$13.5 million severance package set aside for utility executives

Some executives would qualify for severance packages worth more than $1 million if their jobs are eliminated due to the merger.

To ensure stability in the top ranks, top executives who voluntarily leave will not collect the full severance package, said Sierra Pacific spokeswoman Faye Anderson.

"This is to ensure that executives don't leave," she told the Reno Gazette-Journal. "It gives them incentive to stay during the transition. Because if they don't stay, they don't get the money ... It's a common business practice."

Eleven Sierra Pacific executives and eight Nevada Power executives would qualify for a lump sum payment if they're fired without cause as a result of the merger. They also can collect if they leave the company for "good reason."

Under the agreement, Sierra Pacific executives would get a payment equal to three times their base salary in addition to their existing retirement, health, bonus and other employee award plans.

Malyn Malquist, Sierra Pacific chief executive officer, receives an annual salary of $240,000 plus a bonus equal to $120,000 if he meets financial and customer goals.

If he were to receive a full bonus, he would be eligible for a lump sum payment of more than $1 million.

Nevada Power executives would receive payments equal to twice their base salary and performance targets.

Charles A. Lenzie, Nevada Power chairman and CEO, and Michael R. Niggli, Nevada Power president, are the only Nevada Power executives eligible for payments equal to three times their base salary and bonus.

Lenzie, who plans to retire when the merger is complete, collected a salary and bonus of more than $500,000 in 1997. Under the agreement, he could be eligible for a lump sum payment of more than $1.5 million.

Shareholders of Sierra Pacific and Nevada Power approved the proposed $2.3 billion merger of the state's two dominant power companies on Friday.

The merger still has to be approved by state and federal regulators.

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