Exhibit 10. 2
May 22, 2002 -- AMENDED AGREEMENT
Xx. Xxxx X. Xxxxx
0000 Xxxxxx Xxxx
Xxxxxxx XX 00000
Dear Xxxx,
On behalf of the Board of Directors, I am pleased to offer you employment as
Senior Vice President Energy Supply for Sierra Pacific Resources for a period of
one (1) year. At the end of one (1) year, by mutual agreement, either this
contract may be extended for an additional period or you may become a regular
full time employee of the company. Your primary work location will be Las Vegas,
Nevada. The job does require business travel especially between Las Vegas and
Reno. We expect that you will assume your duties as soon as possible.
Your starting base salary in this position will be $275,000. You will also be
eligible for an annual cash incentive (STIP) of 45% of your base salary. Payment
of the Short Term Incentive is at the discretion of the Board of Directors and
is based on corporate, business unit and personal performance. Actual payout may
vary from 0% to 150% of target. Your participation for 2002 will be prorated
from your start date.
Long-term incentives for this position are in accordance with the plan approved
by the shareholders and administered by the Board of Directors. At this time,
long-term incentives consist of Non-Qualified Stock Options (NQSO's) and
performance shares. For your position the long-term incentive is targeted at 75%
of your base salary, 60% delivered through NQSO's and 40% delivered through
Performance Shares. The NQSO's vest one-third per year and are fully vested
after the third year. Performance shares have a three-year term and are earned
based on measures established by the Board for each grant. You will also be
eligible to participate on a pro-rata basis (31 of 36 months) in the 2002-2004
Performance Share grant made earlier this year. In addition you will also be
able to participate in the 2001-2003 Performance Share grant for the remaining
19 of the original 36 months.
As a special inducement for you to join SPR, the Board has also authorized the
following incentives. A one-time signing bonus of $35,000, gross amount before
taxes. In addition, you will receive a special stock option grant of 25,000
NQSO's at a strike price to be set based on the closing stock price on the day
you accept this offer by signing it and informing me that you have done so.
These options will vest at the end of one year, or upon change of control if
such an event were to occur before the end of one year, or if you are released
from employment for other than the reasons described below. Should you become a
regular employee as a Senior Vice President, you will be expected to achieve and
maintain one and a half times your annual compensation in SPR stock. You will
have five years to achieve this level.
You will be eligible to participate in the Company's Supplemental Executive
Retirement Plan (SERP) and eligible for benefits under this Plan including a
maximum benefit of 50% of your Final Average Earnings.
The Company will also provide you life insurance coverage of $400,000 contingent
upon completion of a physical exam performed by a doctor selected by our
insurance carrier. This will be in addition to a $1,000,000 policy in the event
that you die while traveling on Company business and company provided group life
insurance equivalent to 1.5 of your annual salary.
You will be eligible for all regular employee benefits including a 401K plan
that matches employee contributions dollar for dollar up to 6% and SPR's
Deferred Compensation Plan. You will receive a perquisite allowance of $9,100 to
cover such expenses as a car, tax preparation and club memberships. You will
receive paid time off (PTO) based on your total years of professional work
experience (27). Your annual paid time off allowance will be 43 days, which
include 11 paid holidays. In 2002, it will be pro rated based on your hire date.
In addition to the benefits described above, in the event you are terminated for
reasons other than (1) reasons relating to moral turpitude, (2) conviction of
any crime amounting to a felony, or (3) on your own volition and without
actually being requested to resign by the Board, you will receive within thirty
days of termination, one year of base salary. This payment shall be conditioned
on the execution of appropriate releases in favor of the Company for any and all
claims connected with or arising out of your employment or termination and will
require continued maintenance of confidential and proprietary information, a
non-compete for one year and agreement not to disparage the Company.
This offer includes reimbursement for reasonable relocation expenses including
travel to/from your current home, packing and transportation of your household
goods, expenses related to acquisition of a new home in Las Vegas and commission
on the sale of your current home. You will be allowed to delay your relocation
for up to one year from the date of conversion to regular employee.
The Company will pay for your reasonable travel expenses to make visits home
during this period. The Company will provide temporary apartment housing in Las
Vegas until your permanent relocation takes place.
As is Sierra's policy, all hiring offers are contingent on a drug analysis test.
We can arrange for you to have this test at a time and place convenient for you.
Also you will need to provide us proof of U.S. Citizenship on your first day of
work. This could include a copy of your Birth Certificate, Driver's License or
Social Security Card.
The position being offered to you is one of trust and confidence. In accepting
the position you are agreeing that, in addition to any other limitation and
regardless of the circumstances or any future limitation of your employment, you
will not communicate to any person, firm or other entity any knowledge relating
to documents, transactions or any other confidential knowledge which you might
acquire with respect to the business of Sierra Pacific Resources or any of its
affiliated companies.
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To indicate acceptance of this offer, please sign below and return one signed
original of this letter to me as soon as possible. If you have questions about
elements of this offer, you may call me or discuss them with Xxxxxx X. Xxxx,
Senior Vice President and CAO.
On behalf of the board and the senior officers of the company, I am delighted
that you have accepted the opportunity to join Sierra. We believe, with your
leadership, expertise and dedication we will accomplish great results for our
shareholders, customers, employees and communities. Welcome!
Sincerely,
Xxxxxx X. Xxxxxxx
Accepted:
______________________________
Xxxx X. Xxxxx
Date _________________________
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