<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. )
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
- - --------------------------------------------------------------------------------
(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>
[LETTERHEAD OF SIERRA PACIFIC RESOURCES]
Malyn K. Malquist
Chairman of the Board, President
and Chief Executive Officer March 31, 1999
To Our Stockholders:
On behalf of the Board of Directors, I am pleased to invite you to attend the
1999 Annual Meeting of the Stockholders of Sierra Pacific Resources, which will
be held at 10:00 a.m., local time, on Monday, May 17, 1999, at the Reno-Sparks
Convention Center, 4590 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 1998 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/ Malyn K. Malquist
<PAGE>
SIERRA PACIFIC RESOURCES
6100 Neil Road
Reno, Nevada 89511
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD MAY 17, 1999
-----------------
NOTICE IS HEREBY GIVEN that the Annual Meeting of Stockholders of Sierra
Pacific Resources will be held at the Reno-Sparks Convention Center, 4590 South
Virginia, Reno, Nevada, on Monday, May 17, 1999, 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 2002, 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 15,
1999, 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, 1999
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 17, 1999. 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, 1999.
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 15, 1999 (the "record date") will be
entitled to vote at the meeting. There were 31,009,364 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 2002, or until their successors are elected and qualified,
or on the closing date of the merger between Sierra Pacific Resources, Sierra
Pacific Power Company and Nevada Power Company, whichever occurs first. 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>
Principal Occupation Director
Name of Director During Last 5 Years Since
and Nominee Age
- - -----------------------------------------------------------------------------------------------------------------------
NOMINEES FOR ELECTION FOR A TERM OF THREE YEARS EXPIRING IN 2002
<S> <C> <C> <C>
Krestine M. Corbin 61 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.
Theodore J. Day 49 Senior Partner, Hale Day Gallagher Co., a real estate 1987
brokerage and investment company.
Dennis E. Wheeler 56 Chairman of the Board, President and Chief Executive Officer 1990
of Coeur d'Alene Mines Corporation since 1986.
<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 66 Consultant, Scudder Kemper Investment Co.; Retired Partner, 1990
Loomis, Sayles & Co., Inc., an investment counsel firm in
Boston, Massachusetts. He is also a director of Seaboard Oil
Company of Midland, Texas.
Harold P. Dayton 76 Retired since 1985; formerly President of Dayton's Furniture, 1984
Inc. Mr. Dayton has been a director of SPPC since 1967.
Robert B. Whittington 71 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>
-2-
<PAGE>
<TABLE>
<CAPTION>
Principal Occupation Director Since
Name of Director Age During Last 5 Years
- - -----------------------------------------------------------------------------------------------------------------------
DIRECTORS WHOSE TERM EXPIRES IN 2001
<S> <C> <C> <C>
James R. Donnelley 63 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.
Richard N. Fulstone 71 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).
Malyn K. Malquist 46 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 Treasurer in
1990 and Vice President in 1993.
James L. Murphy 70 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 owner,
independent trustee and general manager of several real estate
development projects and numerous rental properties. He is
also a retired Colonel of the United States Air Force Reserve.
</TABLE>
All Directors of Sierra Pacific Resources are Directors of its wholly owned
subsidiary, Sierra Pacific Power Company. 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 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 Sierra Pacific Power Company.
-3-
<PAGE>
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 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 very substantial shareholder investment in the Company.
Non-employee Directors of the Company, its subsidiaries, and members of Board
committees are paid $1200 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.
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, Sierra Pacific Power Company, maintains a Pension Committee,
which oversees the pension and benefits program for all affiliates, and an
Environmental Committee. The Board also establishes 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 1998.
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
1998.
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 these goals. Ms. Corbin and Messrs. Donnelley,
Fulstone,
-4-
<PAGE>
Murphy, and Wheeler (Chair) presently serve on this Committee. The
Planning and Finance Committee met three times in 1998.
The Environmental Committee was formed in 1992 to assist the Board of
Directors in overseeing the Company's environmental policy and performance and
to provide guidance to executive management on environmental issues. Messrs.
Dayton, Fulstone, Remington (Chair), and Wheeler presently serve on this
Committee. The Committee met two times in 1998.
The Pension Committee was formed to oversee the Company's pension and 401K
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 two times in 1998.
There were four regularly scheduled and nine special meetings of the Board of
Directors held during 1998. The aggregate meeting attendance of all members of
the Board was 95% for Board and Committee meetings.
-5-
<PAGE>
SUMMARY COMPENSATION TABLE
The following table sets forth information about the compensation of each
Chief Executive Officer that served in that position during 1998, 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
Name and Compen- Stock Options/ LTIP All Other
Principal Salary Bonus sation Awards SARS Payouts Compensation
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 (1) 1998 63,234 0 0 0 0 0 703
Chairman, 1997 361,497 0 6,020 0 30,000 0 47,175
President and Chief 1996 334,231 219,869 0 0 9,594 181,193 35,054
Executive Officer
Malyn K. Malquist (1) 1998 292,960 180,900 16,486 0 61,000 85,184 15,805
Chairman, 1997 212,803 92,198 2,052 0 14,000 101,192 15,279
President and Chief 1996 194,077 95,335 0 0 3,504 51,770 9,380
Executive Officer
William E. Peterson 1998 199,385 71,503 18,918 0 9,000 85,184 29,939
Senior Vice 1997 207,757 78,184 17,412 0 10,000 101,192 29,488
President, General 1996 191,923 85,445 3,417 0 3,504 70,508 20,982
Counsel and
Corporate Secretary
Mark A. Ruelle 1998 192,116 72,843 12,342 0 9,000 50,108 8,974
Senior Vice 1997 143,308 65,269 3,808 0 8,384 0 77,329
President, Chief 1996 0 0 0 0 0 0 0
Financial Officer
and Treasurer
Mary Jane L. Willier 1998 159,923 51,975 10,950 0 5,500 26,868 6,122
Vice President, 1997 135,577 46,027 3.606 0 6,000 0 72,377
Human Resources 1996 0 0 0 0 0 0 0
Sierra Pacific
Power Company
Randy G. Harris 1998 155,769 56,454 10,788 0 5,500 29,063 5,893
Vice President, 1997 135,328 45,916 2,657 0 6,000 0 4,672
Energy Marketing 1996 100,731 22,424 5,647 0 0 0 4,112
Services Business
Group Sierra Pacific
Power Company
- - -----------------------------------------------------------------------------------------------------------------------------
</TABLE>
Notes:
(1) Mr. Higgins resigned from his position of Chairman, President and Chief
Executive Officer on January 14, 1998. Mr. Malquist was named President
and Chief Executive Officer on January 14, 1998.
(2) Amounts represent incentive pay received pursuant to SPR's "pay for
performance" team incentive plan implemented by management in conjunction
with the Long-Term Incentive Plan approved by shareholders 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.
-6-
<PAGE>
(4) Long-term incentive payout relates to performance share payout for the
three-year period January 1, 1996, to December 31, 1998.
(5) Amounts for All Other Compensation include the following for 1998:
. Company contributions under the 401(k) deferred compensation plan for all
administrative employees, and the executive officers and directors,
pursuant to which the Company matches 50% of each executive officer's
deferral up to 6% of salary. In 1998, the Company matching amount was
$4,800 each for Messrs. Malquist, Peterson, Ruelle, and Harris, and Ms.
Willier.
. Company contributions to its nonqualified deferred compensation plan for
Messrs. Malquist and Peterson were $9,312 and $23,157. The additional
income on earnings contributed by Messrs. Higgins, Malquist, and Peterson
which was in excess of 120% of the federal rate were $481, $121, and
$301.
. Imputed income on group term life insurance premiums paid by the Company
for Messrs. Higgins, Malquist, Peterson, Ruelle and Harris and Ms.
Willier was $222, $707, $855, $186, $365 and $628.
. Insurance premiums paid for executive term life policies for Messrs.
Malquist, Peterson, Ruelle, and Harris and Ms. Willier were $865, $826,
$271, $728 and $694.
. Mr. Ruelle received a payment of $3,717 from the Company for moving
expenses.
-7-
<PAGE>
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 March 10, Outstanding as of
Name of Director or Nominee 1999 March 10, 1999
- - -------------------------------------- ------------------------- ------------------------------------
<S> <C> <C>
Edward P. Bliss 14,419
Krestine M. Corbin 10,172
Theodore J. Day 20,613
Harold P. Dayton, Jr. 12,583
James R. Donnelley 18,840 No director or nominee
Richard N. Fulstone 14,845 for director owns in excess
Walter M. Higgins (1) 100 of one percent.
Malyn K. Malquist 43,243
James L. Murphy 10,318
Dennis E. Wheeler 9,250
Robert B. Whittington 13,214
-------------------------
167,597
=========================
</TABLE>
-8-
<PAGE>
<TABLE>
<CAPTION>
Shares
Beneficially Percent of Total Shares
Owned as of Outstanding as of
Executive Officers March 10, 1999 March 10, 1999
- - --------------------------------------- ------------------------- ------------------------------------
<S> <C> <C>
Walter M. Higgins 100
Malyn K. Malquist 43,243
William E. Peterson 22,451 No executive officer owns
Mark A. Ruelle 10,022 in excess of one percent.
Mary Jane L. Willier 6,318
Randy G. Harris 8,803
90,937
=========================
All directors and executive officers
as a group (a)(b)(c) 245,954
=========================
- - ---------------------------------------
</TABLE>
(1) Mr. Higgins resigned from his position of Chairman, President and Chief
Executive Officer on January 14, 1998.
(a) Includes shares acquired through participation in the Employee Stock
Purchase Plan and/or 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 under the Executive Long-Term Incentive Plan. Shares beneficially
owned pursuant to stock options granted to Messrs. Higgins, Malquist,
Peterson, Ruelle, and Harris, and Ms. Willier, and all directors and
executive officers as a group are -0-, 37,915, 18,913, 8,589, 5,833, 5,833,
and 98,241 shares, respectively. Shares beneficially owned as a result of
performance shares earned by Messrs. Higgins, Malquist, Peterson, Ruelle,
and Harris, and Ms. Willier, and all officers as a group are 1,156, 592,
494, 259, 400, and 1,965, respectively.
(c) Included in the shares beneficially owned by the Directors are 71,737
shares of "phantom stock" representing the actuarial value of the
Directors' vested benefits in the terminated Retirement Plan for Outside
Directors. The "phantom stock" is held in an account to be paid at the time
of the Director's departure from the Board in either cash or stock.
-9-
<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 in 1998. 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 0 0.0 35.90 1/1/08 0
Malyn K. Malquist 61,000 48.6 35.90 1/1/08 275,110
William E. Peterson 9,000 7.2 35.90 1/1/08 40,590
Mark A. Ruelle 9,000 7.2 35.90 1/1/08 40,590
Mary Jane L. Willier 5,500 4.4 35.90 1/1/08 24,805
Randy G. Harris 5,500 4.4 35.90 1/1/08 24,805
- - -----------------------------------------------------------------------------------------------------------
</TABLE>
(1) Under the Executive Long-Term Incentive Plan, the grants of nonqualifying
stock options were made on January 1, 1998. One third 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 (13.2%), risk free rate of return (5.81%),
projected dividend yield (4.7%), the stock option term (10 years), and an
adjustment for risk of forfeiture during the vesting period (three years at
3%).
-10-
<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, 1998.
<TABLE>
<CAPTION>
- - ----------------------------------------------------------------------------------------------------------------------
Number of Securities Dollar
Underlying Value of Unexercised
Unexercised in-the-Money
Options/SARS at Options/SARS at
Fiscal Year-End Fiscal Year-End
Shares Acquired Exercisable/ Exercisable/
Name on Exercise Value Realized Unexercisable Unexercisable
(a) (b) (c) (d) (e)(1)
- - ----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Walter M. Higgins 16,402 161,942 0 / 0 0/ 0
Malyn K. Malquist 0 0 12,915 / 72,581 187,390/ 251,220
William E. Peterson 0 0 12,579 / 17,914 192,504/ 117,354
Mark A. Ruelle 0 0 2,795 / 14,589 25,851/ 70,601
Mary Jane L. Willier 0 0 2,000 / 9,500 18,500/ 48,550
Randy G. Harris 0 0 2,000 / 9,500 18,500/ 48,550
- - ----------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) Pre-tax gain. Value of in-the-money options based on December 31, 1998
closing trading price of $38.00 less the option exercise price.
-11-
<PAGE>
LONG-TERM INCENTIVE PLANS - AWARDS
IN LAST FISCAL YEAR
The Executive Long-Term Incentive Plan (LTIP) provides for the granting of
stock options (both nonqualified and qualified), stock appreciation rights
(SARs), restricted stock performance units, performance shares and bonus stock
to participating employees as an incentive for outstanding performance.
Incentive compensation is based on the achievement of pre-established financial
goals for the Company. Goals were established for customer satisfaction, 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 in 1998.
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>
<S> <C> <C> <C> <C> <C>
- - -----------------------------------------------------------------------------------------------------------
Estimated Future Payouts Under Non-Stock
Price-Based Plans
-------------------------------------------------
Performance
Number of or Other
Shares, Units Period Until
or Other Maturation or Threshold Target Maximum
Name Rights Payout $ $ $
(a) (b) (c) (d) (1) (e) (2) (f) (3)
- - -----------------------------------------------------------------------------------------------------------
Walter M. Higgins 0 3 years 0 0 0
Malyn K. Malquist 4,500 3 years 80,775 161,550 282,713
William E. Peterson 1,300 3 years 23,335 46,670 81,673
Mark A. Ruelle 1,300 3 years 23,335 46,670 81,673
Mary Jane L. Willier 800 3 years 14,360 28,720 50,260
Randy G. Harris 800 3 years 14,360 28,720 50,260
- - -----------------------------------------------------------------------------------------------------------
</TABLE>
(1) 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.
(2) 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.
(3) 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 the grant.
-12-
<PAGE>
PENSION PLANS
The following table shows annual benefits payable on retirement at normal
retirement age 65 to elected officers under the Company's defined benefit plans
based on various levels of remuneration and years of service which may exist at
the time of retirement.
<TABLE>
<CAPTION>
Highest Average Annual Benefits for Years of Service Indicated
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>
The Company's noncontributory 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
the Company 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. Malquist,
Peterson, Ruelle, and Harris and Ms. Willier are 4.6, 10.8, .8, 23.6, and .9,
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 Company's retirement plan
are limited by law to certain maximum amounts.
In addition, the Company has entered into an agreement with Mr. Peterson
crediting him with four years of service for prior years service with his
previous employer, most of which was dedicated to performing legal services for
SPR and SPPC, and an additional one-half year credit for each year of service
with the Company for the first ten years of his employment.
-13-
<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,
1993, and ending December 31, 1998.
COMPARISON OF FIVE-YEAR CUMULATIVE TOTAL RETURN*
AMONG SIERRA PACIFIC RESOURCES, THE S & P 500 INDEX
AND THE DOW JONES UTILITIES INDEX
[GRAPH APPEARS HERE]
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
- - ---------------------------------------------------------------------------------------------------------------------------
12/31/93 12/31/94 12/31/95 12/31/96 12/31/98 12/31/98
- - ---------------------------------------------------------------------------------------------------------------------------
SIERRA PACIFIC RESOURCES $ 100 $ 97 $ 127 $ 164 $ 223 $ 234
- - ---------------------------------------------------------------------------------------------------------------------------
STANDARD & POORS 500 $ 100 $ 101 $ 139 $ 171 $ 229 $ 294
- - ---------------------------------------------------------------------------------------------------------------------------
DOW JONES UTILITIES $ 100 $ 85 $ 112 $ 122 $ 150 $ 178
- - ---------------------------------------------------------------------------------------------------------------------------
*$100 invested on 12/31/93 in stock or index, including reinvestment of dividends. Fiscal year ending December 31.
- - ---------------------------------------------------------------------------------------------------------------------------
</TABLE>
-14-
<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 executive pay to the Company's overall
performance as well as to their own achievements as individuals. 1998 marked
the fifth 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 1998, the "at risk" portion of annual cash compensation for the
executive staff (except for the CEO) was targeted at 25% to 35% of base pay
(industry standard pay), based on meeting or surpassing pre-determined Company-
wide goals for financial performance and customer satisfaction, and separate
goals applicable to the individual lines of business. The Company and lines of
business goals account for 75% of the annual cash incentive. Individual
performance, judged by the chief executive officer, affects the remaining 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 and customer satisfaction goals. In 1998, 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 customer
satisfaction as measured by outside surveys, 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 grant.
The plan also includes non-qualified stock option grants that range (at
face value) from 30% to 50% (for the CEO) 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.
In 1998, as it has done the previous two years, 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. In 1997 Towers Perrin had
recommended that as the industry deregulates, the Company gradually adjust its
compensation practices and strategies to conform to general industry. The
Towers Perrin study indicated that the Company has successfully transitioned its
compensation strategy over the last year to include
-15-
<PAGE>
general industry pay practices as well as utility industry practices.
Specifically, the Company's executive pay strategy calls for base salaries
targeted to median utility industry levels for most executives. Utility industry
standards are generally lower than general industry market rates. Certain
positions, such as Vice President of Energy Marketing, Human Resources, and
General Counsel are targeted to median general industry levels to capture the
broader total market talent necessary to staff these positions. Annual
incentives are based on general industry levels consistent with the strategy to
transition to a more performance-oriented approach to incentive compensation.
Long-term incentives are likewise targeted to general industry levels to provide
a strong incentive to increase shareholder value.
The 1998 Towers Perrin study concluded that the Company's base salaries
were fully aligned with competitive levels at the 50th percentile. Similarly,
Towers Perrin found that the Company's total cash compensation levels, including
incentive pay were aligned within the median, or 50th percentile, of competitive
levels for our industry. With respect to long-term incentives, Towers Perrin
found that the Company's grants were somewhat below general industry medians.
Because of the pending merger with Nevada Power Company, and the expectation
that the compensation systems of the two companies will need to be consistent
and fully integrated, the Company made no changes in the amounts of the Long-
Term Incentive Plan grants for 1999.
In 1998, overall performance exceeded the 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 1998, customer satisfaction was maintained or
improved in all three categories. Overall financial performance for the Company
was the best ever. Customer satisfaction combined with excellent financial
results resulted in overall performance slightly in excess of 100% of the
Committee's 1998 goal.
December 31, 1998, marked the end of the third three-year measurement
period (1996-1998) for the award of performance shares under the Company's long-
term incentive program. Overall earnings per share grew an average of 8.6% per
year over the three-year period, and total shareholder return over the same
period put Sierra in the 72.8 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 1996, management earned the
maximum amount of shares available for grant in 1996.
The officers and executives achieved these results while planning and
preparing for the new merged company and while engaged in utility industry
restructuring in two states and at the federal level. Significant operating
achievements in 1998 include record transmission system reliability and
availability, record transmission system revenues, further reductions in
production costs, record off-system electric and gas sales, record low number of
OSHA reportable accidents, continued improvements in staffing levels, and
completion of the Alturas Project, which was fully energized and operational in
December 1998. Significant financial achievement included record earnings per
share, record net income, achieving total shareholder return of 5.1% for the
year, continued maintenance of an A- bond rating, a 4.8% increase in dividends,
and significant increases in revenues on a Company-wide basis. Other
achievements included entering into the merger agreement with Nevada Power
Company, and making significant progress in planning for the integration of the
two companies which is expected to occur in the second or third quarter of 1999.
CHIEF EXECUTIVE OFFICER COMPENSATION
Under the Company's compensation plan, CEO compensation is based on the
same guiding principles established for the executive group as a whole.
-16-
<PAGE>
The 1997 Towers Perrin study of the Company's compensation plan disclosed
that the CEO's compensation was below the national median for chief executive
officers of similarly situated companies. At that time Walter M. Higgins was
CEO of the Company and his base salary was increased to the market median of
$355,000 at the end of 1997, and took effect on January 1, 1998. Mr. Higgins
resigned in January 1998 to accept the position of President and CEO of AGL
Resources.
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 in 1998
for 1997 or 1998 performance.
In the first quarter, the Board of Directors elected Malyn K. Malquist
Chairman, President and CEO of the Company. Mr. Malquist previously served as
Senior Vice President, Distribution Services Group and Principal Operations
Officer. Before that he served as Senior Vice President and Chief Financial
Officer of the Company. In recognition of the fact that Mr. Malquist had no
previous experience as CEO, the Board fixed his 1998 salary at 80% of the market
median, or $280,000, and increased his target level annual and long-term
incentive opportunities to the level previously established by the Committee for
the CEO position.
Mr. Malquist's performance over the course of the year was superior. He
exceeded the earnings per share goal established for the Company, beat the
capital expenditures budget and improved the Company's customer satisfaction
results from the previous year's record high. Much of the effort, initiative
and direction which resulted in the operational achievements discussed above in
connection with executive performance were originally set in motion by Mr.
Malquist during his tenure as principal operations officer which he carried
forward as CEO, including reductions in production and hook-up costs, continued
superior performance with respect to electric system and power plant reliability
and availability. Finally, Mr. Malquist wasted no time in initiating the most
significant strategic development in the Company's recent history, namely the
proposed merger with Nevada Power. Under his leadership, the Company reached
agreement with Nevada Power to merge the two companies on equal terms in April
1998 and obtained PUCN approval of the merger before the end of the year.
Consistent with the Company's annual and long-term plans applicable to the
executive group as a whole, the Board awarded Mr. Malquist all the performance
shares earned under the terms of the plan adopted by shareholders in 1994 for
the three-year cycle ended 1998. The Board also awarded Mr. Malquist an annual
incentive award on the same basis and at the same percentage as was awarded to
all the other executive officers as a group.
Members of the Compensation and Organization Committee
Theodore J. Day Richard N. Fulstone
Harold P. Dayton, Jr. Robert B. Whittington
James R. Donnelley, Chair
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 twenty-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
-17-
<PAGE>
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 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 thirty-six (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 Sierra Pacific
Power Company 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 is an equity partner in the firm.
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 Sierra Pacific Power
Company. 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, 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
-18-
<PAGE>
employed by the Company will be discharged by the Company in consideration for
services rendered during the previous year.
INDEPENDENT PUBLIC ACCOUNTANTS
No selection or recommendation has been made for the independent public
accountants for the 1999 audit. This selection will be made by the newly formed
Audit Committee of the merged company.
The Company's financial statements, and the financial statements of
subsidiary companies for the year ended December 31, 1998, were audited by
Deloitte & Touche. A representative of Deloitte and Touche will be present at
the Annual Meeting to answer questions from stockholders and will have an
opportunity to make a statement if desired.
The Audit Committee has approved each professional service provided by
Deloitte & Touche during 1998. 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 2000 Annual
Meeting of Stockholders must be received on or before December 3, 1999, 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 1998, a
copy of which has been mailed to all stockholders of record through the close of
business on March 15, 1999.
-19-
<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
17, 1999 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 contrary below) [_] for all nominees [_]
Krestine M. Corbin Theodore J. Day Dennis E. Wheeler
(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
PROPERLY 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
STOCKHOLDER. 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: _______________ , 1999 -----------------------------------------
Please mark, sign, date and Signature if held jointly
return the proxy card using
the enclosed envelope.
