in care of the
Secretary of the Company. This Committee also reviews Director and executive
performance, recommends appointments to Board Committees and reviews and
recommends to the Board any changes in directors' fees or compensation
adjustments for all officers and executives of the Company. Directors presently
serving on the Compensation and Organization Committee are Messrs. Day, Dayton,
Donnelley (Chair)., Fulstone, and Whittington. The Committee met four times in
1997.
The Planning and Finance Committee was formed in October, 1992 to assume the
duties and responsibilities of the previously separate Finance and Planning
Committees. This Committee reviews and recommends to the Board the long-range
goals of the parent and subsidiary companies and the type and amount of
financing necessary to meet those goals. Ms. Corbin and Messrs. Donnelley,
Fulstone, Murphy, and Wheeler (Chair) presently serve on this Committee. The
Planning and Finance Committee met four times in 1997, including two sessions
with the full Board.
The Environmental Committee was formed in 1992 to assist the Board in
overseeing the Company's environmental policy and performance and to provide
guidance to executive management on environmental issues. Messrs. Dayton,
Fulstone, Wheeler, and Dr. Remington (Chair) presently serve on this Committee.
The Committee met two times in 1997.
The Pension Committee was formed to oversee SPPC's pension and 401-K benefit
programs; to appoint, discharge and monitor plan money managers; and to review
and discharge the fiduciary duties delegated to the Committee under the
Company's benefit plans. Messrs. Bliss, Day, Murphy (Chair), and Whittington
presently serve on this Committee. The Committee met five times in 1997.
There were four regularly scheduled Board meetings held during 1997. The
aggregate meeting attendance of all members of the Board was 95% for Board and
Committee meetings.
-4-
<PAGE>
SUMMARY COMPENSATION TABLE
The following table sets forth information about the compensation of the
Chief Executive Officer and each of the four most highly compensated officers
for services in all capacities to the Company and its subsidiaries.
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------------------------------
Long-Term Compensation
-------------------------------------------
Annual Compensation Awards Payouts
-------------------------------------------------------------------------------
Securities
Other Under-
Annual Restricted lying All Other
Name and Incentive Compen- Stock Options/ LTIP Compen-
Principal Salary Pay sation Awards SARS Payouts sation
Position Year ($) ($) ($) ($) (#) ($) ($)
(a) (b) (c) (d) (2) (e) (3) (f) (g) (h)(4) (i) (5)
- ---------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Walter M. Higgins
Chairman, 1997 361,497 0 6,020 0 30,000 0 47,175
President and 1996 334,231 219,869 0 0 9,594 181,193 35,054
Chief Executive Officer 1995 314,423 184,064 1,123 0 11,960 0 21,600
Malyn K. Malquist 1997 212,803 92,198 2,052 0 14,000 101,192 15,279
Senior Vice President, 1996 194,077 95,335 0 0 3,504 51,770 9,380
Distribution Services 1995 185,769 77,903 297 0 4,231 0 13,219
Business Group & Principal
Operations Officer, SPPC
William E. Peterson 1997 207,757 78,184 17,412 0 10,000 101,192 29,488
Senior Vice President, 1996 191,923 85,445 3,417 0 3,504 70,508 20,982
General Counsel and 1995 190,000 77,903 6,157 0 4,231 0 14,876
Corporate Secretary
Mark A. Ruelle (1) 1997 143,308 65,269 3,808 0 8,384 0 77,329
Senior Vice President, 1996 0 0 0 0 0 0 0
Chief Financial Officer 1995 0 0 0 0 0 0 0
and Treasurer
Gerald W. Canning 1997 150,364 45,916 6,035 0 6,000 61,505 16,200
Vice President, Electric 1996 147,692 46,232 1,423 0 2,066 38,602 14,350
Production & Fuels, SPPC 1995 139,769 46,510 5,600 0 2,570 0 9,252
- ---------------------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) Mr. Ruelle joined Sierra Pacific Resources and SPPC as Senior Vice
President, Chief Financial Officer and Treasurer in March 1997.
(2) Amounts represent incentive pay received pursuant to the Company's "pay for
performance" team incentive plan approved by Directors in May 1994.
(3) No perquisites in the aggregate exceeded the lesser of $50,000 or 10% of
salary and bonus for any named executive. Accordingly, no amount for
perquisites have been reported.
(4) Long term incentive payout relates to performance share payout for the
three-year period January 1, 1995 through December 31, 1997.
(5) Amounts of All Other Compensation include the following for 1997:
. Company contributions under the 401(k) Deferred Compensation Plan for
all administrative employees and the executive officers, pursuant to
which the Company or its subsidiaries match 50% of each executive
officer's deferral up to 6% of salary. In 1997, the Company matching
amount was $4,750 for Mr. Higgins, $4,750 for Mr. Malquist, $4,750 for
Mr. Peterson, $1,471 for Mr. Ruelle, and $4,750 for Mr. Canning.
. Company contributions to the Non-Qualified Deferred Compensation Plan
for Messrs. Higgins, Malquist, Peterson, Ruelle and Canning were
$34,108, $8,595, $21,375, and $8,322. The additional income on
-5-
<PAGE>
earnings contributed by Messrs. Higgins, Malquist, Peterson, and
Canning which was in excess of 120% of the federal rate were $763,
$644, $1,426, and $1,996.
. Imputed income on group term life insurance premiums paid by the
company for Messrs. Higgins, Malquist, Peterson, Ruelle and Canning was
$1,152, $560, $824, $140, and $352.
. Insurance premiums paid for Executive Term Life Policies for Messrs.
Higgins, Malquist, Peterson, Ruelle, and Canning were $6,402 , $730,
$1,113, $290, and $780, respectively.
. Mr. Ruelle received a payment of $60,000 from SPPC as an inducement to
accept employment. In addition, the company paid $15,428 in moving
expenses for Mr. Ruelle.
OWNERSHIP OF STOCK BY DIRECTORS, NOMINEES
FOR DIRECTORS, EXECUTIVE OFFICERS AND
CERTAIN BENEFICIAL OWNERS
Voting Stock
So far as the Company knows, no person, firm or corporation owned
beneficially more than 5% of the shares of Common Stock outstanding on the
record date.
The table below sets forth the shares of Sierra Pacific Resources Common
Stock beneficially owned by each director, nominee for director, the Chief
Executive Officer, and the four other most highly compensated executive
officers. No director, nominee for director or executive officer owns, nor do
the directors and executive officers as a group own, in excess of one percent of
the outstanding Common Stock of the Company. Unless otherwise indicated, all
persons named in the table have sole voting and investment power with respect to
the shares shown.
<TABLE>
<CAPTION>
SHARES
BENEFICIALLY PERCENT OF TOTAL SHARES
OWNED AS OF OUTSTANDING AS OF
NAME OF DIRECTOR OR NOMINEE FEBRUARY 28, 1998 FEBRUARY 28, 1998
- -------------------------------- --------------------- -------------------------------
<S> <C> <C>
Edward P. Bliss 13,090
Krestine M. Corbin 9,406
Theodore J. Day 19,467
Harold P. Dayton, Jr. 11,701
James R. Donnelley 17,373 No director or nominee
Richard N. Fulstone 13,920 for director owns in excess
Walter M. Higgins 100 of one percent.
Malyn K. Malquist 14,888
James L. Murphy 9,445
Dennis E. Wheeler 8,379
Robert B. Whittington 12,202
---------------------
129,971
=====================
</TABLE>
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<PAGE>
<TABLE>
<CAPTION>
SHARES
BENEFICIALLY PERCENT OF TOTAL SHARES
OWNED AS OF OUTSTANDING AS OF
EXECUTIVE OFFICERS FEBRUARY 28, 1998 FEBRUARY 28, 1998
- --------------------------------- --------------------- -------------------------------
<S> <C> <C>
Walter M. Higgins 100
Malyn K. Malquist 14,888
William E. Peterson 13,129 No executive officer owns
Mark A. Ruelle 3,165 in excess of one percent.
Gerald W. Canning 7,881
---------------------
39,163
=====================
All directors and executive officers
as a group (a) (b) (c) 178,683
=====================
</TABLE>
- ---------------------------------
(a) Includes shares acquired through participation in the Employee Stock
Purchase Plan (terminated in 1996) and 401(k) Plan.
(b) The number of shares beneficially owned includes shares which the Executive
Officers currently have the right to acquire pursuant to stock options
granted and performance shares earned under the Executive Long-Term
Incentive Plan. Shares beneficially owned pursuant to stock options
granted to Messrs. Higgins, Malquist, Peterson, Ruelle, and Canning, and
directors and executive officers as a group are -0-, 10,817, 10,287, 2,795,
6,017, and 42,441 shares, respectively. Shares beneficially owned as a
result of performance shares earned by Messrs. Higgins, Malquist, Peterson,
Ruelle Canning, and all officers as a group are 0, 1,350, 1,234, 0, 1025
and 6,136, respectively.
(c) Included in the shares beneficially owned by the Directors are 65,290
shares of "phantom stock" discussed in the Section titled "Director
Compensation."
-7-
<PAGE>
OPTIONS/SAR GRANTS IN LAST FISCAL YEAR
The following table shows all grants of options to the named executive
officers of Sierra Pacific Resources and SPPC in 1997. Pursuant to Securities
and Exchange Commission (the "SEC") rules, the table also shows the present
value of the grant at the date of grant. The exercise price of all options is
the market value of the stock as listed on the New York Stock Exchange at the
time the options are granted.
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------------
Individual Grants (1)
- ------------------------------------------------------------------------------------------
Percent of Total
Number of Options/SARS
Securities Granted to Exercise Grant
underlying Employees of Base Date
Options/SARS in Fiscal Price Expiration Present
Name Granted Year ($/Sh) Date Value
(a) (b) (c) (d) (e) (f) (2)
- --------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Walter M. Higgins 30,000 27.2 $28.75 1/1/07 $107,445
Malyn K. Malquist 14,000 12.7 28.75 1/1/07 50,141
William E. Peterson 10,000 9.1 28.75 1/1/07 35,815
Mark A. Ruelle 8,384 7.6 28.75 1/1/07 30,027
Gerald W. Canning 6,000 5.4 28.75 1/1/07 21,489
- ----------------------------------------------------------------------------------------------------------------
</TABLE>
(1) Under the Executive Long-Term Incentive Plan approved by shareholders in
1994, the grants of non-qualifying stock options were made on January 1,
1997. Thirty-three and one-third percent of these grants vest annually
commencing one year after the date of the grant.
(2) The hypothetical grant date present values are calculated under a modified
Black-Scholes Model. The Black-Scholes Model is a mathematical formula used
to value options traded on stock exchanges. The assumptions used in
determining the option grant date present value listed above include the
stock's expected volatility (11.6%), risk free rate of return (6.25%),
projected dividend yield (5.5%), the stock option term (10 years), and an
adjustment for non-transferability or risk of forfeiture during the vesting
period (five years at 3%).
-8-
<PAGE>
AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR
AND FY-END OPTION/SAR VALUES
The following table provides information as to the value of the options
held by the named executive officers at year-end measured in terms of the
closing price of Sierra Pacific Resources Common Stock on December 31, 1997.
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------
Number of Dollar
Securities Value of
Underlying Unexercised
Unexercised in-the-Money
Options/SARS at Options/SARS at
Shares Fiscal Year-End Fiscal Year-End
Acquired on Value Exercisable/ Exercisable/
Name Exercise Realized Unexercisable Unexercisable
(a) (b) (c) (d) (e)(1)
- ------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Walter M. Higgins 12,979 $223,501 0/49,036 $0/$737,853
Malyn K. Malquist 0 0 4,050/20,446 69,794/ 303,719
William E. Peterson 0 0 4,648/16,845 79,963/ 253,998
Mark A. Ruelle 0 0 0/ 8,384 0/ 118,424
Gerald W. Canning 0 0 2,670/10,018 46,113/ 151,010
- ------------------------------------------------------------------------------------------------------
</TABLE>
(1) Pre-tax gain. Value of in-the-money options based on the December 31,
1997, closing trading price less the option exercise price.
-9-
<PAGE>
LONG-TERM INCENTIVE PLANS - AWARDS
IN LAST FISCAL YEAR
The Executive Long-Term Incentive Plan (LTIP) approved by shareholders in
1994 provides for the granting of stock options (both non-qualified and
qualified), stock appreciation rights (SARs), restricted stock performance
units, performance shares and bonus stock to participating employees as an
incentive for performance. Incentive compensation is based on the achievement
of pre-established financial goals for the Company. In 1997, goals were
established for total shareholder return (TSR) compared against the Dow Jones
Utility Index and annual growth in earnings per share (EPS).
The following table provides information as to the performance shares
granted to the named executive officers of Sierra Pacific Resources and SPPC in
1997. Nonqualifying stock options granted to the named executives as part of
the LTIP are shown in the table "Option/SAR Grants in Last Fiscal Year."
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------
Estimated Future Payouts Under Non-Stock
Price-Based Plans
---------------------------------------------------
Performance
Number of or Other
Shares, Period Until
Units or Maturation or Threshold Target Maximum
Name Other Rights Payout $ $ $
(a) (b) (c) (d) (2) (e) (3) (f) (4)
- -----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Walter M. Higgins(1) 4,500 3 years 0 $ 0 $ 0
Malyn K. Malquist 2,000 3 years 28,750 57,500 100,625
William E. Peterson 1,500 3 years 21,563 43,125 75,469
Mark A. Ruelle 1,258 3 years 18,084 36,168 63,293
Gerald W. Canning 800 3 years 11,500 23,000 40,250
- -----------------------------------------------------------------------------------------------------------
</TABLE>
(1) In accordance with the terms of the Plan, at the time of his resignation
Mr. Higgins forfeited all performance shares.
(2) The threshold represents the level of TSR and EPS achieved during the cycle
which represents minimum acceptable performance and which, if attained,
results in payment of 50% of the target award. Performance below the
minimum acceptable level results in no award earned.
(3) The target represents the level of TSR and EPS achieved during the cycle
which indicates excellent performance and which, if attained, results in
payment of 100% of the target award.
(4) The maximum represents the maximum payout possible under the plan and a
level of TSR and EPS indicative of outstanding performance which, if
attained, results in a payment of 175% of the target award.
All levels of awards are made with reference to the price of each
performance share at the time of grant.
-10-
<PAGE>
PENSION PLANS
The following table shows annual benefits payable on retirement at normal
retirement age 65 to elected officers under SPPC's defined benefit plans based
on various levels of remuneration and years of service which may exist at the
time of retirement.
<TABLE>
<CAPTION>
Annual Benefits for Years of Service Indicated
Highest Average Five- -----------------------------------------------------------------------------------------------
Years Remuneration 15 Years 20 Years 25 Years 30 Years 35 Years
- ------------------------ -----------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
$ 60,000 $ 27,000 $ 31,500 $ 36,000 $ 36,000 $ 36,000
$120,000 $ 54,000 $ 63,000 $ 72,000 $ 72,000 $ 72,000
$180,000 $ 81,000 $ 94,500 $108,000 $108,000 $108,000
$240,000 $108,000 $126,000 $144,000 $144,000 $144,000
$300,000 $135,000 $157,500 $180,000 $180,000 $180,000
$360,000 $162,000 $189,000 $216,000 $216,000 $216,000
$420,000 $189,000 $220,500 $252,000 $252,000 $252,000
$480,000 $216,000 $252,000 $288,000 $288,000 $288,000
$540,000 $243,000 $283,500 $324,000 $324,000 $324,000
$600,000 $270,000 $315,000 $360,000 $360,000 $360,000
$660,000 $297,000 $346,500 $396,000 $396,000 $396,000
$720,000 $324,000 $378,000 $432,000 $432,000 $432,000
</TABLE>
SPPC's noncontributory Retirement Plan (Retirement Plan) provides
retirement benefits to eligible employees upon retirement at a specified age.
Annual benefits payable are determined by a formula based on years of service
and final average earnings consisting of base salary and incentive compensation.
Remuneration for the named executives is the amount shown under "Salary" and
"Incentive Pay" in the Summary Compensation Table. Pension costs of the
Retirement Plan to which SPPC contributes 100% of the funding are not and cannot
be readily allocated to individual employees and are not subject to Social
Security or other offsets.
Years of credited service under the qualified plan for Messrs. Higgins,
Malquist, Peterson, Ruelle, and Canning are 4.1, 3.7, 4.6, .9, and 28.1,
respectively.
A Supplemental Executive Retirement Plan (SERP) and an Excess Plan are also
offered to the named executive officers. The SERP is intended to ensure the
payment of a competitive level of retirement income to attract, retain and
motivate selected executives. The Excess Plan is intended to provide benefits
to executive officers whose pension benefits under the Retirement Plan are
limited by law to certain maximum amounts.
In addition, SPPC has entered into an arrangement with Mr. Peterson
crediting him with four years of service for prior years of service with his
previous employer, most of which was dedicated to performing legal services for
the Company, and an additional one-half year credit for each year of service
with the Company for the first ten years of his employment.
-11-
<PAGE>
PERFORMANCE GRAPH
The line graph below compares the yearly percentage change in the
cumulative total stockholder return on the Company's Common Stock against the
cumulative total return of the Standard & Poors (S&P) Composite-500 Index and
the Dow Jones Utilities Index for a five-year period commencing December 31,
1992, and ending December 31, 1997.
COMPARISON OF FIVE-YEAR CUMULATIVE TOTAL RETURN*
AMONG SIERRA PACIFIC RESOURCES, THE S & P 500 INDEX
AND THE DOW JONES UTILITIES INDEX
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------
12/31/92 12/31/93 12/31/94 12/31/95 12/31/96 12/31/97
- ---------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
SIERRA PACIFIC RESOURCES $100 $106 $103 $135 $174 $237
- ---------------------------------------------------------------------------------------------------------
STANDARD & POORS 500 $100 $110 $112 $153 $189 $252
- ---------------------------------------------------------------------------------------------------------
DOW JONES UTILITIES $100 $110 $93 $123 $134 $164
- ---------------------------------------------------------------------------------------------------------
*$100 invested on 12/31/92 in stock or index, including reinvestment of dividends. Fiscal
year ending December 31.
- ---------------------------------------------------------------------------------------------------------
</TABLE>
-12-
<PAGE>
REPORT OF THE COMPENSATION AND ORGANIZATION
COMMITTEE ON EXECUTIVE COMPENSATION
To the Stockholders:
In 1994, Sierra Pacific Resources directors and shareholders approved a
compensation plan designed to tie the pay of the executives to the Company's
overall performance as well as to their own individual achievements as
individuals. 1997 marked the fourth consecutive year of improved results, once
again demonstrating that the plan has been and continues to be a success. To
review, the guiding principles of the pay-for-performance plan are:
. To encourage executive involvement in creating long-term shareholder
value by emphasizing the executive's ownership of Company Stock.
. To tie cash awards to specific goals set for the Company, the executive's
business unit, and the individual.
. To make improved customer satisfaction, as measured by outside surveys, a
specific element of the performance program.
. To tie compensation to both annual and long-term strategic plans.
. To be able to attract and retain executives of the high caliber vital to
long-term Company success.
. To relate base pay to industry standards but to require superior
performance in order to receive payouts above those standards.
To reach these goals, the program sets base salaries for executives at
industry medians and provides executives with the opportunity to achieve above-
median levels with additional "at-risk" compensation, which is awarded on the
condition that goals designed to increase shareholder value are satisfied or
exceeded. In 1997, the "at risk" portion of annual cash compensation for the
executive staff (except for the CEO) was targeted at 25% to 35% of position rate
(industry standard pay), based on meeting or surpassing pre-determined Company-
wide goals for financial performance, customer satisfaction, and capital
spending. These goals account for 75% of the annual cash incentive; individual
performance, judged by the chief executive officer, affects 25%. The
expectation is that total cash compensation will exceed the competitive market
in good performance years and fall below market if performance is below average.
Long-term performance share grant incentives are also based on meeting or
exceeding financial performance. In 1997, long-term grants comprised 10% to 15%
of an executive's position rate. These stock grants, which include dividend
equivalents provided goals are met, are made for a three-year period. They are
earned by meeting requirements for annual growth in earnings per share and total
shareholder return in comparison with the Dow Jones Utility Index, as measured
over the three-year period of the award.
The plan also includes non-qualified stock option grants that range (at
face value) from 30% to 45% of position salary rates. These vest over three
years at the rate of 33-1/3% a year. The exercise price for options is the fair
market value (list price on the New York Stock Exchange) on the date of the
grant.
-13-
<PAGE>
In 1997, the Committee commissioned Towers Perrin, a national executive
compensation consulting firm, to study and review executive compensation and
determine whether the Company's plan was in line with current industry standards
and practices. The Towers Perrin study indicated that the executive annual at-
risk and long-term incentives were slightly below market in all categories.
Consistent with growing trends and practices in our industry, which is
experiencing rapid deregulation and competition, Towers Perrin recommended that
executive compensation become more aligned with standards and practices in
competitive, deregulated industries. Based on these recommendations and
findings, the Company did make some modest revisions to the target goals to be
effective in calendar year 1998, for 1999 award grants.
For the fourth consecutive year, overall performance exceeded the overall
goals set by the Board of Directors. Customer satisfaction (which serves as a
proxy for market share) is broken down into three broad categories: industrial,
commercial, and residential. Customer satisfaction is measured by Market
Strategies, Inc., an independent market research firm, on a scale of 1 to 10,
with 10 being the highest score possible. In 1997, commercial customer
satisfaction reached the highest measured levels ever. Industrial customer
satisfaction improved over 1996 and also exceeded the overall goal established
by the Committee. Residential customer satisfaction matched last year's record
high score. The capital spending performance goal established by the Board was
also met. Even after taking into consideration a $7 million rate decrease to
Nevada customers, overall financial performance for the Company was the best
ever. For the fourth consecutive year, customer satisfaction combined with
excellent financial results resulted in overall performance in excess of 100% of
the 1997 goal.
December 31, 1997, marked the end of the second three-year measurement
period (1995-1997) for the award of performance shares under the Company's long-
term incentive program. Overall earnings per share grew an average of 10.4% per
year over the three-year period, and total shareholder return over the same
period put Sierra in the top percentile in the Dow Jones Utility Average. Based
on the terms of the plan approved by shareholders in 1994 and the specific
three-year goals established by the Committee in 1995, management earned the
maximum amount of shares available for grant in 1995.
The officers and executives achieved these results in the midst of utility
industry restructuring. These changes have mandated significant Company
reorganization, and a major redirection and refocusing of management efforts to
prepare for and meet competition. Significant operational achievements of the
executive staff in 1997 include record electric system reliability, further
improvements in recordable employee accidents amounting to a 65% decrease since
1993, further reductions in average costs to serve new customers, reduced
electric generation and fuel costs, maintaining an electric plant availability
rating of 92.6%, and completion of the first full year of the Pinon Pine
commercial operation. Significant financial achievements include total
shareholder return of 35% (ranking in the top one-third for all publicly held
companies), maintenance of an A-bond rating, a 6-cent increase in dividends,
successfully earning back $9.65 million in revenue "margin" lost due to rate
reductions provided to customers in 1997, and significantly increased revenues
for electric transmission and the Tuscarora gas pipeline. Other achievements
include formation of a new alliance with Primary Energy, one of the nation's
premier co-generation companies, to market co-generation products, and
negotiating a new three-year labor contract with the IBEW, which closely aligns
union member employees with the interests of all company shareholders.
CHIEF EXECUTIVE OFFICER COMPENSATION
Walter M. Higgins, who resigned from the Company in January 1998 to accept
the position of President and CEO for AGL Resources, served as the Company's CEO
for all of 1997. Under the Company's compensation plan, CEO compensation is
based on the same guiding principles established for the executive group as a
whole.
At the end of 1996 and again in 1997, the Committee commissioned a study of
the Company's compensation plan, which disclosed that the CEO's compensation
fell below the national median for chief
-14-
<PAGE>
executives of similarly situated companies. Mr. Higgins' base salary was not
adjusted in 1997 but was increased to $355,000 at the end of 1997, to take
effect in January 1998.
In 1997, Mr. Higgins' target annual incentive was 45% of position rate, 80%
of which was based on achieving the same corporate goals established for the
executive group as a whole, and 20% of which was based on meeting individual
goals. As stated above, all of the corporate goals established by the Committee
were achieved. The Committee established 12 specific individual goals for Mr.
Higgins in 1997, all of which were either fully or substantially satisfied. It
is the policy of the Board of Directors with respect to annual incentive
compensation, and a requirement of the long-term incentive plan approved by
shareholders in 1994, that no incentive award or performance shares be granted
to a senior executive who resigns from the Company to take a position elsewhere.
Therefore, Mr. Higgins received no incentive award or performance shares for
1997. In the first quarter, the Board of Directors elected Malyn K. Malquist
Chairman, President and CEO of the Company.
MEMBERS OF THE COMPENSATION AND ORGANIZATION COMMITTEE
Theodore J. Day Richard N. Fulstone
Harold P. Dayton, Jr. Robert B. Whittington
James R. Donnelley, Chair
SEVERANCE ARRANGEMENTS
Severance allowance plans (adopted in 1986) exist for all employees of the
Company and its subsidiaries which provide for severance pay, payable in a lump
sum or by purchase of an annuity, if within three years after a change in
control of the Company, there is a termination of employment by the Company
related to such change in control, or a termination of employment by the
employee for good reason, in each case as described in the plans. In these
circumstances, employees, including the currently employed officers named in the
compensation table above, are entitled to a severance allowance not to exceed an
amount equal to 24 months of the employee's base salary and any bonus and the
continuation for up to 24 months of participation in the Company's group medical
and life insurance plans. Change in control is defined in the plan as, among
other things, a dissolution or liquidation, a reorganization, merger or
consolidation in which the Company is not the surviving corporation, the sale of
all or substantially all the assets of the Company (not the sale of a work unit)
or the acquisition by any person or entity of 20% or more of the voting power of
the Company. In addition, several change-in-control contracts have been entered
into between the Company and several of its executives, including those listed
on the Summary Compensation Table, which are described in the section titled
Certain Relationships and Related Transactions. Benefits under the change of
control contracts are in lieu of, and not in addition to, any benefits available
under the severance allowance plans.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
TRANSACTIONS WITH MANAGEMENT
The Company has entered into severance agreements with certain key
executives, including the individuals named in the Summary Compensation Table.
These agreements provide that, upon termination of the executive's employment
within 24 four months following a change in control of the Company (as defined
in the agreements) either (a) by the Company for reasons other than cause (as
defined in the agreements), death or disability, or (b) by the executive for
good reason (as defined in the agreement, including a diminution of
responsibilities, compensation, or benefits (unless, with respect to reduction
in salary or benefits, such reduction is applicable to all senior executives of
the Company and the acquiror), the executive will receive certain payments and
benefits. These severance payments and benefits include (i) a lump sum payment
equal to three times the sum of the executive's base salary and target bonus,
(ii) a lump sum payment equal to the present value of the benefits
-15-
<PAGE>
the executive would have received had he continued to participate in the
Company's retirement plans for an additional three years (or, in the case of the
Company's Supplemental Executive Retirement Plan only, the greater of three
years or the period from the date of termination until the executive's early
retirement date, as defined in such plan), and (iii) continuation of life,
disability, accident, and health insurance benefits for a period of 36 months
immediately following termination of employment. Except for Mr. Malquist, the
agreements also provide that if any compensation paid, or benefit provided, to
the executive, whether or not pursuant to the change-in-control agreements,
would be subject to the federal excise tax on "excess parachute payments,"
payments and benefits provided pursuant to the agreement will be cut back to the
largest amount that would not be subject to such excise tax, if such cutback
results in a higher after-tax payment to the executive. In the case of Mr.
Malquist, the agreement provides that the Company will pay an additional amount
sufficient to hold him harmless from such tax. The Board of Directors entered
into these agreements in order to attract and retain excellent management, and
to encourage and reinforce continued attention to the executives' assigned
duties without distraction under circumstances arising from the possibility of a
change in control of the Company. In entering into these agreements, the Board
was advised by Towers Perrin, the national compensation and benefits consulting
firm described above, and Skadden, Arps, Slate, Meagher & Flom, an independent
outside law firm, to insure that the agreements entered into were in line with
existing industry standards and provided benefits to management consistent with
those standards.
CERTAIN BUSINESS RELATIONSHIPS
The Company has entered into an agreement with a partner of Hale Day
Gallagher Co., a real estate brokerage and investment company, to act as broker
for the sale of a property owned by Lands of Sierra, Inc., a subsidiary of the
Company. The eventual sale of the property will result in Hale Day Gallagher
Co. receiving a standard brokerage commission not to exceed 5% of the selling
price. Mr. T.J. Day, a partner of Hale Day Gallagher Co. and a Director of the
Company, has no relationship with or interest in the transaction, will receive
no part of the commission, and will receive no direct or indirect benefit from
the transaction.
Mr. Peterson, formerly a partner with the law firm of Woodburn and Wedge,
became Senior Vice President and General Counsel for Sierra Pacific Resources in
1993. Woodburn and Wedge, which has performed legal services for SPPC since
1920 and for Sierra Pacific Resources and all its subsidiaries from their
inception, continues to perform legal work for the Company. Mr. Peterson's
spouse has been an equity partner in the firm since 1982.
Susan Oldham, a former employee of SPPC specializing in water resources
law, planning and policy, accepted the Company's voluntary severance offering in
December 1995. Ms. Oldham is the spouse of Steven C. Oldham, Vice President,
Transmission Business Group and Strategic Development for SPPC. Ms. Oldham, a
licensed attorney in Nevada and California, has continued to perform specialized
legal services in the water resource area for the Company on a contract basis.
INDEBTEDNESS OF MANAGEMENT
In April 1994, Mr. Malquist, formerly Senior Vice President and Chief
Financial Officer, received a $92,000 interest-free loan related to his
employment arrangement with the Company. The loan is payable in four equal
annual installments. Any installment due on any anniversary date on which Mr.
Malquist is employed by the Company will be discharged by the Company in
consideration for services rendered during the previous year.
-16-
<PAGE>
INDEPENDENT PUBLIC ACCOUNTANTS
On the recommendation of the Audit Committee, the Board of Directors of
Sierra Pacific Resources selected the independent accounting firm of Deloitte &
Touche, LLP, as the Company's auditors for the year ended 1998.
The Company's financial statements, and the financial statements of
significant subsidiary companies for the year ended December 31, 1997, were
audited by Deloitte & Touche. A representative of Deloitte & Touche will be
present at the Annual Meeting to answer questions from stockholders and will
have an opportunity to make a statement if desired.
Evolving best practice among leading corporations includes periodic
competitive review and selection of independent auditors. In 1996, the Company
competitively bid its auditing services. The Company solicited and reviewed
requests for proposal from a majority of the big six national accounting firms,
including Coopers & Lybrand, the Company's former auditors. At the conclusion
of the process, on November 18, 1996, the Company selected Deloitte & Touche,
LLP, as the Company's independent auditors for the years ending 1996 and 1997.
During the two fiscal years immediately prior to and through November 18,
1996, the Company did not consult with Deloitte & Touche on items which
concerned the application of accounting principles generally, or to a specified
transaction or group of transactions, either completed or proposed, or the type
of audit opinion that might be rendered on the Company's financial statements.
The Audit Committee has approved each professional service provided by
Deloitte & Touche during 1997. Additionally, the Audit Committee considered the
possible effect the performances of such services might have on the independence
of the Company's independent accountants and concluded that the services
performed have not impaired their independence. All professional services were
provided by Deloitte & Touche at customary rates and terms.
DISCRETIONARY AUTHORITY
The Company has no knowledge of any matters to be presented for action by
the stockholders at the meeting other than as set forth herein. However, the
enclosed proxy gives discretionary authority to the persons named therein to act
in accordance with their best judgment in the event that any additional matters
should be presented.
DEADLINE FOR STOCKHOLDERS PROPOSALS
Proposals of stockholders intended to be presented at the 1999 Annual
Meeting of Stockholders must be received on or before November 27, 1998, for
inclusion in the proxy materials relating to that meeting. Any such proposals
should be sent to William E. Peterson, Secretary, Sierra Pacific Resources, P.O.
Box 30150, Reno, NV 89520-3150.
ANNUAL REPORT
In order to exercise prudent judgment, Stockholders are invited to examine
the financial statements contained in the Company's Annual Report for 1997, a
copy of which has been mailed to all stockholders of record through the close of
business on March 13, 1998.
-17-
<PAGE>
- --------------------------------------------------------------------------------
SIERRA PACIFIC RESOURCES
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoints Harold P. Dayton, Jr. and Malyn K. Malquist or
either of them, each with full power of substitution, proxies to vote all
shares of Common Stock of Sierra Pacific Resources which the undersigned may be
entitled to vote at the Annual Meeting of the Stockholders to be held on May
18, 1998 and at any and all adjournments thereof:
1. TO ELECT THE MEMBERS OF THE BOARD OF DIRECTORS.
For all nominees listed below Withhold authority to vote
(except as written to the for all nominees [_]
contrary below) [_]
James R. Donnelley Malyn K. Malquist James L. Murphy
(INSTRUCTION: To withhold authority to vote for any individual nominee write
the nominee's name on the space provided below.)
-------------------------------------------------------------------------
2. WITH DISCRETIONARY AUTHORITY TO VOTE UPON SUCH OTHER BUSINESS AS MAY PROP-
ERLY COME BEFORE THE MEETING.
(CONTINUED AND TO BE SIGNED ON REVERSE SIDE)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
(CONTINUED FROM OTHER SIDE)
THE SHARES REPRESENTED BY THIS PROXY WILL BE VOTED AS DIRECTED BY THE STOCK-
HOLDER. IF NO DIRECTION IS GIVEN WHEN THE DULY EXECUTED PROXY IS RETURNED, SUCH
SHARES WILL BE VOTED "FOR" ALL NOMINEES IN ITEM 1.
Please sign below exactly as your name
appears on this card, including the
title "Executor", "Trustee", etc., if
the same is indicated. When stock is
held by a corporation, this proxy should
be executed by an authorized officer
thereof.
-----------------------------------------
Signature
Dated: _______________ , 1998
PLEASE MARK, SIGN, DATE AND -----------------------------------------
RETURN THE PROXY CARD USING Signature if held jointly
THE ENCLOSED ENVELOPE.
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