NEVADA POWER COMPANY
1993 LONG-TERM INCENTIVE PLAN
ARTICLE I
PURPOSES
The purposes of this Plan are to motivate and reward corporate officers and
certain other key managerial employees of Nevada Power Company (the "Company")
to achieve the Company's long term objective of providing the Company
shareholders with an above average return on the shareholders' investment and to
retain in its employ and reward those persons who by their position, ability and
diligence are able to make important contributions to the Company's success.
ARTICLE II
DEFINITIONS
The terms used in this Plan shall have the following meanings:
(a) "Award" means the right to receive Incentive Compensation Units
following the adjustment, if any, by the Committee to previously granted Units
at the end of the Performance Period.
(b) "Board of Directors" means the Board of Directors of the Company.
(c) "Committee" means the Compensation Committee of the Board of
Directors of the Company.
(d) "Company" means Nevada Power Company.
(e) "Employee" means any person who is employed on a permanent basis
by and receives a regular salary from the Company.
(f) "Fair Market Value" means the average closing market price of the
common shares of the Company on the New York Stock Exchange for the 15 trading
days immediately preceding the date in question.
(g) "Grant" means a conditional right to receive Incentive
Compensation Units, subject to adjustment or rescission by the Committee
pursuant to the terms of the Plan.
(h) "Incentive Compensation Units" means the units granted or awarded
to Participants pursuant to the provisions of the Plan. Each Incentive
Compensation Unit awarded under the Plan represents the right to receive one
common share of the Company.
(i) "Participant" means any Employee who is granted Incentive
Compensation benefits hereunder.
(j) "Performance Period" means the time period beginning on the date
of the grant of Incentive Compensation Units (as defined below) pursuant to this
Plan, and ending on the third anniversary of the date of the grant.
(k) "Total Common Shareholder Return" means the dividends paid with
respect to the common shares of a company and the increase in the Fair Market
Value of the common shares of a company.
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ARTICLE III
ADMINISTRATION
(a) The complete and sole administration of the Plan is the responsibility
of the Compensation Committee (sometimes hereinafter called the "Committee"),
appointed by the Board of Directors. No member of the Committee shall be
eligible for any grant under the Plan for any period during which he served as a
member of the Committee. No member of the Committee shall be liable for any act
done or determination made in good faith.
(b) The construction and interpretation by the Committee of any provision
of this Plan shall be final and conclusive. The Committee shall determine, from
time to time, subject to the provisions of this Plan, the Employees who shall
participate in the Plan (sometimes hereinafter called "Participants"), and the
number of Incentive Compensation Units (sometimes hereinafter called "Units") to
be granted and awarded to each Participant under this Plan.
(c) The Committee's determinations under the Plan, including without
limitation, determinations as to the persons to receive grants or awards of
Units, the terms and provisions of such grants or awards and the agreements
evidencing the same, need not be uniform and may be made by it selectively among
persons who receive or are eligible to receive grants or awards under the Plan,
whether or not such persons are similarly situated.
ARTICLE IV
MAXIMUM NUMBER OF UNITS
The maximum number of Units outstanding according to the Incentive
Compensation Ledger to the credit of the Participants at any one time shall not
exceed 200,000 Units. Each Unit awarded under the Plan will represent the right
to receive one common share of the Company.
ARTICLE V
INCENTIVE COMPENSATION UNITS
(a) Incentive Compensation Units may be granted to persons who at the time
of the grant are full time Employees of the Company. While all such Employees
are eligible to be considered for the receipt of Incentive Compensation Units,
it is contemplated that only those Employees who perform services of special
importance to the Company in the management, operation, and development of the
business will be selected to receive Incentive Compensation Units. Subject to
the terms, provisions, and conditions of this Plan, the Committee is hereby
authorized to (a) select the Employees to be granted Incentive Compensation
Units (it being understood that more than one grant may be made to the same
person), (b) determine the number of Incentive Compensation Units covered by
each grant, and (c) prescribe the form, which shall be consistent with this
Plan, of the instruments evidencing any Incentive Compensation Units granted
under this Plan.
(b) The amount of the individual grant of Incentive Compensation Units to
the Employees will be determined by the Committee by giving consideration to the
functions and responsibilities of the Employee, the Employee's contribution to
the achievement of the Company's objectives, and such other factors as the
Committee deems relevant.
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ARTICLE VI
ADJUSTMENTS TO ACCOUNTS OF PARTICIPANTS
(a) At the end of each Performance Period, the Committee may adjust the
number of Incentive Compensation Units previously granted to the Participants
based upon the Total Common Shareholder Return of the Company as compared with
the Total Common Shareholder Return of companies included in the Merrill Lynch
Electric Utility Index during the Performance Period, or such other measures of
performance as the Committee deems appropriate.
(b) Except as otherwise provided herein, in making adjustments to the
number of Units granted to Participants pursuant to this Paragraph, the
Committee shall have the discretion to rescind the Incentive Compensation Units
previously granted to the Participants.
(c) Except as otherwise provided herein, in the event of any share
dividend on the common shares of the Company, any split-up or combination of the
common shares, any distribution other than in cash, the issuance of rights to
subscribe to additional common shares of the Company, or any material change in
the capitalization or business structure of the Company, appropriate adjustment
shall be made by the Committee subject to approval of the Board of Directors, in
the aggregate number of Units which may be granted and awarded under this Plan
and in the number of Units granted to each Participant under this Plan. In the
event of the reclassification of common shares of the Company into shares of any
other class, the Committee, subject to approval of the Board of Directors, is
authorized to make such adjustment in the terms of the Plan as the Committee may
deem equitable.
(d) Notwithstanding the foregoing, previously granted Units which have
been awarded to a Participant pursuant to the provisions of the Plan will not be
subject to adjustment or rescission.
ARTICLE VII
TERMINATION OF EMPLOYMENT
(a) A Participant whose employment with the Company is terminated by
voluntary resignation (other than retirement) or by termination for cause during
a Performance Period will not be entitled to an award of any of the Incentive
Compensation Units granted to him (nor to any upward adjustments to such grant),
except as provided in Paragraph (b) of Article VIII, unless the Committee in its
absolute discretion determines the circumstances exceptional and not contrary to
the interest of the Company.
(b) A Participant whose employment with the Company is terminated without
cause due to retirement or death during a Performance Period will be entitled to
a prorated portion of a grant based upon the proportion of full time employment
during the Performance Period, counting the year of retirement as a full year,
after adjustment to the Units granted pursuant to Article VI.
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ARTICLE VIII
PAYMENT OF AWARDS
(a) At the end of a Performance Period, or upon the termination of any
Participant's employment with the Company, and after the adjustment provided for
by Article VI, there shall be awarded to the Participant, or in the event of the
Participant's death to his Beneficiary or Beneficiaries designated under
Paragraph (d) of this Article VIII, the Incentive Compensation Units previously
granted to the Participant.
(b) Notwithstanding anything herein to the contrary, in the event of a
change in control of the Company, Units previously granted to Participants under
the Plan shall automatically be awarded to Participants without the necessity of
further action by the Committee or Company and shall be paid to Participants
pursuant to this Article VIII. The occurrence of any of the following events
shall constitute a change in control of the Company: (1) the dissolution or
liquidation of the Company; (2) the reorganization, merger, or consolidation
with one or more corporations in which the Company is not the surviving
corporation; (3) the sale, exchange, or transfer of Company stock resulting in
any person or the person's affiliates owning more than 20 percent of the
outstanding shares; (4) the election to the Company's Board of Directors of new
members who were not originally nominated to the Board at the previous two
annual meetings if, as a result of this election, new members constitute a
majority of the Board, and (5) the sale of all or substantially all of the
Company's assets.
(c) Awards shall be made by payment to the Participant of one common share
of the Company for each Incentive Compensation Unit awarded to the Participant.
(d) Each person within 30 days of becoming a Participant under this Plan
shall file with the Secretary of the Company a notice in writing designating one
or more Beneficiaries to whom payments otherwise due the Participant shall be
made in the event of his death while in the employ of the Company or after
severance therefrom. The benefits of a deceased Participant who has not
completed a beneficiary designation shall be paid to the Participant's spouse,
or if none, to the Participant's estate.
(e) Notwithstanding the foregoing, and except as provided in Paragraph (b)
of this Article VIII, previously granted Incentive Compensation Units will not
be awarded at the end of a Performance Period if dividends on the common shares
of the Company have been reduced during the Performance Period, and any Units
granted at the beginning of the Performance Period will be held until such time
as the Committee determines that the grant shall be either awarded or rescinded.
ARTICLE IX
NONALIENATION OF BENEFITS
No right or benefit or payment under this Plan shall be subject to
transfer, anticipation, sale, assignment, pledge, encumbrance, or charge, and
any attempt to anticipate, sell, assign, pledge, encumber, or charge the same
shall be void. No right or benefit or payment hereunder shall in any manner be
liable for or subject to the debts, contracts, liabilities, or torts of the
person entitled to such benefits. If any Participant or Beneficiary hereunder
should become bankrupt or attempt to transfer, anticipate, alienate, sell,
assign, pledge, encumber, or charge any right or benefit or payment hereunder,
then such right or benefit or payment shall, in the sole discretion of the
Committee, terminate.
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ARTICLE X
AMENDMENT OR TERMINATION OF PLAN
(a) The Board of Directors may amend or terminate this Plan at any time,
except that Units awarded to a Participant (and the corresponding right to
receive common shares of Company stock) pursuant to the Plan may not be subject
to reduction or rescission, and except that without approval by vote of holders
of the outstanding common shares of the Company, the maximum number of Plan
Units which may be granted to all Participants may not be increased and this
Article X may not be amended.
(b) Unless sooner terminated pursuant to the provisions herein, the Plan
shall terminate on January 1, 2006. No grants of Incentive Compensation Units
shall be made under this Plan after December 31, 2002, and no awards of
Incentive Compensation Units shall be made under this Plan after December 31,
2005.
ARTICLE XI
MISCELLANEOUS PROVISIONS
(a) No Employee or other person shall have any claim or right to receive
Units under the Plan until an award is approved by the Committee, except as
provided in Paragraph (b) of Article VIII. Neither the Plan nor any action taken
hereunder shall be construed as giving any Employee any right to be retained in
the employ of the Company.
(b) The Plan shall at all times be entirely unfunded and no provision
shall at any time be made with respect to segregating assets of the Company for
the payment of any benefits hereunder. No Participant or other person shall have
any interest in any particular asset of the Company by reason of the right to
receive a benefit under the Plan and any such Participant or other person shall
have only the right of a general unsecured creditor of the Company with respect
to any rights under the Plan.
(c) The Company shall have the right to deduct from all amounts paid
pursuant to the Plan any taxes required by law to be withheld with respect to
such award.
(d) No Employee shall have any right as a shareholder under this Plan
unless and until certificates for shares of common shares are transferred to
Employee in payment of an award hereunder.
(e) For purposes of paying benefits to the Participants pursuant to the
Plan, the Committee may purchase common shares, may use common shares held in
the Company's treasury, or may issue authorized but unissued common shares,
subject to appropriate regulatory approval.
(f) The obligation of the Company to sell and deliver common shares under
the Plan shall be subject to all applicable laws, regulations, rules and
approvals, including, but not by way of limitation, the effectiveness of a
registration statement under the Securities Act of 1933 if deemed necessary or
appropriate by the Company. Certificates for shares of common shares issued
hereunder may be legended as the Board shall deem appropriate.
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ARTICLE XII
EFFECTIVE DATE OF PLAN
This Plan shall become operative and in effect on such date as shall be
fixed by the Board of Directors of the Company in its sole discretion following
approval by vote of the holders of the outstanding common shares of the Company.
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