Nevada Power shareholders OK merger

The merger approved by Nevada Power Co. shareholders gives two executives a compensation package of three times their annual salary if their jobs are eliminated.

The $2.3 billion merger with Sierra Pacific Resources Inc. of Reno still needs state and federal approval.

The combined firm would serve more than 800,000 electric, 100,000 gas and 65,000 water customers in Nevada and the Lake Tahoe area of California. It would have annual revenues of more than $1.5 billion.

A Securities and Exchange Commission filing says Charles Lenzie, Nevada Power's chairman and chief executive officer, and Michael Niggli, the company's president, are eligible for payments equal to three times their base salary and bonus should they leave the company. Lenzie has already announced he is retiring.

Such "golden parachute" severance agreements are common in mergers.

A March SEC filing listed Lenzie's salary and bonus at more than $500,000 in 1997. The company said Niggli, who joined the company this year, has an annual base salary of $400,000 per year and is eligible for bonuses.

Malyn Malquist, Sierra Pacific's chief executive officer, would be eligible for a similar package. He receives annual pay of $240,000 plus a bonus equal to $120,000 if he meets financial and customer goals.

Malquist would be CEO of the merged company, to be known as Sierra Pacific Resources, and Niggli would be president of the company.

Eleven Sierra Pacific executives and eight Nevada Power executives would qualify for a lump sum payment valued at up to twice their annual salaries if they're fired without cause as a result of the merger. The total severance arrangement is worth an estimated $13.5 million.

About 95 percent of the shares casting votes Friday favored the merger, with 35.9 million voting yes, 1.4 voting no and 477,000 abstaining. About 13.4 million shares did not return a proxy vote.

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