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As filed with the Securities and Exchange Commission on June 5, 1998
Registration No. 333-_________
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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM S-8
REGISTRATION STATEMENT UNDER THE
SECURITIES ACT OF 1933
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SEMPRA ENERGY
(Exact name of Registrant as specified in its charter)
California 33-0643023
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
101 Ash Street, San Diego, California 92101
(619) 696-2000
(Address and telephone number of Principal Executive Offices)
Sempra Energy 1998 Long Term Incentive Plan; Sempra Energy 1998 Non-Employee
Directors' Stock Plan; Sempra Energy Trading Retirement Savings Plan;
Sempra Energy Savings Plan; Pacific Enterprises Retirement Savings Plan;
Southern California Gas Company Retirement Savings Plan;
Enova Corporation 1986 Long-Term Incentive Plan;
San Diego Gas & Electric Company Savings Plan;
Pacific Lighting Corporation Stock Incentive Plan;
Pacific Enterprises Employee Stock Option Plan
(Full titles of the Plans)
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John R. Light, Esq.
SEMPRA ENERGY
101 Ash Street, San Diego, California 92101
(619) 696-2000
(Name, address and telephone number of agent for service)
CALCULATION OF REGISTRATION FEE
EXHIBIT 3.2
EXHIBIT 3.2
SEMPRA ENERGY
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BYLAWS
(As amended and restated
and effective May 26, 1998)
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ARTICLE I
CORPORATE MANAGEMENT
The business and affairs of Sempra Energy (the "Corporation") shall be
managed, and all corporate powers shall be exercised by or under the direction
of the board of directors of the Corporation (the "Board"), subject to the
Articles of Incorporation and the General Corporation Law of the State of
California (the "General Corporation Law").
ARTICLE II
OFFICERS
1. Designation. The officers of the Corporation shall consist of a
Chairman of the Board (the "Chairman"), a Vice Chairman of the Board (the "Vice
Chairman"), a Chief Executive Officer or a President, or both, a Chief Operating
Officer, one or more Vice Presidents, a Secretary, one or more Assistant
Secretaries, a Treasurer, one or more Assistant Treasurers, a Controller, one or
more Assistant Controllers, and such other officers as the Board may from time
to time elect. Any two or more of such offices may be held by the same person.
2. Term. The officers shall be elected by the Board as soon as possible
after the Annual Meeting of the Shareholders, and shall hold office for one year
or until their successors are duly elected. Any officers may be removed from
office at any time, with or without cause, by the vote of a majority of the
authorized number of Directors. The Board may fill vacancies or elect new
officers at any time.
3. Chairman. The Chairman shall be a Director and shall preside at
meetings of the Board and meetings of the Shareholders. The Chairman shall be
responsible for Board and
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Shareholder governance and shall have such duties and responsibilities as are
customarily assigned to such position.
4. Vice Chairman. The Vice Chairman shall be a Director and, in the
absence of the Chairman, shall preside at meetings of the Board and meetings of
Shareholders. The Vice Chairman shall assist the Chairman in his or her
responsibility for Board and Shareholder governance and shall have such duties
as are customarily assigned to such position.
5. Chief Executive Officer. The duties of the Chief Executive Officer
of the Corporation shall include, but not be limited to, directing the overall
business, affairs and operations of the Corporation, through its officers, all
of whom shall report directly or indirectly to the Office of the Chairman or, if
there is no Office of the Chairman, to the Chief Executive Officer.
6. President. The duties of the President of the Corporation shall
include, but not be limited to, assisting the Chief Executive Officer (to the
extent the President is not also the Chief Executive Officer) in directing the
overall business, affairs and operations of the Corporation.
7. Chief Operating Officer. The duties of the Chief Operating Officer
of the Corporation shall include, but not be limited to, directing the
day-to-day business, affairs and operations of the Corporation, under the
supervision of the Chief Executive Officer and (to the extent the Chief
Executive Officer is not also the President) the President.
8. Vice Presidents. The Vice Presidents, one of whom shall be the chief
financial officer, shall have such duties as the Chief Executive Officer or the
Board shall designate.
9. Chief Financial Officer. The Chief Financial Officer shall be
responsible for the issuance of securities and the management of the
Corporation's cash, receivables and temporary investments.
10. Secretary and Assistant Secretary. The Secretary shall attend all
meetings of the Shareholders and the Board, keep a true and accurate record of
the proceedings of all such meetings and attest the same by his or her
signature, have charge of all books, documents and papers which appertain to the
office, have custody of the corporate seal and affix it to all papers and
documents requiring sealing, give all notices of meetings, have the custody of
the books of stock certificates and transfers, issue all stock certificates, and
perform all other duties usually appertaining to the office and all duties
designated by the bylaws, the Chief Executive Officer or the Board. In the
absence of the Secretary, any Assistant Secretary may perform the duties and
shall have the powers of the Secretary.
11. Treasurer and Assistant Treasurer. The Treasurer shall perform all
duties usually appertaining to the office and all duties designated by the Chief
Executive Officer or the Board. In the absence of the Treasurer, any Assistant
Treasurer may perform the duties and shall have all the powers of the Treasurer.
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12. Controller and Assistant Controller. The Controller shall be
responsible for establishing financial control policies for the Corporation,
shall be its principal accounting officer, and shall perform all duties usually
appertaining to the office and all duties designated by the Chief Executive
Officer or the Board. In the absence of the Controller, any Assistant Controller
may perform the duties and shall have all the powers of the Controller.
ARTICLE III
DIRECTORS
1. Number. The Board shall consist of not less than nine nor more than
17 Directors. The exact number of Directors shall be fixed from time to time,
within the limits specified, in the manner specified in the Articles of
Incorporation.
2. Election. A Board shall be elected as set forth in the Articles of
Incorporation.
3. Vacancies. Vacancies in the Board may be filled as set forth in the
Articles of Incorporation.
4. Compensation. Members of the Board shall receive such compensation
as the Board may from time to time determine.
5. Regular Meetings. A regular meeting of the Board shall be held
immediately after each Annual Meeting of Shareholders. Other regular meetings of
the Board shall be held on such dates and at such times and places as may be
designated by resolution of the Board. Notice of regular meetings of the Board
need not otherwise be given to Directors.
6. Special Meetings. Special meetings of the Board may be called at any
time by the Chairman, the Vice Chairman, the Chief Executive Officer, the
President or a majority of the authorized number of Directors. Notice shall be
given to each Director of the date, time and place of each special meeting of
the Board. If given by mail, such notice shall be mailed to each Director at
least four days before the date of such meeting. If given personally or by
telephone (including a voice messaging system or other system or technology
designed to record and communicate messages), telegraph, facsimile, electronic
mail or other electronic means, such notice shall be given to each Director at
least 24 hours before the time of such meeting. Notice of a meeting need not be
given to any Director who signs a waiver of notice, whether before or after the
meeting, or who attends the meeting without protesting, prior thereto or at its
commencement, the lack of notice to such Director.
7. Quorum. A majority of the authorized number of Directors shall be
necessary to constitute a quorum for the transaction of business, and every act
or decision of a majority of the Directors present at a meeting at which a
quorum is present shall be valid as the act of the Board,
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provided that a meeting at which a quorum is initially present may continue to
transact business, notwithstanding the withdrawal of Directors, if any action
taken is approved by at least a majority of the required quorum for such
meeting. A majority of Directors present at any meeting, in the absence of a
quorum, may adjourn to another time.
8. Action Upon Consent. Any action required or permitted to be taken by
the Board may be taken without a meeting, if all members of the Board shall
individually or collectively consent in writing to such action.
9. Telephonic Participation. Members of the Board may participate in a
meeting through use of conference telephone or similar communications equipment,
so long as all members participating in the meeting can hear one another. Such
participation constitutes presence in person at the meeting.
10. Directors Emeritus. The Board may from time to time elect one or
more Directors Emeritus. Each Director Emeritus shall have the privilege of
attending meetings of the Board, upon invitation of the Chairman, the Vice
Chairman, the Chief Executive Officer or the President. No Director Emeritus
shall be entitled to vote on any business coming before the Board or be counted
as a member of the Board for any purpose whatsoever.
ARTICLE IV
COMMITTEES
1. Executive Committee. The Board shall appoint an Executive Committee.
The Chairman shall be ex officio the Chairman thereof, unless the Board shall
appoint another member as Chairman. The Executive Committee shall be composed of
members of the Board, and shall at all times be subject to its control. The
Executive Committee shall have all the authority of the Board, except with
respect to:
(a) The approval of any action which also requires the
approval of Shareholders or approval of the outstanding shares;
(b) The filling of vacancies on the Board or on any committee;
(c) The fixing of compensation of the Directors for serving on
the Board or on any committee;
(d) The amendment or repeal of bylaws or the adoption of new
bylaws;
(e) The amendment or repeal of any resolution of the Board
which by its express terms is not so amendable or repealable;
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(f) A distribution to the Shareholders, except in a periodic
amount or within a price range set forth in the Articles of
Incorporation or determined by the Board; and
(g) The appointment of other committees of the Board or the
members thereof.
2. Audit Committee. The Board shall appoint an Audit Committee
comprised solely of Directors who are neither officers nor employees of the
Corporation and who are free from any relationship that, in the opinion of the
Board, would interfere with the exercise of independent judgment as committee
members. The Audit Committee shall review and make recommendations to the Board
with respect to:
(a) The engagement of an independent accounting firm to audit
the Corporation's financial statements and the terms of such
engagement;
(b) The policies and procedures for maintaining the
Corporation's books and records and for furnishing appropriate
information to the independent auditor;
(c) The evaluation and implementation of any recommendations
made by the independent auditor;
(d) The adequacy of the Corporation's internal audit controls
and related personnel; and
(e) Such other matters relating to the Corporation's financial
affairs and accounts as the Committee deems desirable.
3. Other Committees. The Board may appoint such other committees of its
members as it shall deem desirable, and, within the limitations specified for
the Executive Committee, may vest such committees with such powers and
authorities as it shall see fit, and all such committees shall at all times be
subject to its control.
4. Notice of Meetings. Unless the Board shall establish different
requirements for the giving of notice of committee meetings, notice of each
meeting of any committee of the Board shall be given to each member of such
committee, and the giving of such notice shall be subject to the same
requirements as the giving of notice of special meetings of the Board, except
that notice of regular meetings of any committee for which the date, time and
place has been previously designated by resolution of the committee need not
otherwise be given to members of the Committee.
5. Conduct of Meetings. The provisions of these bylaws with respect to
the conduct of meetings of the Board shall govern the conduct of committee
meetings. Written minutes shall be kept of all committee meetings.
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ARTICLE V
SHAREHOLDER MEETINGS
1. Annual Meeting.
(a) An Annual Meeting of Shareholders shall be held each year on such
date and at such time as may be designated by resolution of the Board.
(b) At an Annual Meeting of Shareholders, only such business shall be
conducted as shall have been properly brought before the Annual Meeting. To be
properly brought before an Annual Meeting, business must be (i) specified in the
notice of the Annual Meeting (or any supplement thereto) given by or at the
direction of the Board or (ii) otherwise properly brought before the Annual
Meeting by a Shareholder. For business to be properly brought before an Annual
Meeting by a Shareholder, including the nomination of any person (other than a
person nominated by or at the direction of the Board) for election to the Board,
the Shareholder must have given timely and proper written notice to the
Secretary of the Corporation. To be timely, the Shareholder's written notice
must be received at the principal executive office of the Corporation not less
than 60 nor more than 120 in advance of the date corresponding to the date of
the last Annual Meeting of Shareholders; provided, however, that in the event
the Annual Meeting to which the Shareholder's written notice relates is to be
held on a date that differs by more than 60 days from the date of the last
Annual Meeting of Shareholders, the Shareholder's written notice to be timely
must be so received not later than the close of business on the tenth day
following the date on which public disclosure of the date of the Annual Meeting
is made or given to Shareholders. To be proper the Shareholder's written notice
must set forth as to each matter the Shareholder proposes to bring before the
Annual Meeting (w) a brief description of the business desired to be brought
before the Annual Meeting, (x) the name and address of the Shareholder as they
appear on the Corporation's books, (y) the class and number of shares of the
Corporation that are beneficially owned by the Shareholder and (z) any material
interest of the Shareholder in such business. In addition, if the Shareholder's
written notice relates to the nomination at the Annual Meeting of any person for
election to the Board, such notice to be proper must also set forth (A) the
name, age, business address and residence address of each person to be so
nominated, (B) the principal occupation or employment of each such person, (C)
the number of shares of capital stock of the Corporation beneficially owned by
each such person and (D) such other information concerning each such person as
would be required under the rules of the Securities and Exchange Commission in a
proxy statement soliciting proxies for the election of such person as a
Director, and must be accompanied by a consent, signed by each such person, to
serve as a Director of the Corporation if elected. Notwithstanding anything in
the Bylaws to the contrary, no business shall be conducted at an Annual Meeting
except in accordance with the procedures set forth in this Section.
2. Special Meetings. Special meetings of the Shareholders for any
purpose whatsoever may be called at any time by the Chairman, the Vice Chairman,
the Chief Executive Officer, the President or the Board, or by one or more
Shareholders holding not less than one-tenth of the voting
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power of the Corporation. Within five business days after receiving such a
written request from Shareholders of the corporation, the Board shall determine
whether such Shareholders own not less than one-tenth of the voting power of the
Corporation and notify the requesting party or parties of its finding.
3. Place of Meetings. All meetings of the Shareholders shall be held at
the principal office of the Corporation in San Diego, California, or at such
other locations as may be designated by the Board.
4. Notice of Meetings. Written notice shall be given to each
Shareholder entitled to vote of the date, time, place and general purpose of
each meeting of Shareholders. Notice may be given personally, or by mail, or by
telegram, charges prepaid, to the Shareholder's address appearing on the books
of the Corporation. If a Shareholder supplies no address to the Corporation,
notice shall be deemed to be given if mailed to the place where the principal
office of the Corporation is situated, or published at least once in some
newspaper of general circulation in the county of said principal office. Notice
of any meeting shall be sent to each Shareholder entitled thereto not less than
10 nor more than 60 days before such meeting.
5. Voting. The Board may fix a time in the future not less than 10 nor
more than 60 days preceding the date of any meeting of Shareholders, or not more
than 60 days preceding the date fixed for the payment of any dividend or
distribution, or for the allotment of rights, or when any change or conversion
or exchange of shares shall go into effect, as a record date for the
determination of the Shareholders entitled to notice of and to vote at any such
meeting or entitled to receive any such dividend or distribution, or any such
allotment of rights, or to exercise the rights in respect to any such change,
conversion, or exchange of shares. In such case only Shareholders of record at
the close of business on the date so fixed shall be entitled to notice of and to
vote at such meeting or to receive such dividend, distribution or al allotment
of rights, or to exercise such rights, as the case may be, notwithstanding any
transfer of any shares on the books of the Corporation after any record date
fixed as aforesaid. The Board may close the books of the Corporation against any
transfer of shares during the whole or any part of such period.
6. Quorum. At any Shareholders' meeting a majority of the shares
entitled to vote must be represented in order to constitute a quorum for the
transaction of business, but a majority of the shares present, or represented by
proxy, though less than a quorum, may adjourn the meeting to some other date,
and from day to day or from time to time thereafter until a quorum is present.
7. Confidential Voting. Each Shareholder of the Corporation shall be
entitled to elect voting confidentiality as provided in this Section on all
matters submitted to Shareholders by the Board and each form of proxy, consent,
ballot or other written voting instruction distributed to the Shareholders shall
include a check box or other appropriate mechanism by which Shareholders who
desire to do so may so elect voting confidentiality. All inspectors of election,
vote tabulators and other persons appointed or engaged by or on behalf of the
Corporation to process voting instructions (none of whom shall be a Director or
officer of the Corporation or any of its affiliates) shall be advised of and
instructed to comply with this Section and, except as required or permitted
hereby,
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not at any time to disclose to any person (except to other persons engaged in
processing voting instructions), the identity and individual vote of any
Shareholder electing voting confidentiality; provided, however, that voting
confidentiality shall not apply and the name and individual vote of any
Shareholder may be disclosed to the Corporation or to any person (i) to the
extent that such disclosure is required by applicable law or is appropriate to
assert or defend any claim relating to voting or (ii) with respect to any matter
for which votes of Shareholders are solicited in opposition to any of the
nominees or the recommendations of the Board unless the persons engaged in such
opposition solicitation provide Shareholders of the Corporation with voting
confidentiality (which, if not otherwise provided, will be requested by the
Corporation) comparable in the opinion of the Corporation to the voting
confidentiality provided by this Section.
ARTICLE VI
CERTIFICATES FOR SHARES
1. Form. Certificates for shares of the Corporation shall state the
name of the registered holder of the shares represented thereby, and shall be
signed by the Chairman, the Vice Chairman, the Chief Executive Officer, the
President or a Vice President, and by the Secretary or an Assistant Secretary.
Any such signature may be by facsimile thereof.
2. Surrender. Upon a surrender to the Secretary, or to a transfer agent
or transfer clerk of the Corporation, of a certificate for shares duly endorsed
or accompanied by proper evidence of succession, assignment or authority to
transfer, the Corporation shall issue a new certificate to the party entitled
thereto, cancel the old certificate and record the transaction upon its books.
3. Right of Transfer. When a transfer of shares on the books is
requested and there is a reasonable doubt as to the rights of the persons
seeking such transfer, the Corporation, or its transfer agent or transfer clerk,
before entering the transfer of the shares on its books or issuing any
certificate therefor, may require from such person reasonable proof of his or
her rights, and, if there remains a reasonable doubt in respect thereto, may
refuse a transfer unless such person shall give adequate security or a bond of
indemnity executed by a corporate surety, or by two individual sureties,
satisfactory to the Corporation as to form, amount and responsibility of
sureties.
4. Conflicting Claims. The Corporation shall be entitled to treat the
holder of record of any shares as the holder in fact thereof and shall not be
bound to recognize any equitable or other claim to or interest in such shares on
the part of any other person, whether or not it shall have express or other
notice thereof, save as expressly provided by the laws of the State of
California.
5. Loss, Theft and Destruction. In the case of the alleged loss, theft
or destruction of any certificate for shares, another may be issued in its place
as follows: (a) the owner of the lost, stolen or destroyed certificate shall
file with the transfer agent of the Corporation a duly executed Affidavit or
Loss and Indemnity Agreement and Certificate of Coverage, accompanied by a check
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representing the cost of the bond as outlined in any blanket lost securities and
avoid administration bond previously approved by the Directors of the
Corporation and executed by a surety company satisfactory to them, which bond
shall indemnify the Corporation, its transfer agents and registrars; or (b) the
Board may, in its discretion, authorize the issuance of a new certificate to
replace a lost, stolen or destroyed certificate on such other terms and
conditions as it may determine to be reasonable.
ARTICLE VII
INDEMNIFICATION OF CORPORATE AGENTS
1. Definitions. For the purposes of this Article, "agent" means any
person who (i) is or was a Director, officer, employee or other agent of the
Corporation, (ii) is or was serving at the request of the Corporation as a
director, officer, employee or agent of another foreign or domestic corporation,
partnership, joint venture, trust or other enterprise or (iii) was a director,
officer, employee or agent of a foreign or domestic corporation which was a
predecessor corporation of the Corporation or of another enterprise at the
request of such predecessor corporation; "proceeding" means any threatened,
pending or completed action or proceeding, whether civil, criminal,
administrative or investigative; and "expenses" includes, without limitation,
attorneys' fees and any expenses of establishing a right to indemnification
under Sections 4 or 5(c) of this Article.
2. Indemnification for Third Party Actions. The Corporation shall
indemnify any person who is or was a party, or is threatened to be made a party,
to any proceeding (other than an action by or in the right of the Corporation to
procure a judgment in its favor) by reason of the fact that such person is or
was an agent of the Corporation against expenses, judgments, fines, settlements
and other amounts actually and reasonably incurred in connection with such
proceeding if such person acted in good faith and in a manner such person
reasonably believed to be in the best interests of the Corporation and, in the
case of a criminal proceeding, had no reasonable cause to believe the conduct of
such person was unlawful. The termination of any proceeding by judgment, order,
settlement, conviction or upon a plea of nolo contendere or its equivalent shall
not, of itself, create a presumption that the person did not act in good faith
and in a manner which the person reasonably believed to be in the best interests
of the Corporation or that the person had reasonable cause to believe that the
person's conduct was unlawful.
3. Indemnification for Derivative Actions. The Corporation shall
indemnify any person who is or was a party, or is threatened to be made a party,
to any threatened, pending or completed action by or in the right of the
Corporation to procure a judgment in its favor by reason of the fact that such
person is or was an agent of the Corporation against expenses actually and
reasonably incurred by such person in connection with the defense or settlement
of such action if such person acted in good faith and in a manner such person
believed to be in the best interests of the Corporation and its Shareholders. No
indemnification shall be made under this Section (a) in respect of any claim,
issue or matter as to which such person shall have been adjudged to be liable to
the
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Corporation in the performance of such person's duty to the Corporation and its
Shareholders, unless and only to the extent that the court in which such
proceeding is or was pending shall determine upon application that, in view of
all the circumstances of the case, such person is fairly and reasonably entitled
to indemnity for expenses and then only to the extent that the court shall
determine; (b) of amounts paid in settling or otherwise disposing of a pending
action without court approval; or (c) of expenses incurred in defending a
pending action which is settled or otherwise disposed of without court approval.
4. Successful Defense. Notwithstanding any other provision of this
Article, to the extent that an agent of the Corporation has been successful on
the merits or otherwise (including the dismissal of an action without prejudice
or the settlement of a proceeding or action without admission of liability) in
defense of any proceeding referred to in Sections 2 or 3 of this Article, or in
defense of any claim, issue or matter therein, the agent shall be indemnified
against expenses (including attorneys' fees) actually and reasonably incurred in
connection therewith.
5. Discretionary Indemnification. Except as provided in Section 4, any
indemnification under Section 3 of this Article shall be made by the Corporation
only if authorized in the specific case, upon a determination that
indemnification of the agent is proper in the circumstances because the agent
has met the applicable standard of conduct set forth in Section 3, by (a) a
majority vote of a quorum consisting of Directors who are not parties to such
proceeding; (b) if such a quorum of Directors is not obtainable, by independent
legal counsel in a written opinion; (c) approval by the affirmative vote of a
majority of the shares of this Corporation represented and voting at a duly held
meeting at which a quorum is present (which shares voting affirmatively also
constitute at least a majority of the required quorum) or by the written consent
of holders of a majority of the outstanding shares which would be entitled to
vote at such meeting and, for such purpose, the shares owned by the person to be
indemnified shall not be considered outstanding or entitled to vote; or (d) the
court in which such proceeding is or was pending, upon application made by the
Corporation, the agent or the attorney or other person rendering services in
connection with the defense, whether or not such application by said agent,
attorney or other person is opposed by the Corporation.
6. Advancement of Expenses. Expenses incurred in defending any
proceeding may be advanced by the Corporation prior to the final disposition of
such proceeding upon receipt of an undertaking by or on behalf of the agent to
repay such amount if it shall be determined ultimately that the agent is not
entitled to be indemnified as authorized in this Article.
7. Restriction on Indemnification. No indemnification or advance shall
be made under this Article, except as provided in Sections 4 and 6 hereof, in
any circumstance where it appears that it would be inconsistent with (a) a
provision of the Articles of Incorporation of the Corporation, its bylaws, a
resolution of the Shareholders or an agreement in effect at the time of the
accrual of the alleged cause of action asserted in the proceeding in which the
expenses were incurred or other amounts were paid which prohibits or otherwise
limits indemnification; or (b) any condition expressly imposed by a court in
approving a settlement.
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8. Non-Exclusive. The indemnification provided by his Article shall not
be deemed exclusive of any other rights to which those seeking indemnification
may be entitled under any statute, bylaw, agreement, vote of Shareholders or
disinterested Directors or otherwise, both as to action in an official capacity
and as to action in another capacity while holding such office. The rights to
indemnification under this Article shall continue as to a person who has ceased
to be a Director, officer, employee, or agent and shall inure to the benefit of
the heirs, executors, and administrators of the person. Nothing contained in
this Section 8 shall affect any right to indemnification to which persons other
than such Directors and officers may be entitled by contract or otherwise.
9. Expenses as a Witness. To the extent that any agent of the
Corporation is by reason of such position, or a position with another entity at
the request of the Corporation, a witness in any action, suit or proceeding, he
or she shall be indemnified against all costs and expenses actually and
reasonably incurred by him or her or on his or her behalf in connection
therewith.
10. Insurance. The Corporation may purchase and maintain directors and
officers liability insurance, at its expense, to protect itself and any
Director, officer or other named or specified agent of the Corporation or
another corporation, partnership, joint venture, trust or other enterprise
against any expense, liability or loss asserted against or incurred by the agent
in such capacity or arising out of the agent's status as such, whether or not
the Corporation would have the power to indemnify the agent against such
expense, liability or loss under the provisions of this Article or under the
General Corporation Law.
11. Separability. Each and every paragraph, sentence, term and
provision of this Article is separate and distinct so that if any paragraph,
sentence, term or provision hereof shall be held to be invalid or unenforceable
for any reason, such invalidity or unenforceability shall not affect the
validity or unenforceability of any other paragraph, sentence, term or provision
hereof. To the extent required, any paragraph, sentence, term or provision of
this Article may be modified by a court of competent jurisdiction to preserve
its validity and to provide the claimant with, subject to the limitations set
forth in this Article and any agreement between the Corporation and claimant,
the broadest possible indemnification permitted under applicable law. If this
Article or any portion hereof shall be invalidated on any ground by any court of
competent jurisdiction, then the Corporation shall nevertheless have the power
to indemnify each Director, officer, employee, or other agent against expenses
(including attorneys' fees), judgments, fines and amounts paid in settlement
with respect to any action, suit, proceeding or investigation, whether civil,
criminal or administrative, and whether internal or external, including a grand
jury proceeding and including an action or suit brought by or in the right of
the Corporation, to the full extent permitted by any applicable portion of this
Article that shall not have been invalidated or by any other applicable law.
12. Agreements. Upon, and in the event of, a determination of the Board
to do so, the Corporation is authorized to enter into indemnification agreements
with any or all of its Directors, officers, employees and other agents providing
for indemnification to the fullest extent permissible under California law and
the Corporation's Articles of Incorporation.
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13. Retroactive Appeal. In the event this Article is repealed or
modified so as to reduce the protection afforded herein, the indemnification
provided by this Article shall remain in full force and effect with respect to
any act or omission occurring prior to such repeal or modification.
ARTICLE VIII
OBLIGATIONS
All obligations of the Corporation, including promissory notes, checks,
drafts, bills of exchange, and contracts of every kind, and evidences of
indebtedness issued in the name of, or payable to, or executed on behalf of the
Corporation, shall be signed or endorsed by such officer or officers, or agent
or agents, of the Corporation and in such manner as, from time to time, shall be
determined by the Board.
ARTICLE IX
CORPORATE SEAL
The corporate seal shall set forth the name of the Corporation, state,
and date of incorporation.
ARTICLE X
AMENDMENTS
These bylaws may be amended or repealed as set forth in the Articles of
Incorporation.
ARTICLE XI
AVAILABILITY OF BYLAWS
A current copy of these bylaws shall be mailed or otherwise furnished
to any Shareholder of record within five days after receipt of a request
therefor.
EXHIBIT 4.1
EXHIBIT 4.1
SEMPRA ENERGY
1998 LONG TERM INCENTIVE PLAN
SEMPRA ENERGY
1998 LONG TERM INCENTIVE PLAN
1. Purpose. The purposes of the Sempra Energy 1998 Long Term
Incentive Plan (the "Plan") are to attract, retain and motivate officers and
other key employees of SEMPRA ENERGY, a California corporation (the "Company"),
and its Subsidiaries (as hereinafter defined), to compensate them for their
contributions to the growth and profits of the Company and to encourage
ownership by them of stock of the Company.
2. Definitions. For purposes of the Plan, the following terms
shall be defined as follows:
"Administrator" means the individual or individuals to whom
the Committee delegates authority under the Plan in accordance with
Section 3(d).
"Affiliate" and "Associate" have the respective meanings
ascribed to such terms in Rule 12b-2 promulgated under the Exchange
Act.
"Award" means an award made pursuant to the terms of the Plan
to an Eligible Individual in the form of Stock Options, Stock
Appreciation Rights, Restricted Stock Awards, Restricted Stock Units,
Performance Share Awards, Stock Awards, Section 162(m) Awards, dividend
equivalents or other awards determined by the Committee.
"Award Agreement" means a written agreement or certificate
granting an Award. An Award Agreement shall be executed by an officer
on behalf of the Company and shall contain such terms and conditions as
the Committee deems appropriate and that are not inconsistent with the
terms of the Plan. The Committee may, in its discretion, require that
an Award Agreement be executed by the Participant to whom the relevant
Award is made.
"Beneficial Owner" has the meaning set forth in Rule 13d-3
under the Exchange Act.
"Board" means the Board of Directors of the Company.
A "Change in Control" of the Company shall be deemed to have
occurred when:
(i) Any Person is or becomes the Beneficial Owner,
directly or indirectly, of securities of the Company
representing twenty percent (20%) or more of the
combined voting power of the Company's then outstanding
securities; or
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(ii) The following individuals cease for any reason to
constitute a majority of the number of directors then
serving: individuals who, on the Effective Date,
constitute the Board and any new director (other than a
director whose initial assumption of office is in
connection with an actual or threatened election
contest, including, but not limited to, a consent
solicitation, relating to the election of directors of
the Company) whose appointment or election by the Board
or nomination for election by the Company's shareholders
was approved or recommended by a vote of at least
two-thirds (2/3) of the directors then still in office
who either were directors on the date hereof or whose
appointment, election or nomination for election was
previously so approved or recommended; or
(iii) There is consummated a merger or consolidation of
the Company or any direct or indirect subsidiary of the
Company with any other corporation, other than (A) a
merger or consolidation which would result in the voting
securities of the company outstanding immediately prior
to such merger or consolidation continuing to represent
(either by remaining outstanding or by being converted
into voting securities of the surviving entity or any
parent thereof), in combination with the ownership of
any trustee or other fiduciary holding securities under
an employee benefit plan of the Company or any
subsidiary of the Company, at least sixty percent (60%)
of the combined voting power of the securities of the
Company or such surviving entity or any parent thereof
outstanding immediately after such merger or
consolidation, or (B) a merger or consolidation effected
to implement a recapitalization of the Company (or
similar transaction) in which no Person is or becomes
the beneficial owner, directly or indirectly, of
securities of the Company (not including in the
securities beneficially owned by such Person any
securities acquired directly from the Company or its
affiliates other than in connection with the securities
acquired directly from the Company or its affiliates
other than in connection with the acquisition by the
Company or its affiliates of a business) representing
twenty percent (20%) or more of the combined voting
power of the Company's then outstanding securities; or
(iv) The shareholders of the Company approve a plan of
complete liquidation or dissolution of the Company or
there is consummated an agreement for the sale or
disposition by the company of all or substantially all
of the Company's assets, other than a sale or
disposition by the Company of all or substantially all
of the Company's assets to an entity, at least sixty
percent (60%) of the
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combined voting power of the voting securities of which
are owned by shareholders of the Company in
substantially the same proportions as their ownership of
the Company immediately prior to such sale.
"Code" means the Internal Revenue Code of 1986, as amended,
and the applicable rulings and regulations thereunder.
"Committee" means the Compensation Committee of the Board, any
successor committee thereto or any other committee appointed by the
Board to administer the Plan.
"Common Stock" means the common stock, with no par value, of
the Company.
"Eligible Individuals" means the individuals described in
Section 6 who are eligible to receive Awards under the Plan.
"Exchange Act" means the Securities Exchange Act of 1934, as
amended, and the applicable rulings and regulations thereunder.
"Fair Market Value" means, in the event that the Common Stock
is traded on a recognized securities exchange, the closing price of the
Common Stock on the date set for valuation, or in the event that the
Common Stock is quoted by the National Association of Securities
Dealers Automated Quotations on National Market Issues system, an
amount equal to the average of the high and low prices of the Common
Stock on such quotations system on the date set for valuation or, if no
sales of Common Stock were made on said exchange or so quoted such
system on that date, the average of the high and low prices of the
Common Stock on the next preceding day on which sales were made on such
exchange or quotations system; or, if the Common Stock is not so traded
or quoted, that value determined, in its sole discretion, by the
Committee.
"Incentive Stock Option" means a Stock Option which is an
"incentive stock option" within the meaning of Section 422 of the Code
and designated by the Committee as an Incentive Stock Option in an
Award Agreement.
"Nonqualified Stock Option" means a Stock Option which is not
an Incentive Stock Option.
"Parent" means any corporation which is a "parent corporation"
within the meaning of Section 424(e) of the Code with respect to the
relevant entity.
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"Participant" means an Eligible Individual to whom an Award
has been granted under the Plan.
"Performance Period" means a fiscal year of the Company or
such other period that may be specified by the Committee in connection
with the grant of a Section 162(m) Award.
"Performance Share Award" means a conditional Award of shares
of Common Stock granted to an Eligible Individual pursuant to Section
12 hereof.
"Person" means any person, entity or "group" within the
meaning of Section 13(d)(3) or Section 14(d)(2) of the Exchange Act,
except that such term shall not include (i) the Company or any of its
Subsidiaries, (ii) a trustee or other fiduciary holding securities
under an employee benefit plan of the Company or any of its Affiliates,
(iii) an underwriter temporarily holding securities pursuant to an
offering of such securities, (iv) a corporation owned, directly or
indirectly, by the shareholders of the Company in substantially the
same proportions as their ownership of stock of the Company, or (v) a
person or group as used in Rule 13d- 1(b) under the Exchange Act.
"Restricted Stock Award" means an Award of restricted shares
of Common Stock granted to an Eligible Individual pursuant to Section
10 hereof.
"Restricted Stock Units" means an Award of restricted share
units as described in Section 11 hereof.
"Section 162(m) Participant" means, for a given fiscal year of
the Company, any Participant who is a "covered employee" within the
meaning of the regulations promulgated under Section 162(m) of the
Code.
"Stock Appreciation Right" means an Award to receive all or
some portion of the appreciation on shares of Common Stock granted to
an Eligible Individual pursuant to Section 9 hereof.
"Stock Award" means an Award of shares of Common Stock granted
to an Eligible Individual pursuant to Section 13 hereof.
"Stock Option" means an option to purchase shares of Common
Stock granted to an Eligible Individual pursuant to Section 8 hereof.
"Subsidiary" means (i) any majority-owned subsidiary of the
Company and (ii) any other corporation or other entity in which the
Company, directly or
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indirectly, has an equity or similar interest and which the Committee
designates as a Subsidiary for the purposes of the Plan.
"Substitute Award" means an Award granted upon assumption of,
or in substitution for, outstanding equity awards previously granted by
a company or other entity in connection with a corporate transaction,
such as a merger, combination, consolidation or acquisition of property
or stock; provided, however, that in no event shall the term
"Substitute Award" be construed to refer to an award made in connection
with a cancellation and repricing of a Stock Option.
3. Administration of the Plan.
(a) Power and Authority of the Committee. The Plan shall be
administered by the Committee, which shall have full power and
authority, subject to the express provisions hereof:
(i) to select Participants from among the Eligible
Individuals;
(ii) to grant Awards in accordance with the terms of the
Plan;
(iii) to determine the number of shares of Common Stock
subject to each Award or the cash amount payable in
connection with an Award;
(iv) to determine the terms and conditions of each
Award, including, without limitation, those related to
vesting, forfeiture, payment and exercisability, and the
effect, if any, of a Participant's termination of
employment with the Company or, subject to Section 19
hereof, of a Change in Control on the outstanding Awards
granted to such Participant, and including the authority
to amend the terms and conditions of an Award after the
granting thereof to a Participant in a manner that is
not prejudicial to the rights of such Participant;
(v) to accelerate the vesting or payment of any Award,
the lapse of restrictions on any Award or the date on
which any Stock Option or Stock Appreciation Right
becomes exercisable;
(vi) to specify and approve the provisions of the Award
Agreements delivered to Participants in connection with
their Awards;
(vii) to construe and interpret any Award Agreement
delivered under the Plan;
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(viii) subject to Section 20, to prescribe, amend and
rescind administrative rules and procedures relating to
the Plan;
(ix) to vary the terms of Awards to take account of tax,
securities law and other regulatory requirements,
including those of foreign jurisdictions;
(x) subject to the provisions of the Plan and subject to
such additional limitations and restrictions as the
Committee may impose, to delegate to one or more
officers of the Company some or all of its authority
under the Plan; and
(xi) to make all other determinations and to formulate
such procedures as may be necessary or advisable for the
administration of the Plan.
(b) Plan Construction and Interpretation. The Committee shall
have full power and authority, subject to the express provisions
hereof, to construe and interpret the terms of the Plan and any Award
Agreement entered into hereunder.
(c) Determinations of Committee Final and Binding. All
determinations by the Committee in carrying out and administering the
Plan and in construing and interpreting the Plan and any Award
Agreement shall be final, binding and conclusive for all purposes and
upon all persons interested herein.
(d) Delegation of Authority. The Committee may, but need not,
from time to time delegate some or all of its authority under the Plan
to an Administrator consisting of one or more members of the Committee
or of one or more officers of the Company; provided, however, that the
Committee may not delegate its authority (i) to grant Awards to
Eligible Individuals (A) who are subject on the date of the grant to
the reporting rules under Section 16(a) of the Exchange Act, (B) who
are Section 162(m) Participants or (C) who are officers of the Company
who are delegated authority by the Committee hereunder, or (ii) under
Sections 3(b) and 20 of the Plan. Any delegation hereunder shall be
subject to the restrictions and limits that the Committee specifies at
the time of such delegation or thereafter. Nothing in the Plan shall be
construed as obligating the Committee to delegate authority to an
Administrator, and the Committee may at any time rescind the authority
delegated to an Administrator appointed hereunder or appoint a new
Administrator. At all times, the Administrator appointed under this
Section 3(d) shall serve in such capacity at the pleasure of the
Committee. Any action undertaken by the Administrator in accordance
with the Committee's delegation of authority shall have the same force
and effect as if undertaken directly by the Committee, and any
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reference in the Plan to the Committee shall, to the extent consistent
with the terms and limitations of such delegation, be deemed to include
a reference to the Administrator.
(e) Liability of Committee. No member of the Committee shall
be liable for anything whatsoever in connection with the administration
of the Plan except such person's own willful misconduct. Under no
circumstances shall any member of the Committee be liable for any act
or omission of any other member of the Committee. In the performance of
its functions with respect to the Plan, the Committee shall be entitled
to rely upon information and advice furnished by the Company's
officers, the Company's accountants, the Company's counsel and any
other party the Committee deems necessary, and no member of the
Committee shall be liable for any action taken or not taken in reliance
upon any such advice.
4. Duration of Plan. The Plan shall remain in effect until it
is terminated by the Board of Directors (upon which Board action no further
awards may be granted hereunder) and thereafter until all Awards previously
granted under the Plan are satisfied by the issuance of shares of Common Stock
or the payment of cash or are terminated under the terms of the Plan or under
the Award Agreements entered into in connection with the grant thereof.
Notwithstanding the foregoing, the Plan shall automatically terminate unless it
is ratified by the Company's shareholders every ten years following the
Effective Date (as defined in Section 21(j)).
5. Shares of Stock Subject to the Plan. Subject to adjustment
as provided in Section 15(b) hereof, the number of shares of Common Stock that
may be granted under the Plan pursuant to Awards during each full calendar year
that the Plan is in effect shall not exceed, in the aggregate, 1.5% of the
outstanding shares of Common Stock as of the first day of the calendar year (the
"Section 5 Limit"). Notwithstanding the foregoing, the number of shares of
Common Stock available for grant under the Plan during the 1998 calendar year
shall be 3.4 million shares. Such shares may be either authorized but unissued
shares, treasury shares or any combination thereof. For purposes of determining
the number of shares that remain available for issuance under the Plan, the
following rules shall apply:
(a) the number of Shares subject to outstanding Awards shall
be charged against the Section 5 Limit; and
(b) the Section 5 Limit shall be increased by:
(i) the number of shares subject to an Award (or portion
thereof) which lapses, expires or is otherwise terminated
without the issuance of such shares or is settled by the
delivery of consideration other than shares;
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(ii) the number of shares tendered to pay the exercise
price of a Stock Option or other Award;
(iii) the number of shares withheld from any Award to
satisfy a Participant's tax withholding obligations or, if
applicable, to pay the exercise price of a Stock Option or
other Award; and
(iv) the number of shares that were not made subject to
Awards during the previous year.
In addition, any shares underlying Substitute Awards shall not
be counted against the Section 5 Limit set forth in the first sentence of this
Section 5.
6. Eligible Individuals.
(a) Eligibility Criteria. Awards may be granted by the
Committee to individuals ("Eligible Individuals") who are officers or
other key employees of the Company or a Subsidiary with the potential
to contribute to the future success of the Company or its Subsidiaries
and have a significant effect on the Company's growth and
profitability. Members of the Committee shall not be eligible to
receive Awards under the Plan. An individual's status as an
Administrator will not affect his or her eligibility to participate in
the Plan.
(b) Maximum Number of Shares per Eligible Individual. In
accordance with the requirements imposed under Section 162(m) of the
Code, no Eligible Individual shall receive grants of Awards with
respect to an aggregate of more than 1,000,000 shares of Common Stock
in respect of any fiscal year of the Company.
7. Awards Generally. Awards under the Plan may consist of
Stock Options, Stock Appreciation Rights, Restricted Stock Awards, Performance
Share Awards, Section 162(m) Awards or other awards determined by the Committee.
The terms and provisions of an Award shall be set forth in a written Award
Agreement that is approved by the Committee and delivered or made available to
the Participant as soon as practicable following the date of the Award. The
vesting, exercisability, payment and other restrictions applicable to an Award
(which may include, without limitation, restrictions on transferability or
provision for mandatory resale to the Company) shall be determined by the
Committee and set forth in the applicable Award Agreement. Notwithstanding the
foregoing, the Committee may accelerate (i) the vesting or payment of any Award,
(ii) the lapse of restrictions on any Award or (iii) the date on which any
Option or Stock Appreciation Right first becomes exercisable. The Committee
shall also have full authority to determine and specify in the applicable Award
Agreement the effect, if any, that a Participant's termination of employment for
any reason will have on the vesting, exercisability, payment or lapse of
restrictions applicable to an outstanding Award. The date of a Participant's
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termination of employment for any reason shall be determined in the sole
discretion of the Committee.
8. Stock Options.
(a) Terms of Stock Options Generally. Subject to the terms of
the Plan and the applicable Award Agreement, each Stock Option shall
entitle the Participant to whom such Stock Option was granted to
purchase the number of shares of Common Stock specified in the
applicable Award Agreement and shall be subject to the terms and
conditions established by the Committee in connection with the Stock
Option and specified in the applicable Award Agreement. Upon
satisfaction of the conditions to exercisability specified in the
applicable Award Agreement, a Participant shall be entitled to exercise
the Stock Option in whole or in part and to receive, upon satisfaction
or payment of the exercise price or an irrevocable notice of exercise
in the manner contemplated by Section 8(d) below, the number of shares
of Common Stock in respect of which the Stock Option shall have been
exercised. Stock Options may be either Nonqualified Stock Options or
Incentive Stock Options; provided, however, that in no event shall the
number of shares of Common Stock that may be granted under the Plan
pursuant to Incentive Stock Options exceed, in the aggregate, 1,000,000
shares.
(b) Exercise Price. The exercise price per share of Common
Stock purchasable under a Stock Option shall be determined by the
Committee at the time of grant and set forth in the Award Agreement,
provided, that the exercise price per share of a Stock Option shall be
no less than 100% of the Fair Market Value per share on the date of
grant. Notwithstanding the foregoing, the exercise price per share of a
Stock Option that is a Substitute Award may be less than the Fair
Market Value per share on the date of grant, provided that the excess
of:
(i) the aggregate Fair Market Value (as of the date such
Substitute Award is granted) of the shares subject to the
Substitute Award; over
(ii) the aggregate exercise price thereof;
does not exceed the excess of:
(iii) the aggregate fair market value (as of the time
immediately preceding the transaction giving rise to the
Substitute Award, such fair market value to be determined by
the Committee) of the shares of the predecessor entity that
were subject to the grant assumed or substituted for by the
Company; over
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(iv) the aggregate exercise price of such shares.
(c) Option Term. The term of each Stock Option shall be fixed
by the Committee and set forth in the Award Agreement; provided,
however, that a Stock Option that is an Incentive Stock Option shall
not be exercisable after the expiration of ten (10) years after the
date the Stock Option is granted.
(d) Method of Exercise. Subject to the provisions of the
applicable Award Agreement, the exercise price of a Stock Option may be
paid in cash or previously owned shares or a combination thereof and,
if the applicable Award Agreement so provides, in whole or in part
through the withholding of shares subject to the Stock Option with a
Fair Market Value equal to the exercise price. In accordance with the
rules and procedures established by the Committee for this purpose, the
Stock Option may also be exercised through a "cashless exercise"
procedure approved by the Committee involving a broker or dealer
approved by the Committee, that affords Participants the opportunity to
sell immediately some or all of the shares underlying the exercised
portion of the Stock Option in order to generate sufficient cash to pay
the Stock Option exercise price and/or to satisfy withholding tax
obligations related to the Stock Option.
(e) Deferral. In accordance with rules and procedures
established by the Committee, the Committee may permit a Participant at
or after the time of grant to defer receipt of the Common Stock
underlying a Stock Option to one or more dates elected by the
Participant, subsequent to the date on which such Stock Option is
exercised. Shares that are deferred in accordance with the preceding
sentence shall be noted in a bookkeeping account maintained by the
Company for this purpose and may periodically be credited with
dividends, dividend equivalents, notional interest or earnings in
accordance with procedures established by the Committee in its
discretion from time to time. Deferred amounts shall be paid in cash,
Common Stock or other property, as determined by the Committee at or
after the time of deferral, on the date or dates elected by the
Participant.
9. Stock Appreciation Rights. Stock Appreciation Rights shall
be subject to the terms and conditions established by the Committee in
connection with the Award thereof and specified in the applicable Award
Agreement. Upon satisfaction of the conditions to the payment specified in the
applicable Award Agreement, each Stock Appreciation Right shall entitle a
Participant to an amount, if any, equal to the Fair Market Value of a share of
Common Stock on the date of exercise over the Stock Appreciation Right exercise
price specified in the applicable Award Agreement. At the discretion of the
Committee, payments to a Participant upon exercise of a Stock Appreciation Right
may be made in shares of Common Stock, cash or a combination thereof. A Stock
Appreciation Right may be granted alone or in addition to other Awards, or in
tandem with a Stock Option. If granted in tandem with a Stock Option, a Stock
Appreciation Right shall cover the same number of shares of Common Stock as
covered by the
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Stock Option (or such lesser number of shares as the Committee may determine)
and shall be exercisable only at such time or times and to the extent the
related Stock Option shall be exercisable, and shall have the same term and
exercise price as the related Stock Option. Upon exercise of a Stock
Appreciation Right granted in tandem with a Stock Option, the related Stock
Option shall be canceled automatically to the extent of the number of shares
covered by such exercise; conversely, if the related Stock Option is exercised
as to some or all of the shares covered by the tandem grant, the tandem Stock
Appreciation Right shall be canceled automatically to the extent of the number
of shares covered by the Stock Option exercised.
10. Restricted Stock Awards. Restricted Stock Awards shall
consist of one or more shares of Common Stock granted to an Eligible Individual,
and shall be subject to the terms and conditions established by the Committee in
connection with the Award and specified in the applicable Award Agreement. The
shares of Common Stock subject to a Restricted Stock Award may, among other
things, be subject to vesting requirements or restrictions on transferability.
Except as otherwise provided by the Committee in its sole discretion, a
Participant shall have all of the rights of a shareholder of the Company with
respect to the shares of Common Stock underlying a Restricted Stock Award,
including the right to vote the shares and the right to receive any cash
dividends. Stock dividends issued with respect to shares covered by a Restricted
Stock Award shall be treated as additional shares under the Restricted Stock
Award and shall be subject to the same terms and conditions that apply to the
shares with respect to which such dividends are issued. In no event shall the
number of shares of Common Stock granted in any calendar year under the Plan in
respect of Restricted Stock Awards exceed .5% of the outstanding shares of
Common Stock as of the first day of the calendar year. Notwithstanding the
foregoing, the number of shares of Common Stock available for Restricted Stock
Awards under the Plan during the 1998 calendar year shall not exceed 1.1 million
shares.
11. Restricted Stock Units. Restricted Stock Unit Awards shall
consist of a grant of units, each of which represents the right of the
Participant to receive one share of Common Stock, subject to the terms and
conditions established by the Committee in connection with the Award and set
forth in the applicable Award Agreement. Upon satisfaction of the conditions to
vesting and payment specified in the applicable Award Agreement, Restricted
Stock Units shall be payable, at the discretion of the Committee, in Common
Stock, in cash equal to the Fair Market Value of the shares subject to such
Restricted Stock Units, or in a combination of Common Stock and cash.
12. Performance Share Awards. Performance Share Awards shall
be evidenced by an Award Agreement in such form and containing such terms and
conditions as the Committee deems appropriate and which are not inconsistent
with the terms of the Plan. Each Award Agreement shall set forth the number of
shares of Common Stock to be earned by a Participant upon satisfaction of
certain specified performance criteria and subject to such other terms and
conditions as the Committee deems appropriate. Payment in settlement of a
Performance Share Award shall be made as soon as practicable following the
conclusion of the applicable performance period, or at such other time as the
Committee shall determine, in shares of Common
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Stock, in an equivalent amount of cash or in a combination of Common Stock and
cash, as the Committee shall determine.
13. Stock Awards. Stock Awards shall consist of one or more
shares of Common Stock granted to an Eligible Individual, and shall be subject
to the terms and conditions established by the Committee in connection with the
Award and specified in the applicable Award Agreement. The shares of Common
Stock subject to a Stock Award may, among other things, be subject to vesting
requirements and restrictions on transferability.
14. Other Awards. The Committee shall have the authority to
specify the terms and provisions of other forms of equity-based or
equity-related Awards not described above which the Committee determines to be
consistent with the purpose of the Plan and the interests of the Company, which
Awards may provide for cash payments based in whole or in part on the value or
future value of Common Stock, for the acquisition or future acquisition of
Common Stock, or any combination thereof.
15. Section 162(m) Awards.
(a) Terms of Section 162(m) Awards Generally. In addition to
any other Awards under the Plan, the Company may make Awards that are
intended to qualify as "qualified performance-based compensation" for
purposes of Section 162(m) of the Code ("Section 162(m) Awards").
Section 162(m) Awards may consist of Stock Options, Stock Appreciation
Rights, Restricted Stock Awards, Restricted Stock Units, Performance
Share Awards or Other Awards the vesting, exercisability and/or payment
of which is conditioned upon the attainment for the applicable
Performance Period of specified performance targets related to
designated performance goals for such period selected by the Committee
from among the performance goals specified in Section 15(b) below.
Section 162(m) Awards will be made in accordance with the procedures
specified in applicable Treasury regulations for compensation intended
to be "qualified performance-based compensation."
(b) Performance Goals. For purposes of this Section 15,
performance goals shall be limited to one or more of the following: (i)
net revenue; (ii) net earnings; (iii) operating earnings or income;
(iv) absolute and/or relative return on equity or assets; (v) earnings
per share; (vi) cash flow; (vii) pretax profits; (viii) earnings
growth; (ix) revenue growth; (x) book value per share; (xi) stock
price; (xii) economic value added; (xiii) total shareholder return;
(xiv) operating goals (including, but not limited to, safety,
reliability, maintenance expenses, capital expenses, customer
satisfaction and employee satisfaction); and (xv) performance relative
to peer companies, each of which may be established on a corporate-wide
basis or established with respect to one or more operating units,
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divisions, acquired businesses, minority investments, partnerships
or joint ventures.
(c) Other Performance-Based Compensation. The Committee's
decision to make, or not to make, Section 162(m) Awards within the
meaning of this Section 15 shall not in any way prejudice the
qualification of any other Awards as performance-based compensation
under Section 162(m). In particular, Awards of Stock Options may,
pursuant to applicable regulations promulgated under Section 162(m), be
qualified as performance-based compensation for Section 162(m) purposes
without regard to this Section 15.
16. Dividend Equivalents. The Committee may provide that
Awards under the Plan earn dividend equivalents. Such dividend equivalents may
be paid currently or may be deferred and deemed reinvested in Common Stock in
the same manner as dividends reinvested pursuant to the terms of the Sempra
Dividend Reinvestment Plan. Any deferral of dividend equivalents shall be
subject to such restrictions and conditions as the Committee may determine in
its discretion, including, but not limited to, performance-based vesting
requirements.
17. Non-transferability. No Award granted under the Plan or
any rights or interests therein shall be sold, transferred, assigned, pledged or
otherwise encumbered or disposed of except by will or by the laws of descent and
distribution or pursuant to a "qualified domestic relations order" ("QDRO") as
defined in the Code or Title I of the Employee Retirement Income Security Act of
1974, as amended, and the rules and regulations thereunder; provided, however,
that the Committee may, subject to such terms and conditions as the Committee
shall specify, permit the transfer of an Award to a Participant's family members
or to one or more trusts or partnerships established in whole or in part for the
benefit of one or more of such family members; provided further, however, that
the restrictions set forth in this sentence shall not apply to the shares
received in connection with an Award after the date that the restrictions on
transferability of such shares set forth in the applicable Award Agreement have
lapsed. During the lifetime of a Participant, a Stock Option or Stock
Appreciation Right shall be exercisable only by, and payments in settlement of
Awards shall be payable only to, the Participant or, if applicable, the
"alternate payee" under a QDRO or the family member or trust to whom such Stock
Option, Stock Appreciation Right or other Award has been transferred in
accordance with the previous sentence.
18. Recapitalization or Reorganization.
(a) Authority of the Company and Shareholders. The existence
of the Plan, the Award Agreements and the Awards granted hereunder
shall not affect or restrict in any way the right or power of the
Company or the shareholders of the Company to make or authorize any
adjustment, recapitalization, reorganization or other change in the
Company's capital structure or its business, any merger or
consolidation of the Company, any issue of stock or of options,
warrants or rights
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to purchase stock or of bonds, debentures, preferred or prior
preference stocks whose rights are superior to or affect the Common
Stock or the rights thereof or which are convertible into or
exchangeable for Common Stock, or the dissolution or liquidation of the
Company, or any sale or transfer of all or any part of its assets or
business, or any other corporate act or proceeding, whether of a
similar character or otherwise.
(b) Change in Capitalization. Notwithstanding any provision of
the Plan or any Award Agreement, in the event of any change in the
outstanding Common Stock by reason of a stock dividend,
recapitalization, reorganization, merger, consolidation, stock split,
combination or exchange of shares affecting the Common Stock, the
Committee shall make (i) such proportionate adjustments it considers
appropriate (in the form determined by the Committee in its sole
discretion) to prevent diminution or enlargement of the rights of
Participants under the Plan with respect to the aggregate number of
shares of Common Stock for which Awards in respect thereof may be
granted under the Plan, the number of shares of Common Stock covered by
each outstanding Award, and the exercise prices in respect thereof
and/or (ii) such other equitable adjustments as it deems appropriate in
the interests of the holders of Awards. The Committee's determination
as to what, if any, adjustments shall be made shall be final and
binding on the Company and all Participants.
19. Change in Control. In the event of a Change in Control (i)
all Stock Options or Stock Appreciation Rights then outstanding shall
automatically become fully vested and exercisable as of the date of the Change
in Control, (ii) all restrictions and conditions of all Restricted Stock Awards
then outstanding shall lapse as of the date of the Change in Control, and (iii)
all Performance Share Awards shall be deemed to have been earned out in a manner
set forth in the applicable Award Agreement. In addition to the foregoing, in
the case of a Change in Control involving a merger of, or consolidation
involving, the Company in which the Company is (A) not the surviving corporation
(the "Surviving Entity") or (B) becomes a wholly owned subsidiary of the
Surviving Entity or any Parent thereof, each outstanding Stock Option granted
under the Plan and not exercised (a "Predecessor Option") will be converted into
an option (a "Replacement Option") to acquire common stock of the Surviving
Entity or its Parent, which Replacement Option will have substantially the same
terms and conditions as the Predecessor Option, with appropriate adjustments as
to the number and kind of shares and exercise prices. Notwithstanding the
foregoing, in the event of a Change in Control, the Committee expressly reserves
the discretion to cancel all outstanding Stock Options, effective as of the date
of the Change in Control, in exchange for a cash payment to be made to each of
the Participants within five business days following the Change in Control in an
amount equal to the excess of the fair market value of the Company's Common
Stock on the date of the Change in Control over the exercise price of each such
Stock Option, multiplied by the number of shares that are subject to such
option. Notwithstanding the foregoing, in the event that the Company becomes a
party to a transaction that is intended to qualify for "pooling of interests"
accounting treatment and, but for
15
one or more of the provisions of this Plan or any Award Agreement would so
qualify, then this Plan and any Award Agreement shall be interpreted so as to
preserve such accounting treatment, and to the extent that any provision of the
Plan or any Award Agreement would disqualify the transaction from pooling of
interests accounting treatment (including, if applicable, an entire Award
Agreement), then such provision shall be null and void. All determinations to be
made in connection with the preceding sentence shall be made by the independent
accounting firm whose opinion with respect to "pooling of interests" treatment
is required as a condition to the Company's consummation of such transaction.
20. Amendment of the Plan. The Board or Committee may at any
time and from time to time terminate, modify, suspend or amend the Plan in whole
or in part; provided, however, that no such termination, modification,
suspension or amendment shall be effective without shareholder approval if such
approval is required to comply with any applicable law or stock exchange rule;
and provided further, that the Board or Committee may not, without shareholder
approval, increase the Section 5 Limit except as provided in Section 18(b)
above. No termination, modification, suspension or amendment of the Plan shall,
without the consent of a Participant to whom any Award shall previously have
been granted, adversely affect his or her rights under such Awards.
Notwithstanding any provision herein to the contrary, the Board or Committee
shall have broad authority to amend the Plan or any Award to take into account
changes in applicable tax laws, securities laws, accounting rules and other
applicable state and federal laws.
21. Miscellaneous.
(a) Tax Withholding. No later than the date as of which an
amount first becomes includable in the gross income of the Participant
for applicable income tax purposes with respect to any grant under the
Plan, the Participant shall pay to the Company or make arrangements
satisfactory to the Committee regarding the payment of any federal,
state or local taxes of any kind required by law to be withheld with
respect to such amount. Unless otherwise determined by the Committee,
in accordance with rules and procedures established by the Committee,
the minimum required withholding obligations may be settled with Common
Stock, including Common Stock that is part of the grant that gives rise
to the withholding requirement. The obligations of the Company under
the Plan shall be conditioned upon such payment or arrangements and the
Company shall, to the extent permitted by law, have the right to deduct
any such taxes from any payment of any kind otherwise due to the
Participant.
(b) No Right to Grants or Employment. No Eligible Individual
or Participant shall have any claim or right to receive grants of
Awards under the Plan. Nothing in the Plan or in any Award Agreement
shall confer upon any employee of the Company or any Subsidiary any
right to continued employment with the Company or any Subsidiary, as
the case may be, or interfere in any way
16
with the right of the Company or a Subsidiary to terminate the
employment of any of its employees at any time, with or without cause.
(c) Unfunded Plan. The Plan is intended to constitute an
unfunded plan for incentive compensation. With respect to any payments
not yet made to a Participant by the Company, nothing contained herein
shall give any such Participant any rights that are greater than those
of a general creditor of the Company. In its sole discretion, the
Committee may authorize the creation of trusts or other arrangements to
meet the obligations created under the Plan to deliver Common Stock or
payments in lieu thereof with respect to grants hereunder.
(d) Other Employee Benefit Plans. Amounts received by a
Participant with respect to any Award made pursuant to the provisions
of the Plan shall not be included in, nor have any effect on, the
determination of benefits under any other employee benefit plan or
similar arrangement provided by the Company.
(e) Securities Law Restrictions. The Committee may require
each Eligible Individual purchasing or acquiring shares of Common Stock
pursuant to a Stock Option or other Award under the Plan to represent
to and agree with the Company in writing that such Eligible Individual
is acquiring the shares for investment and not with a view to the
distribution thereof. All certificates for shares of Common Stock
delivered under the Plan shall be subject to such stock-transfer orders
and other restrictions as the Committee may deem advisable under the
rules, regulations, and other requirements of the Securities and
Exchange Commission or any exchange upon which the Common Stock is then
listed, and any applicable federal or state securities law, and the
Committee may cause a legend or legends to be put on any such
certificates to make appropriate reference to such restrictions. No
shares of Common Stock shall be issued hereunder unless the Company
shall have determined that such issuance is in compliance with, or
pursuant to an exemption from, all applicable federal and state
securities laws.
(f) Compliance with Rule 16b-3.
(i) The Plan is intended to comply with Rule 16b-3 under
the Exchange Act or its successor under the Exchange Act and
the Committee shall interpret and administer the provisions of
the Plan or any Award Agreement in a manner consistent
therewith. To the extent any provision of the Plan or Award
Agreement or any action by the Committee fails to so comply,
it shall be deemed null and void, to the extent permitted by
law and deemed advisable by the Committee. Moreover, in the
event the Plan or an Award Agreement does not include a
provision required by Rule 16b-3 to be stated therein, such
provision (other than one relating to eligibility
17
requirements, or the price and amount of Awards) shall be
deemed automatically to be incorporated by reference into the
Plan or such Award Agreement insofar as Participants subject
to Section 16 of the Exchange Act are concerned.
(ii) Notwithstanding anything contained in the Plan or
any Award Agreement to the contrary, if the consummation of
any transaction under the Plan would result in the possible
imposition of liability on a Participant pursuant to Section
16(b) of the Exchange Act, the Committee shall have the right,
in its sole discretion, but shall not be obligated, to defer
such transaction to the extent necessary to avoid such
liability.
(g) Award Agreement. In the event of any conflict or
inconsistency between the Plan and any Award Agreement, the Plan shall
govern, and the Award Agreement shall be interpreted to minimize or
eliminate any such conflict or inconsistency.
(h) Expenses. The costs and expenses of administering the Plan
shall be borne by the Company.
(i) Applicable Law. Except as to matters of federal law, the
Plan and all actions taken thereunder shall be governed by and
construed in accordance with the laws of the State of California
without giving effect to conflicts of law principles.
(j) Effective Date. The Plan shall be effective as of the
Effective Time of the business combination of Pacific Enterprises and
Enova Corporation, pursuant to which such corporations will become
subsidiaries of the Company (the "Effective Date"), subject to the
approval by the Company's shareholders of the Plan at or prior to the
first annual meeting of the Company's shareholders after the Effective
Date. If shareholder approval is not obtained at or prior to the first
annual meeting of the shareholders of the Company, the Plan and any
Awards granted thereunder shall terminate ab initio and be of no
further force and effect.
EXHIBIT 4.2
EXHIBIT 4.2
SEMPRA ENERGY
1998 NON-EMPLOYEE DIRECTORS' STOCK PLAN
SEMPRA ENERGY
1998 NON-EMPLOYEE DIRECTORS' STOCK PLAN
1. Purpose. The purposes of the Sempra Energy 1998 Non-
Employee Directors' Stock Plan (the "Plan") are (i) to retain the services of
qualified individuals who are not employees of SEMPRA ENERGY, a California
corporation (the "Company"), to serve as members of the Board and to secure for
the Company the benefits of the incentives inherent in increased Common Stock
ownership by such individuals by awarding such individuals Director Shares and
Options to purchase shares of Common Stock, and (ii) to provide such individuals
an opportunity to defer payment of all or a portion of their Director's Fees in
accordance with the terms and conditions set forth herein.
2. Definitions. For purposes of the Plan, the following terms
shall be defined as follows:
"Affiliate" and "Associate" have the respective meanings
ascribed to such terms in Rule 12b-2 promulgated under the Exchange
Act.
"Annual Meeting" means an annual meeting of the Company's
stockholders.
"Beneficiary" or "Beneficiaries" means an individual or entity
designated by a Non-Employee Director on a Beneficiary Designation Form
to receive Deferred Benefit payments in the event of the Non-Employee
Director's death.
"Beneficiary Designation Form" means a document, in a form
approved by the Board, to be used by Non-Employee Directors to name
their respective Beneficiaries.
"Board" means the Board of Directors of the Company.
A "Change in Control" of the Company shall be deemed to have
occurred when:
(i) Any Person is or becomes the Beneficial Owner,
directly or indirectly, of securities of the Company
representing twenty percent (20%) or more of the
combined voting power of the Company's then outstanding
securities; or
(ii) The following individuals cease for any reason to
constitute a majority of the number of directors then
serving: individuals who, on the Effective Date,
constitute the Board and any new director (other than a
director whose initial assumption of office is in
connection with an actual or threatened election
contest, including, but not limited to, a consent
solicitation, relating to the
2
election of directors of the Company) whose appointment
or election by the Board or nomination for election by
the Company's shareholders was approved or recommended
by a vote of at least two-thirds (2/3) of the directors
then still in office who either were directors on the
date hereof or whose appointment, election or nomination
for election was previously so approved or recommended;
or
(iii) There is consummated a merger or consolidation of
the Company or any direct or indirect subsidiary of the
Company with any other corporation, other than (A) a
merger or consolidation which would result in the voting
securities of the company outstanding immediately prior
to such merger or consolidation continuing to represent
(either by remaining outstanding or by being converted
into voting securities of the surviving entity or any
parent thereof), in combination with the ownership of
any trustee or other fiduciary holding securities under
an employee benefit plan of the Company or any
subsidiary of the Company, at least sixty percent (60%)
of the combined voting power of the securities of the
Company or such surviving entity or any parent thereof
outstanding immediately after such merger or
consolidation, or (B) a merger or consolidation effected
to implement a recapitalization of the Company (or
similar transaction) in which no Person is or becomes
the beneficial owner, directly or indirectly, of
securities of the Company (not including in the
securities beneficially owned by such Person any
securities acquired directly from the Company or its
affiliates other than in connection with the securities
acquired directly from the Company or its affiliates
other than in connection with the acquisition by the
Company or its affiliates of a business) representing
twenty percent (20%) or more of the combined voting
power of the Company's then outstanding securities; or
(iv) The shareholders of the Company approve a plan of
complete liquidation or dissolution of the Company or
there is consummated an agreement for the sale or
disposition by the company of all or substantially all
of the Company's assets, other than a sale or
disposition by the Company of all or substantially all
of the Company's assets to an entity, at least sixty
percent (60%) of the combined voting power of the voting
securities of which are owned by shareholders of the
Company in substantially
3
the same proportions as their ownership of the Company
immediately prior to such sale.
"Code" means the Internal Revenue Code of 1986, as amended,
and the applicable rulings and regulations thereunder.
"Common Stock" means the common stock, with no par value, of
the Company.
"Deferral Election" means the election of a Non-Employee
Director, made in accordance with the terms and conditions of the Plan,
to defer all or a specified percentage of his Director's Fees for a
Deferral Period.
"Deferral Election Form" means a document, in a form approved
by the Board, pursuant to which a Non-Employee Director makes a
Deferral Election.
"Deferral Period" means each period commencing on the date of
an Annual Meeting and ending on the date immediately preceding the next
Annual Meeting. The first Deferral Period under the Plan shall commence
on the date of the Annual Meeting first following the Effective Date.
If an individual becomes eligible to participate in the Plan after the
commencement of a Deferral Period, the Deferral Period for the
individual shall be the remainder of such Deferral Period.
"Deferred Benefit" means an amount that will be paid on a
deferred basis under the Plan to a Non-Employee Director who has made a
Deferral Election pursuant to Section 7.
"Deferred Compensation Account" means the bookkeeping account
established for each Non-Employee Director. A Deferred Compensation
Account is established only for purposes of measuring a Deferred
Benefit and not to segregate assets or to identify assets that may be
used to pay a Deferred Benefit.
"Director's Fees" means the cash portion of (i) any annual fee
payable to a Non-Employee Director for service on the Board and (ii)
any other fee determined on an annual basis and payable for service on,
or for acting as chairperson of, any committee of the Board.
"Director Shares" means shares of Common Stock granted to a
Non-Employee Director, which shall be subject to such terms and
conditions as are set forth in Section 6 below.
4
"Election Date" means the day that is 30 days prior to the
commencement of a Deferral Period.
"ERISA" means the Employee Retirement Income Security Act of
1974, as amended.
"Exchange Act" means the Securities Exchange Act of 1934, as
amended, and the applicable rulings and regulations thereunder.
"Fair Market Value" means, in the event that the Common Stock
is traded on a recognized securities exchange, the closing price of the
Common Stock on the date set for valuation, or in the event that the
Common Stock is quoted by the National Association of Securities
Dealers Automated Quotations on National Market Issues system, an
amount equal to the average of the high and low prices of the Common
Stock on such quotations system on the date set for valuation or, if no
sales of Common Stock were made on said exchange or so quoted on that
date, the average of the high and low prices of the Common Stock on the
next preceding day on which sales were made on such exchange or
quotations system; or, if the Common Stock is not so traded or quoted,
that value determined, in its sole discretion, by the Board.
"Non-Employee Director" means a member of the Board who is not
an employee of the Company.
"Option" means an option to purchase shares of Common Stock
awarded to a Non-Employee Director pursuant to the Plan, which option
shall not be intended to qualify, and shall not be treated, as an
"incentive stock option" within the meaning of Section 422 of the Code.
"Parent" means any corporation which is a "parent corporation"
within the meaning of Section 424 of the Code with respect to the
relevant entity.
"Person" means any person, entity, or "group" within the
meaning of Section 13(d)(3) or Section 14(d)(2) of the Exchange Act,
except that such term shall not include (i) the Company or any of its
subsidiaries, (ii) a trustee or other fiduciary holding securities
under an employee benefit plan of the Company or any of its Affiliates,
(iii) an underwriter temporarily holding securities pursuant to an
offering of such securities, (iv) a corporation owned, directly or
indirectly, by the shareholders of the Company in substantially the
same proportions as their ownership of stock of the Company, or (v) a
person or group as used in Rule 13d-1(b) under the Exchange Act.
5
"Phantom Stock Unit" means a bookkeeping unit representing one
share of Common Stock.
"Retirement" means a Non-Employee Director ceasing to be a
member of the Board as a result of retirement from the Board in
accordance with the retirement policy then applicable to Board members
from time to time.
3. Administration. The entire Board will be responsible for
administering the Plan, provided, however, that the Board may delegate its
administrative authority to a committee or to one or more officers of the
Company at any time in its sole discretion. The Board will have authority to
adopt such rules as it may deem appropriate to carry out the purposes of the
Plan, and shall have authority to interpret and construe the provisions of the
Plan and any agreements and notices under the Plan and to make determinations
pursuant to any Plan provision. Each interpretation, determination or other
action made or taken by the Board pursuant to the Plan shall be final and
binding on all persons. No member of the Board shall be liable for anything
whatsoever in connection with the administration of the Plan except such
person's own willful misconduct. In the performance of its functions with
respect to the Plan, the Board shall be entitled to rely upon information and
advice furnished by the Company's officers, the Company's accountants, the
Company's counsel and any other party the Board deems necessary, and no member
of the Board shall be liable for any action taken or not taken in reliance upon
any such advice.
4. Shares Available. Subject to the provisions of Section 8 of
the Plan, the maximum number of shares of Common Stock which may be issued under
the Plan shall not exceed 1.5 million shares (the "Section 4 Limit"). Either
authorized and unissued shares of Common Stock or treasury shares may be
delivered pursuant to the Plan. For purposes of determining the number of shares
that remain available for issuance under the Plan, the following rules shall
apply:
(a) the number of shares subject to awards granted under the
Plan shall be charged against the Section 4 Limit; and
(b) the Section 4 Limit shall be increased by:
(i) the number of shares subject to an Option that
lapses, expires or is otherwise terminated without the
issuance of the underlying shares;
(ii) the number of Phantom Stock Units settled by the
delivery of consideration other than shares;
(iii) the number of shares tendered to pay the exercise
price of an Option; and
6
(iv) the number of shares withheld to satisfy any tax
withholding obligations of a Non-Employee Director with
respect to any shares or other payments hereunder.
5. Options. Each Non-Employee Director shall receive grants
of Options under the Plan as follows:
(a) Option Grants.
(i) Initial Award. On either (A) the tenth business day
after the consummation of the combination of Enova Corporation
and Pacific Enterprises to form the Company, for the Company's
initial Board or (B) for all other Non-Employee Directors, at
the Annual Meeting coincident with or first succeeding a
Non-Employee Director's election to the Board (other than
reelection for a successive term), such Non-Employee Director
(including any Non-Employee Director who is reelected after a
period during which he did not serve on the Board) shall
receive a grant of an Option to purchase 15,000 shares of
Common Stock. Such Option shall have a per share exercise
price equal to the Fair Market Value of the Common Stock on
the date of grant and shall be subject to the vesting schedule
provided for in Section 5(b) and the other terms and
conditions provided for herein.
(ii) Annual Awards. At each Annual Meeting other than
the Annual Meeting coincident with or first succeeding a
Non-Employee Director's initial election to the Board (or
reelection after a period during which he or she did not serve
on the Board), each Non-Employee Director shall receive as of
such date a grant of an Option to purchase 5,000 shares of
Common Stock. Such Option shall have a per share exercise
price equal to the Fair Market Value of the Common Stock on
the date of grant and shall be subject to the vesting schedule
provided for in Section 5(b) and the other terms and
conditions provided for herein.
(b) Vesting Schedule of Options. Options awarded pursuant to
the Plan shall vest and become exercisable on the date of the first
Annual Meeting following the date of grant; provided, however, that an
Option shall become fully vested and exercisable upon a Non-Employee
Director ceasing to be a member of the Board as a result of death,
Disability, Retirement or in the event of his involuntary termination
of service on the Board other than for cause.
(c) Exercise of Options Following Termination of Service. If a
Non- Employee Director ceases to be a member of the Board for any
reason, then (A) the Non-Employee Director shall have the right,
subject to the terms and
7
conditions hereof, to exercise the Option, to the extent it has vested
as of the date of such termination of service, at any time within one
year after the date of such termination, and (B) the unvested portion
of any Options awarded to the Non-Employee Director shall be forfeited
as of the date of termination of service.
(d) Method of Exercise. The exercise price of an Option may be
paid in cash or previously owned shares or a combination thereof and in
whole or in part through the withholding of shares subject to the
Option with a Fair Market Value equal to the exercise price. In
accordance with the rules and procedures established by the Board for
this purpose, an Option may also be exercised through a "cashless
exercise" procedure approved by the Board involving a broker or dealer
approved by the Board, that affords Non-Employee Directors the
opportunity to sell immediately some or all of the shares underlying
the exercised portion of the Option in order to generate sufficient
cash to pay the Option exercise price and/or to satisfy withholding tax
obligations related to the Option.
(e) Restrictions on Transfer. An Option may not be
transferred, pledged, assigned, or otherwise disposed of, except by
will or by the laws of descent and distribution or pursuant to a
"qualified domestic relations order" as defined in the Code or Title I
of ERISA (a "QDRO"); provided, however, that the Board may, subject to
such terms and conditions as the Board shall specify, permit the
transfer of an Option to a Non-Employee Director's family members or to
one or more trusts established in whole or in part for the benefit of
one or more of such family members. The Option shall be exercisable,
during the Non-Employee Director's lifetime, only by the Non-Employee
Director or by the person to whom the Option has been transferred in
accordance with the previous sentence.
6. Director Shares. A Non-Employee Director may elect to
receive all or a specified percentage of his or her Director's Fees for each
year of service on the Board in Director Shares, in lieu of cash compensation
for such portion thereof, rounded up or down to the next whole share in the
event of fractional amounts. The number of Director Shares to be received by
each Non-Employee Director shall be determined by dividing the portion of such
Non-Employee Director's Director's Fees to be paid in Director Shares by the
Fair Market Value of a share of Common Stock on the date such compensation would
otherwise have been paid in cash. The Non-Employee Director shall have all the
rights and privileges of a stockholder as to such shares, including the right to
receive dividends and the right to vote such shares. The Director Shares shall
be immediately vested upon grant, shall not be forfeitable to the Company and
shall not be subject to any restrictions on transfer (other than those imposed
under applicable law or under any trading policy of the Company).
8
7. Deferral of Director's Fees.
(a) Deferral Elections.
(i) General Provisions. A Non-Employee Director may
elect to defer all or a specified percentage of his or her
Director's Fees with respect to a Deferral Period in the
manner provided in this Section 7; provided, however, that a
Non-Employee Director may not elect to defer any Director's
Fees which the Non-Employee Director will receive in Director
Shares in accordance with Section 6 above. A Non-Employee
Director's Deferred Benefit is at all times nonforfeitable.
The deferral provisions set forth in this Section 7 shall be
non-exclusive and shall not be construed to prevent a
Non-Employee Director from deferring Director's Fees under
another applicable plan or program of the Company.
(ii) Deferral Election Forms. Before the Election Date
applicable to a Deferral Period, each Non-Employee Director
will be provided with a Deferral Election Form and a
Beneficiary Designation Form. In order for a Non-Employee
Director to participate in the Plan for a given Deferral
Period, a Deferral Election Form, completed and signed by him,
must be delivered to the Company on or prior to the applicable
Election Date. A Non-Employee Director electing to participate
in the Plan for a given Deferral Period shall indicate on his
Deferral Election Form:
(A) the percentage of the Director's Fees for the
applicable Deferral Period to be deferred; and
(B) the Non-Employee Director's election either to
have distribution of his Deferred Benefit commence
following termination of service as a Non-Employee
Director or to have such distribution commence as of a
date specified by him on such Form, provided, however,
that any such election concerning the commencement of
distribution of a Non-Employee Director's Deferred
Benefit shall be subject to the terms and conditions of
Section 7(e); and provided further, however, that in no
event may a Non-Employee Director elect to defer any
Director's Fees for a period that is less than two
years.
(iii) Revocation of Deferral Election. A Non-Employee
Director may revoke a Deferral Election applicable to a
Deferral Period; provided, that in order to be effective, a
revocation must be in writing
9
and signed by the Non-Employee Director, must express the
Non-Employee Director's intention to revoke his Deferral
Election applicable to that Deferral Period, and must be
delivered to the Company before the close of business on the
Election Date applicable to such Deferral Period.
(b) Establishment of Deferred Compensation Accounts. A
Non-Employee Director's deferrals will be credited to a Deferred
Compensation Account established for that Non-Employee Director. As of
the last business day of each calendar quarter, a Non-Employee
Director's Deferred Compensation Account will be credited with a number
of Phantom Stock Units (including fractions of Phantom Stock Units)
determined by dividing (1) the amount of the Director's Fees deferred
over such quarter by (2) the average closing price of a share of Common
Stock over the applicable calendar quarter. The crediting of Phantom
Stock Units to a Non-Employee Director's Deferred Compensation Account
shall not confer on the Non-Employee Director any rights as a
stockholder of the Company.
(c) Dividend Equivalents on Phantom Stock Deferrals. Each
Phantom Stock Unit credited to the Deferred Compensation Account of a
Non-Employee Director will be credited with an additional number of
Phantom Stock Units (including fractions thereof) as dividend
equivalents, determined by dividing (A) the amount of cash, or the
value (as determined by the Board) of any securities or other property,
paid or distributed as dividends in respect of one outstanding share of
Common Stock by (B) the Fair Market Value of a share of Common Stock
for the date of such payment or distribution. Such credit shall be made
effective as of the date of the dividend or other distribution in
respect of the Common Stock.
(d) Manner of Payment of Deferred Benefit. Payments of
Deferred Benefits under the Plan will be in cash or shares of Common
Stock, or a combination thereof, as the Board in its sole discretion
shall determine. To the extent that cash payments are made hereunder,
they shall be based on the Fair Market Value of the Common Stock on the
day preceding the day on which the payment is due. The Company shall
pay a Non-Employee Director's Deferred Benefit either in a single lump
sum or in a series of installments, as the Board in its sole discretion
shall determine, provided, however, that if the Board elects to pay a
Non-Employee Director's Deferred Benefit in a series of installments,
such installments shall be paid no more frequently than quarterly and
the Deferred Benefit must be distributed over a period not exceeding
five years. The unpaid portion of a Non-Employee Director's Deferred
Benefit shall continue to be credited with dividend equivalents as
provided in Section 7(c) until it is fully paid.
10
(e) Commencement of Payment of Deferred Benefit. Except as
provided in Section 7(f), a Non-Employee Director's Deferred Benefit
shall be paid (if payable in a lump sum), or commence to be paid (if
payable in a series of installments), to the Non-Employee Director as
soon as practicable (but in no event more than 90 days) after the
earliest to occur of: (i) termination of service as a Non-Employee
Director; (ii) the date specified in the Deferral Election Form
executed by the Non-Employee Director; or (iii) the Non-Employee
Director's death.
(f) Designation of Beneficiary. Each Non-Employee Director may
designate a Beneficiary to receive any Deferred Benefit due under the
Plan upon the Non-Employee Director's death by executing a Beneficiary
Designation Form. A Beneficiary designation is not binding on the
Company until the Company receives the Beneficiary Designation Form. If
no designation is made or no designated Beneficiary is alive (or in the
case of an entity designated as a Beneficiary, in existence) at the
time of the Non-Employee Director's death, payments due under the Plan
will be made to the Non-Employee Director's estate.
(g) Restrictions on Transfer. The Company shall pay all
Deferred Benefits payable under the Plan only to the Non-Employee
Director or Beneficiary designated under the Plan to receive such
amounts. Neither a Non-Employee Director nor his Beneficiary shall have
any right to anticipate, alienate, sell, transfer, assign, pledge,
encumber or change any benefits to which he may become entitled under
the Plan, and any attempt to do so shall be void. A Deferred Benefit
shall not be subject to attachment, execution by levy, garnishment, or
other legal or equitable process for a Non-Employee Director's or
Beneficiary's debts or other obligations.
8. Recapitalization or Reorganization.
(a) Authority of the Company and Shareholders. The existence
of the Plan shall not affect or restrict in any way the right or power
of the Company or the shareholders of the Company to make or authorize
any adjustment, recapitalization, reorganization or other change in the
Company's capital structure or its business, any merger or
consolidation of the Company, any issue of stock or of options,
warrants or rights to purchase stock or of bonds, debentures, preferred
or prior preference stocks whose rights are superior to or affect the
Common Stock or the rights thereof or which are convertible into or
exchangeable for Common Stock, or the dissolution or liquidation of the
Company, or any sale or transfer of all or any part of its assets or
business, or any other corporate act or proceeding, whether of a
similar character or otherwise.
11
(b) Change in Capitalization. Notwithstanding any other
provision of the Plan, in the event of any change in the outstanding
Common Stock by reason of a stock dividend, recapitalization,
reorganization, merger, consolidation, stock split, combination or
exchange of shares or any other significant corporate event affecting
the Common Stock, the Board, in its discretion, may make (i) such
proportionate adjustments as it considers appropriate (in the form
determined by the Board in its sole discretion) to prevent diminution
or enlargement of the rights of Non-Employee Directors under the Plan
with respect to the aggregate number of shares of Common Stock
authorized to be awarded under the Plan, the number of shares of Common
Stock covered by each outstanding Option and the exercise prices in
respect thereof, the number of shares of Common Stock covered by future
Option awards and the number of Phantom Stock Units credited to a
Non-Employee Director's Deferred Compensation Account and/or (ii) such
other adjustments as it deems appropriate. The Board's determination as
to what, if any, adjustments shall be made shall be final and binding
on the Company and all Non-Employee Directors.
9. Change in Control. In the event of a Change in Control (i)
all Options then outstanding shall automatically become fully vested and
exercisable as of the date of the Change in Control and (ii) all Deferred
Benefits shall be paid out in a cash lump sum within five business days of the
Change in Control. In the case of a Change in Control involving a merger of, or
consolidation involving, the Company in which the Company is (A) not the
surviving corporation (the "Surviving Entity") or (B) becomes a wholly owned
subsidiary of the Surviving Entity or any Parent thereof, each outstanding
Option granted under the Plan and not exercised (a "Predecessor Option") will be
converted into an option (a "Replacement Option") to acquire common stock of the
Surviving Entity or its Parent, which Replacement Option will have substantially
the same terms and conditions as the Predecessor Option, with appropriate
adjustments as to the number and kind of shares and exercise prices.
Notwithstanding the foregoing, in the event of a Change in Control, the Board
expressly reserves the discretion to cancel all outstanding Stock Options,
effective as of the date of the Change in Control, in exchange for a cash
payment to be made to each of the Non-Employee Directors within five business
days following the Change in Control in an amount equal to the excess of the
fair market value of the Company's Common Stock on the date of the Change in
Control over the exercise price of each such Option, multiplied by the number of
shares that are subject to such option. Notwithstanding the foregoing, in the
event that the Company becomes a party to a transaction that is intended to
qualify for "pooling of interests" accounting treatment and, but for one or more
of the provisions of this Plan would so qualify, then this Plan shall be
interpreted so as to preserve such accounting treatment, and to the extent that
any provision of the Plan would disqualify the transaction from pooling of
interests accounting treatment then such provision shall be null and void. All
determinations to be made in connection with the preceding sentence shall be
made by the independent accounting firm whose opinion with respect to "pooling
of
12
interests" treatment is required as a condition to the Company's consummation
of such transaction.
10. Termination and Amendment of the Plan.
(a) Termination. The Plan shall terminate as of the tenth
anniversary of the Effective Date (as defined in Section 11(i)).
Following the tenth anniversary of the Effective Date, no further
awards of Director Shares or Options shall be granted pursuant to the
Plan and no additional Director's Fees may be deferred by a
Non-Employee Director into his or her Deferred Compensation Account.
(b) General Power of Board. Notwithstanding anything herein to
the contrary, the Board may at any time and from time to time
terminate, modify, suspend or amend the Plan in whole or in part;
provided, however, that no such termination, modification, suspension
or amendment shall be effective without shareholder approval if such
approval is required to comply with any applicable law or stock
exchange rule; and provided further, that the Board may not, without
shareholder approval, increase the Section 4 Limit except as provided
in Section 8(b) above.
(c) When Non-Employee Directors' Consents Required. The Board
may not alter, amend, suspend, or terminate the Plan without the
consent of any Non-Employee Director to the extent that such action
would (i) adversely affect his or her rights with respect to Director
Shares or Options that have previously been granted or (ii) result in
the distribution to such Non-Employee Director of amounts then credited
to his Deferred Compensation Account in any manner other than as
provided in the Plan or could reasonably be expected to result in the
immediate taxation to such Non-Employee Director of Deferred Benefits.
11. Miscellaneous.
(a) Tax Withholding. The obligations of the Company under the
Plan shall be conditioned upon the Company's right, to the extent
permitted by law, to deduct all applicable taxes, if any, from any
payment of any kind otherwise due to the Non-Employee Director.
(b) No Right to Grants or Reelection. No Non-Employee Director
shall have any claim or right to receive any grants or awards under the
Plan. Nothing in the Plan shall be deemed to create any obligation on
the part of the Board to nominate any of its members for reelection by
the Company's stockholders, nor confer upon any Non-Employee Director
the right to remain a
13
member of the Board for any period of time, or at any particular rate
of compensation.
(c) Unfunded Plan.
(i) Generally. This Plan is unfunded. Amounts payable
under the Plan will be satisfied solely out of the general
assets of the Company subject to the claims of the Company's
creditors.
(ii) Deferred Benefits. A Deferred Benefit represents at
all times an unfunded and unsecured contractual obligation of
the Company and each Non-Employee Director or Beneficiary will
be an unsecured creditor of the Company. No Non-Employee
Director, Beneficiary or any other Person shall have any
interest in any fund or in any specific asset of the Company
by reason of any amount credited to him hereunder, nor shall
any Non-Employee Director, Beneficiary or any other Person
have any right to receive any distribution under the Plan
except as, and to the extent, expressly provided in the Plan.
The Company will not segregate any funds or assets for
Deferred Benefits or issue any notes or security for the
payment of any Deferred Benefits. Any reserve or other asset
that the Company may establish or acquire to assure itself of
the funds to provide benefits under the Plan shall not serve
in any way as security to any Non-Employee Director,
Beneficiary or other Person for the performance of the Company
under the Plan.
(d) Other Compensation Arrangements. Payments received by a
Non-Employee Director under any award made pursuant to the provisions
of the Plan shall not be included in, nor have any effect on, the
determination of benefits under any other arrangement provided by the
Company.
(e) Securities Law Restrictions. The Board may require each
Non-Employee Director purchasing or acquiring shares of Common Stock
pursuant to the Plan to and agree with the Company in writing that such
Non-Employee Director is acquiring the shares for investment and not
with a view to the distribution thereof. All certificates for shares of
Common Stock delivered under the Plan shall be subject to such
stock-transfer orders and other restrictions as the Board may deem
advisable under the rules, regulations, and other requirements of the
Securities and Exchange Commission or any exchange upon which the
Common Stock is then listed, and any applicable federal or state
securities law, and the Board may cause a legend or legends to be put
on any such certificates to make appropriate reference to such
restrictions. No shares of Common Stock shall be issued hereunder
unless the Company shall have determined that such
14
issuance is in compliance with, or pursuant to an exemption from,
all applicable federal and state securities laws.
(f) Compliance with Rule 16b-3.
(i) The Plan is intended to comply with Rule 16b-3 under
the Exchange Act or its successor under the Exchange Act and
the Board shall interpret and administer the provisions of the
Plan in a manner consistent therewith. To the extent any
provision of the Plan or any action by the Board fails to so
comply, it shall be deemed null and void, to the extent
permitted by law and deemed advisable by the Board. Moreover,
in the event the Plan does not include a provision required by
Rule 16b-3 to be stated therein, such provision (other than
one relating to eligibility requirements, or the price and
amount of Options) shall be deemed automatically to be
incorporated by reference into the Plan.
(ii) Notwithstanding anything contained in the Plan to
the contrary, if the consummation of any transaction under the
Plan would result in the possible imposition of liability on a
Non-Employee Director pursuant to Section 16(b) of the
Exchange Act, the Board shall have the right, in its sole
discretion, but shall not be obligated, to defer such
transaction to the extent necessary to avoid such liability.
(g) Expenses. The costs and expenses of administering the Plan
shall be borne by the Company.
(h) Applicable Law. Except as to matters of federal law, the
Plan and all actions taken thereunder shall be governed by and
construed in accordance with the laws of the State of California
without giving effect to conflicts of law principles.
(i) Effective Date. The Plan shall be effective as of the
Effective Time of the business combination of Pacific Enterprises and
Enova Corporation, pursuant to which such corporations will become
subsidiaries of the Company (the "Effective Date"), subject to the
approval by the Company's shareholders of the Plan at or prior to the
first Annual Meeting after the Effective Date. If shareholder approval
is not obtained at or prior to the first Annual Meeting, the Plan and
any awards thereunder shall terminate ab initio and be of no further
force and effect.
EXHIBIT 4.3
EXHIBIT 4.3
ENOVA CORPORATION
1986 LONG-TERM INCENTIVE PLAN
(amended and restated as the
Sempra Energy 1986 Long-Term Incentive Plan)
1. Purpose of the Plan. The purpose of the Sempra Energy 1986
Long-Term Incentive Plan is to promote the interests of Sempra Energy and its
shareholders by encouraging officers and key employees to acquire stock or
increase their proprietary interest in the Company. By thus providing the
opportunity to acquire Company stock and receive incentive payments, the Company
seeks to attract and retain such key employees upon whose judgment, initiative,
and leadership the success of the Company largely depends.
This amended and restated Plan (a) permits the grant of
incentive stock options as defined in section 422 of the Internal Revenue Code
of 1986, as amended (the "Code"), as well as options that are not incentive
stock options and other awards; (b) extends the term of the Plan; (c) adds
provisions for the grant of Common Stock to non-employee directors; (d) adds an
individual grant limitation required by section 162(m) of the Code for award
income for certain individuals to be tax deductible by the Company; and (e)
makes certain additional changes.
2. Definitions. Whenever the following terms are used in this
Plan, they will have the meanings specified below unless the context clearly
indicates the contrary.
(a) "Board of Directors" or "Board" means the Board of
Directors of Sempra Energy.
(b) Prior to the completion of the business combination of
Pacific Enterprises and Enova Corporation in which the two corporations became
subsidiaries of the Company (the "Effective Time"), "Change-in-Control" meant
(1) the dissolution or liquidation of the Company, (2) a reorganization, merger,
or consolidation of the Company with one or more corporations as a result of
which the Company is not the surviving corporation, (3) the acquisition of
beneficial ownership, directly or indirectly, of more than 25% of the voting
power of the outstanding stock of the Company by one person, group, association,
corporation, or other entity, (the group) coupled with the election to the Board
of Directors of new members who were not originally nominated by the Board at
the last annual meeting and who constitute a new majority of the Board or (4)
upon the sale of all or substantially all the property of the Company. The term
Change-in-Control shall not apply to any reorganization or merger initiated
voluntarily by the Company in which the Company is the surviving entity.
2
From and after the Effective Time, "Change-in-Control" means
the occurrence of any of the following:
(i) Any person is or becomes the beneficial owner,
directly or indirectly, of securities of the Company
representing twenty percent or more of the combined voting
power of the Company's then outstanding securities; or
(ii) The following individuals cease for any reason to
constitute a majority of the number of directors then serving:
individuals who, on the date hereof, constitute the Board and
any new director (other than a director whose initial
assumption of office is in connection with an actual or
threatened election contest, including but not limited to a
consent solicitation, relating to the election of directors of
the Company) whose appointment or election by the Board or
nomination for election by Sempra's shareholders was approved
or recommended by a vote of at least two-thirds of the
directors then still in office who either were directors on
the date hereof or whose appointment, election or nomination
for election was previously so approved or recommended; or
(iii) There is consummated a merger or consolidation of
the Company or any direct or indirect subsidiary of the
Company with any other corporation, other than (A) a merger or
consolidation which would result in the voting securities of
the Company outstanding immediately prior to such merger or
consolidation continuing to represent (either by remaining
outstanding or by being converted into voting securities of
the surviving entity or any parent thereof), in combination
with the ownership of any trustee or other fiduciary holding
securities under an employee benefit plan of the Company or
any subsidiary of the Company, at least sixty percent of the
combined voting power of the securities of the Company or such
surviving entity or any parent thereof outstanding immediately
after such merger or consolidation, or (B) a merger or
consolidation effected to implement a recapitalization of the
Company (or similar transaction) in which no person is or
becomes the beneficial owner, directly or indirectly, of
securities of the Company (not including in the securities
beneficially owned by such person any securities acquired
directly from the Company or its affiliates other than in
connection with the acquisitions by the Company or its
affiliates of a business) representing twenty percent or more
of the combined voting power of the Company's then outstanding
securities; or
3
(iv) The shareholders of the Company approve a plan of
complete liquidation or dissolution of the Company or there is
consummated an agreement for the sale or disposition by the
Company of all or substantially all of the Company's assets,
other than a sale or disposition by the Company of all or
substantially all of the Company's assets to an entity, at
least sixty percent (60%) of the combined voting power of the
voting securities of which are owned by shareholders of the
Company in substantially the same proportions as their
ownership of the Company immediately prior to such sale.
(c) "Committee" means the committee appointed to administer
the Plan pursuant to Section 4.
(d) "Company" means Sempra Energy and its subsidiaries.
(e) "Common Shares" or "Common Stock" means the common shares
of Sempra Energy and any class of common shares into which such common shares
may hereafter be converted.
(f) "Dividend Equivalent" means the additional amount of
Common Stock issued in connection with an option, as described in Section 14.
(g) "Eligible Person" means an Employee eligible to receive an
Incentive Award.
(h) "Employee" means any regular full-time common-law employee
of the Company, or of any of its present or future subsidiary corporations, as
defined in section 424(f) of the Code.
(i) "Fair Market Value" means the mean of the high and low
sale prices reported for the Common Stock on the New York Stock Exchange for the
five (5) trading days immediately preceding the date as of which such
determination is made.
(j) "Good Reason" means termination of employment by the
Officer when one or more of the following occurs without the Officer's express
written consent within three years after a change of control:
(i) an adverse and significant change in the Holder's
position, duties, responsibilities or status with the Company,
or a change in business location to a point outside the
Company's service territory, except in connection with the
termination of employment by the Company for Cause or
Disability, or as a result of Voluntary Retirement at or after
either the Holder's early (f.i.) or Normal Retirement Date
(f.ii.) or death, or for other than for Good Reason;
4
(ii) a reduction by the Company in base salary or
incentive compensation opportunity;
(iii) the taking of any action by the Company to
eliminate benefit plans without providing substitutes
therefore, to reduce benefits thereunder or to substantially
diminish the aggregate value of incentive awards or other
fringe benefits including insurance and an automobile provided
in accordance with the Company's standard policy; or
(iv) a failure by the Company to obtain from any
successor, before the succession takes place, an agreement to
assume and perform this Plan.
(k) "Holder" means a person holding an Incentive Award.
(l) "Incentive Award" means any Nonqualified Stock Option,
Incentive Stock Option, Common Stock, Restricted Stock, Stock Appreciation
Right, Dividend Equivalent, Stock Payment or Performance Award granted under the
Plan.
(m) "Incentive Stock Option" means an option as defined under
section 422 of the Code, including an Incentive Stock Option granted pursuant to
Section 8 of the Plan.
(n) "Nonqualified Stock Option" means an option other than an
Incentive Stock Option granted pursuant to Section 7 of the Plan.
(o) "Option" means either a Nonqualified Stock Option or
Incentive Stock Option.
(p) "Outside Director" shall mean a member of the Board of
Directors who is not an Employee.
(q) "Plan" means the 1986 Long-Term Incentive Plan as amended
and restated herein, which may be amended from time to time.
(r) "Restricted Stock" means Company stock sold or granted to
an eligible person, which is nontransferable and subject to substantial risk of
forfeiture until restrictions lapse.
(s) "Stock Appreciation Right" or "Right" means a right
granted pursuant to Section 11 of the Plan to receive a number of shares of
Common Stock or, in the discretion of the Committee, an amount of cash or a
combination of share and cash, based on the increase in the Fair Market Value or
book value of the shares subject to the right.
(t) "Performance Award" means an award whose value may be
linked to stock value, book value, or other specific performance criteria which
may be set by the Board of Directors, but which is paid in cash, stock, or a
combination of both.
5
(u) "Stock Payment" means a payment in shares of the Common
Stock to replace all or any portion of the compensation (other than base salary)
that would otherwise become payable to an Employee in cash.
3. Shares of Common Stock Subject to the Plan.
(a) Subject to the provisions of Section 3(c) and Section 15
of the Plan, the aggregate number of shares of Common Stock that may be issued
or transferred pursuant to Incentive Awards or covered by Stock Appreciation
Rights unrelated to Options under the Plan will not exceed 2,700,000.
(b) The shares to be delivered under the Plan will be made
available, at the discretion of the Board of Directors or the Committee, either
from authorized but unissued shares of Common Stock or from previously issued
shares of Common Stock reacquired by the Company, including shares purchased on
the open market.
(c) If Incentive Awards are forfeited or if Incentive Awards
terminate for any other reason before being exercised, then such Incentive
Awards shall again become available for award under the Plan. If Stock
Appreciation Rights are exercised, then only the number of Common Shares (if
any) actually issued in settlement of such Stock Appreciation Rights shall
reduce the number of Common Shares available under Section 3(a) and the balance
shall again become available for award under the Plan. If Restricted Stock is
forfeited before any dividends have been paid with respect to such Restricted
Stock, then such Restricted Stock shall again become available for award under
the Plan.
4. Administration of the Plan.
(a) The Plan shall be administered by the Committee. The
Committee shall consist of two or more disinterested directors of the Company,
who shall be appointed by the Board. A member of the Board shall be deemed to be
"disinterested" only if he or she satisfies such requirements as the Securities
and Exchange Commission may establish for disinterested administrators acting
under plans intended to qualify for exemption under Rule 16b- 3 under the
Securities Exchange Act of 1934 (or any other comparable provisions in effect at
the time or times in question). An Outside Director shall not fail to be
"disinterested" solely because he or she receives the grants of Common Stock
described in Section 6. The Board may also appoint one or more separate
committees of the Board, each composed of two or more directors of the Company
who need not be disinterested, who may administer the Plan with respect to
Employees who are not officers or directors of the Company, may grant Incentive
Awards under the Plan to such Employees and may determine all terms of such
Awards. Unless and until the Board of Directors appoints other members, and
subject to the requirement that they be "disinterested," the members of the
Committee shall be the members of the Executive Compensation Committee of the
Board of Directors, as such Executive Compensation Committee may be constituted
from time to time.
6
(b) The Committee has and may exercise such powers and
authority as may be necessary or appropriate for the Committee to carry out its
functions as described in the Plan. The Committee has authority in its
discretion to determine the Eligible Persons to whom, and the time or times at
which, Incentive Awards may be granted and the number of shares or Rights
subject to each award. Subject to the express provisions of the Plan, the
Committee also has authority to interpret the Plan, and to determine the terms
and provisions of the respective Incentive Award agreements (which need not be
identical) and to make all other determinations necessary or advisable for Plan
administration. The Committee has authority to prescribe, amend, and rescind
rules and regulations relating to the Plan. All interpretations, determinations,
and actions by the Committee will be final, conclusive, and binding upon all
parties.
(c) No member of the Board of Directors or the Committee will
be liable for any action or determination made in good faith by the Committee
with respect to the Plan or any Incentive and Performance Award under it.
5. Eligibility and Date of Grant.
(a) The Committee has authority, in its sole discretion, to
determine and designate from time to time those Eligible Persons who are to be
granted Incentive Awards, the type of Incentive Awards to be granted, and the
number of Rights, shares of Common Stock, or the amount of cash subject to each
Incentive Award. Each Incentive Award will be evidenced by a written instrument
and may include any other terms and conditions consistent with the Plan, as the
Committee may determine.
(b) The date of grant of an Incentive Award will be the date
the Committee takes the necessary action to approve the grant; provided,
however, that if the minutes or appropriate resolutions of the Committee provide
that an Incentive Award is to be granted as of a date in the future, the date of
grant will be such future date.
(c) Any other provisions of the Plan notwithstanding, the
participation of Outside Directors in the Plan shall be limited such that
Outside Directors shall receive no Incentive Awards other than the Common Stock
granted pursuant to Section 6 hereof.
6. Outside Director Participation. Upon the conclusion of each
regular annual meeting of the Company's shareholders, each incumbent Outside
Director who will continue serving as a member of the Board thereafter shall
receive a grant of 300 Common Shares (subject to adjustment under Section 15 and
prorated for partial year service) in consideration of past service as a member
of the Board and without additional payment for such Common Shares.
7. Nonqualified Stock Options. The Committee may approve the
grant of Nonqualified Stock Options to Eligible Persons, subject to the
following terms and conditions:
7
(a) The purchase price of Common Stock under each Nonqualified
Stock Option may not be less than one hundred percent (100%) of the Fair Market
Value of the Common Stock on the date the Nonqualified Stock Option is granted.
(b) No Nonqualified Stock Option may be exercised after ten
(10) years and one day from the date of grant.
(c) No fractional shares will be issued pursuant to the
exercise of a Nonqualified Stock Option nor will any cash payment be made in
lieu of fractional shares.
8. Incentive Stock Options. The Committee may approve the
grant of Incentive Stock Options to Eligible Persons, subject to the following
terms and conditions:
(a) The purchase price of each share of Common Stock under an
Incentive Stock Option will be at least equal to the Fair Market Value of a
share of the Common Stock on the date of grant; provided, however, that if an
Employee, at the time an Incentive Stock Option is granted, owns stock
representing more than ten percent (10%) of the total combined voting power of
all classes of stock of the Company (as defined in section 424 of the Code),
then the Exercise Price of each share of Common Stock subject to such Incentive
Stock Option shall be at least one hundred and ten percent (110%) of the Fair
Market Value of such share of Common Stock, as determined in the manner stated
above.
(b) No Incentive Stock Option may be exercised after ten (10)
years from the date of grant; provided, however, that if any Employee, at the
time an Incentive Stock Option is granted to him, owns stock representing more
than ten percent (10%) of the total combined voting power of all classes of
stock of the Company (as defined in Section 424 of the Code), the Incentive
Stock Option granted shall not be exercisable after the expiration of five (5)
years from the date of grant.
(c) No fractional shares will be issued pursuant to the
exercise of an Incentive Stock Option nor will any cash payment be made in lieu
of fractional shares.
9. Option Rules. Options granted to any Eligible Person prior
to April 24, 2005, together with Stock Appreciation Rights granted pursuant to
Section 11 hereof during the period, shall in no event cover more than 270,000
shares of Common Stock. The purchase price under each Option may be paid in
cash, cash equivalents or secured notes acceptable to the Committee, by
arrangement with a broker which is acceptable to the Committee where payment of
the option price is made pursuant to an irrevocable direction to the broker to
deliver all or part of the proceeds from the sale of the Option shares to the
Company, by the surrender of shares of Common Stock owned by the Holder
exercising the option and having a Fair Market Value on the date of exercise
equal to the purchase price or in any combination of the foregoing. Each Option
granted to an Eligible Person shall be exercisable in such manner and at such
times as the Committee shall determine. The Committee may modify, accelerate the
exercisability of, extend or assume outstanding Options or may accept the
cancellation of outstanding Options (whether granted by the Company or by
another issuer) in return for the
8
grant of new Options for the same or a different number of shares and at the
same or a different purchase price. The foregoing notwithstanding, no
modification of an Option shall, without the consent of the Holder, alter or
impair his or her rights or obligations under such Option.
10. Restricted Stock. The Committee may approve the grant of
Restricted Stock related or unrelated to Nonqualified Stock Options or Stock
Appreciation Rights to Eligible Persons, subject to the following terms and
conditions:
(a) The Committee in its discretion will determine the
purchase price.
(b) All shares of Restricted Stock sold or granted pursuant to
the Plan (including any shares of Restricted Stock received by the Holder as a
result of stock dividends, stock splits, or any other forms of capitalization)
will be subject to the following restrictions:
(i) The shares may not be sold, transferred, or otherwise
alienated or hypothecated until the restrictions are removed or expire.
(ii) The Committee may require the Holder to enter into an
escrow agreement providing that the certificates representing
Restricted Stock sold or granted pursuant to the Plan will remain in
the physical custody of an escrow holder until all restrictions are
removed or expire.
(iii) Each certificate representing Restricted Stock sold or
granted pursuant to the Plan will bear a legend making appropriate
reference to the restrictions imposed on the Restricted Stock.
(iv) The Committee may impose restrictions on any shares sold
pursuant to the Plan as it may deem advisable, including, without
limitation, restrictions designed to facilitate exemption from or
compliance with the Securities Exchange Act of 1934, as amended, with
requirements of any stock exchange upon which such shares or shares of
the same class are then listed and with any blue sky or other
securities laws applicable to such shares.
(c) The restrictions imposed under subparagraph (b) above upon
Restricted Stock will lapse in accordance with a schedule or other conditions as
determined by the Committee, subject to the provisions of Section 17,
subparagraph (d).
(d) Subject to the provisions of subparagraph (b) above and
Section 17, subparagraph (d), the holder will have all rights of a shareholder
with respect to the Restricted Stock granted or sold, including the right to
vote the shares and receive all dividends and other distributions paid or made
with respect thereto.
(e) Notwithstanding the provisions of subparagraph (b) above
and Section 17, subparagraph (d), Restricted Stock granted or sold may be held
by the trustee of a revocable inter vivos trust, approved by the Company,
established in whole or in part by the
9
Holder and/or the Holder's spouse. So long as the Holder is still an employee,
transfer to such trust shall not violate the provisions of subparagraph (b)
above and ownership by such trust shall not invoke any right or obligation of
the Company under Section 17, subparagraph (d).
11. Stock Appreciation Rights. The Committee may approve the
grant of Rights related or unrelated to Options to Eligible Persons, subject to
the following terms and conditions:
(a) A Stock Appreciation Right may be granted:
(i) at any time if unrelated to an option;
(ii) either at the time of grant, or at any time thereafter
during the option term if related to a Nonqualified Stock Option; or
(iii) only at the time of grant if related to an Incentive
Stock Option;
however, Stock Appreciation Rights granted to any Eligible Person prior
to April 24, 2005, together with Options granted pursuant to Sections 7 or 8
hereof during the period, shall in no event cover more than 270,000 shares of
Common Stock.
(b) A Stock Appreciation Right granted in connection with an
Option will entitle the Holder of the related Option, upon exercise of the Stock
Appreciation Right, to surrender such Option, or any portion thereof to the
extent unexercised, with respect to the number of shares as to which such Stock
Appreciation Right is exercised, and to receive payment of an amount computed
pursuant to Section 11(d). Such Option will, to the extent surrendered, then
cease to be exercisable.
(c) Subject to Section 11(g), a Stock Appreciation Right
granted in connection with an Option hereunder will be exercisable at such time
or times, and only to the extent that a related Option is exercisable, and will
not be transferable except to the extent that such related Option is
exercisable, and will not be transferable except to the extent that such related
Option may be transferable.
(d) Upon the exercise of a Stock Appreciation Right related to
an Option, the Holder will be entitled to receive payment of an amount
determined by multiplying:
(i) The difference obtained by subtracting the purchase price
of a share of Common Stock specified in the related Option from the
Fair Market Value of a share of Common Stock on the date of exercise of
such Stock Appreciation Right, by
(ii) The number of shares as to which such Stock Appreciation
Right has been exercised.
10
(e) The Committee may grant Stock Appreciation Rights
unrelated to Options to Eligible Persons which will be exercisable at such times
as the Committee shall determine. Section 11(d) shall be used to determine the
amount payable at exercise under such Stock Appreciation Right if Fair Market
Value is used, except that Fair Market Value shall not be used if the Committee
specified in the grant of the Right that book value or other measure as deemed
appropriate by the Committee was to be used, and in lieu of "price . . .
specified in the related option," the initial share value specified in the award
shall be used.
(f) Payment of the amount determined under Section 11(d) or
(e) may be made solely in whole shares of Common Stock in a number determined at
their Fair Market Value on the date of exercise of the Stock Appreciation Right
or alternatively, at the sole discretion of the Committee, solely in cash or in
a combination of cash and shares as the Committee deems advisable. If the
Committee decides to make full payment in shares of Common Stock, and the amount
payable results in a fractional share, payment for the fractional share will be
made in cash.
(g) The Committee shall, at the time a Stock Appreciation
Right is granted, impose such conditions on the exercise of the Stock
Appreciation Right as may be required to satisfy the requirements of Rule 16b-3
under the Securities Exchange Act of 1934 (or any other comparable provisions in
effect at the time or times in question). In addition, a Stock Appreciation
Right granted under the Plan may provide that it will be exercisable only in the
event of a Change-in-Control.
12. Performance Awards. The Committee may approve Performance
Awards to Eligible Persons. Such awards may be based on Common Stock performance
over a period determined in advance by the Committee or any other measures as
determined appropriate by the Committee. Payment will be in cash unless replaced
by a Stock Payment in full or in part as determined by the Committee.
13. Stock Payment. The Committee may approve Stock Payments of
Common Stock to Eligible Persons for all or any portion of the compensation
(other than base salary) that would otherwise become payable to an Employee in
cash.
14. Dividend Equivalents. A Holder may also be granted at no
additional cost "Dividend Equivalents" based on the dividends declared on the
Common Stock on record dates during the period between the date an Option is
granted and the date such Option is exercised, or such other equivalent period,
as determined by the Committee. Such Dividend Equivalents shall be converted to
additional shares or cash by such formula as may be determined by the Committee.
Dividend Equivalents shall be computed, as of each dividend
record date, both with respect to the number of shares under the Option and with
respect to the number of Dividend Equivalent shares previously earned by the
Holder (or his successor in interest) and not issued during the period prior to
the dividend record date.
11
15. Adjustment Provisions.
(a) Subject to Section 15(b), if the outstanding shares of
Common Stock are increased, decreased, or exchanged for a different number or
kind of shares or other securities, or if additional shares or new or different
shares or other securities are distributed with respect to such shares of Common
Stock or other securities, through merger, consolidation, sale of all or
substantially all of the property of the Company, reorganization,
recapitalization, reclassification, stock dividend, stock split, reverse stock
split or other distribution with respect to such shares of Common Stock, or
other securities, an appropriate and proportionate adjustment may be made in (i)
the maximum number and kind of shares provided in Section 3 of the Plan, (ii)
the number and kind of shares or other securities subject to the then
outstanding Incentive Awards, and (iii) the price for each share or other unit
of any other securities subject to then outstanding Incentive Awards without
change in the aggregate purchase price or value as to which Incentive Awards
remain exercisable or subject to restrictions.
(b) Unless a successor corporation, or its parent or a
subsidiary, agrees to substitute new options, stock appreciation rights,
performance awards or restricted stock covered by its stock, with appropriate
adjustments as to the number and kind of shares and price, for all Incentive
Awards then outstanding and to continue the Plan, all Incentive Awards then
outstanding under the Plan shall be fully vested and exercisable without
restrictions upon a Change-in-Control. Even if the substitution of new awards
and the continuation of the Plan are provided for upon a Change-in-Control, as
described in the preceding sentence, all Incentive Awards then outstanding under
the Plan shall immediately become fully vested and exercisable without
restrictions by any Holder who within three years after a Change-in-Control
occurs is terminated for reasons other than cause, retirement, death, or
disability or who terminates employment due to Good Reason.
(c) Despite the provisions of Section 15(a), upon dissolution
or liquidation of the Company, or upon a reorganization, merger, or
consolidation of the Company with one or more corporations as a result of which
the Company is not the surviving corporation, or upon the sale of all or
substantially all the property of the Company, all Options, Stock Appreciation
Rights, and Performance Awards then outstanding under the Plan will be fully
vested and exercisable and all restrictions on Restricted Stock will immediately
cease, unless provisions are made in connection with such transaction for the
continuance of the Plan and the substitution for such Incentive Awards of new
Options, Stock Appreciation Rights, Performance Awards, or Restricted Stock
covering the stock of a successor employer corporation, or a parent or
subsidiary thereof, with appropriate adjustments as to the number and kind of
shares and prices.
(d) Adjustments under Section 15(a) and 15(b) will be made by
the Committee, whose determination as to what adjustments will be made and the
extent thereof will be final, binding and conclusive. No fractional interest
will be issued under the Plan on account of any such adjustments.
12
16. General Provisions.
(a) With respect to any shares of Common Stock issued or
transferred under any provision of the Plan, such shares may be issued or
transferred subject to such conditions, in addition to those specifically
provided in the Plan, as the Committee may direct.
(b) Nothing in the Plan or in any instrument executed pursuant
to the Plan will confer upon any Holder any right to continue in the employ of
the Company or any of its subsidiaries or affect the right of the Company to
terminate the employment of any Holder at any time and for any reason.
(c) No shares of Common Stock will be issued or transferred
pursuant to an Incentive Award unless and until all then applicable requirements
imposed by federal and state securities and other laws, rules, and regulations
and by any regulatory agencies having jurisdiction, and by any stock exchanges
upon which the Common Stock may be listed, have been fully met. As a condition
precedent to the issue of shares pursuant to the grant or exercise of an
Incentive Award, the Company may require the Holder to take any reasonable
action to meet such requirements.
(d) No Holder (individually or as a member of a group) and no
beneficiary or other person claiming under or through such Holder will have any
right, title, or interest in or to any shares of Common Stock allocated or
reserved under the Plan or subject to any Incentive Award except as to such
shares of Common Stock, if any, that have been issued or transferred to such
Holder.
(e) The Company may make such provisions as it deems
appropriate to withhold any taxes which it determines it is required to withhold
in connection with any Incentive or Performance Award.
(f) No Incentive Award and no right under the Plan, contingent
or otherwise, will be assignable or subject to any encumbrance, pledge (other
than a pledge to secure a loan from the Company), or charge of any nature except
that, under such rules and regulations as the Company may establish pursuant to
the terms of the Plan, a beneficiary may be designated with respect to an
Incentive Award in the event of death of a Holder of such Incentive Award. If
such beneficiary is the executor or administrator of the estate of the Holder of
such Incentive Award, any rights with respect to such Incentive Award may be
transferred to the person or persons or entity (including a trust) entitled
thereto under the will of the Holder of such Incentive Award, or, in the case of
intestacy, under the laws relating to intestacy. Except as permitted by the
Committee, no Incentive Award which is comprised of a "derivative security," as
that term is defined in the Rules promulgated under Section 16 of the Exchange
Act, which includes Incentive Stock Options, Nonqualified Stock Options, Stock
Appreciation Rights, or Performance Awards, shall be transferable by any
Eligible Person other than by will or the laws of descent and distribution or
pursuant to a qualified domestic relations order.
13
(g) The Committee may permit a Holder to satisfy all or part
of his or her withholding or income tax obligations by having the Company
withhold all or a portion of any Common Stock that otherwise would be issued to
him or her or by surrendering all or a portion of any Common Stock that he or
she previously acquired. Such Common Stock shall be valued at its Fair Market
Value on the date when taxes otherwise would be withheld in cash. Any payment of
taxes by assigning Common Stock to the Company may be subject to restrictions,
including any restrictions required by rules of the Securities and Exchange
Commission.
17. Amendment and Termination.
(a) The Board of Directors will have the power, in its
discretion, to amend, suspend, or terminate the Plan at any time, except that
the provisions of Section 6 relating to Common Stock grants to Outside Directors
shall not be amended more than once in any six-month period after the Plan
becomes effective. An amendment of the Plan shall be subject to the approval of
the Company's shareholders only to the extent required by applicable laws,
regulations and or rules.
(b) The Committee may, with the consent of a Holder, make such
modifications in the terms and conditions of the Incentive Award as it deems
advisable or cancel the Incentive Award (with or without consideration) with the
consent of the Holder.
(c) No amendment, suspension, or termination of the Plan will,
without the consent of the Holder, alter, terminate, impair, or adversely affect
any right or obligation under any Incentive Award previously granted under the
Plan.
(d) In the event a Holder of Restricted Stock ceases to be an
Employee, all such Holder's Restricted Stock which remains subject to
substantial risk of forfeiture at the time his or her employment terminates will
be repurchased by the Company at the original price at which such Restricted
Stock had been purchased unless the Committee determines otherwise.
(e) In the event a Holder of a Performance Award ceases to be
an Employee, all such Holder's Performance Awards will terminate except in the
case of retirement, death, or permanent and total disability. The Committee, in
its discretion, may authorize full or partial payment of Performance Awards in
all cases involving retirement, death, or permanent and total disability.
(f) The Committee may in its sole discretion determine, with
respect to an Incentive Award, that any Holder who is on unpaid leave of absence
for any reason will be considered as still in the employ of the Company,
provided that rights to such Incentive Award during an unpaid leave of absence
will be limited to the extent to which such right was earned or vested at the
commencement of such leave of absence.
14
18. Effective Date of Plan and Duration of Plan. This amended
and restated Plan became effective upon its approval by the shareholders of the
Company within twelve (12) months following the date of its adoption by the
Board of Directors. Unless previously terminated by the Board of Directors, the
Plan will terminate ten (10) years after its approval by the shareholders of the
Company.
EXHIBIT 4.4
EXHIBIT 4.4
PACIFIC LIGHTING CORPORATION
--------------------
STOCK INCENTIVE PLAN
--------------------
(amended and restated as the Sempra Energy Stock Incentive Plan)
I
PURPOSE
The purpose of this Plan is to further the growth and
development of Sempra Energy (the "Company") by strengthening the ability of the
Company to attract and retain outstanding management employees upon whose
judgment, initiative and efforts the continued success of the Company is
dependent, by providing additional incentives for high levels of performance by
management employees and by increasing the commonality of interests of
management employees and the Company's shareholders. This Plan seeks to
accomplish these purposes by providing management employees with a proprietary
interest in the Company through the grant of incentive awards relating to the
Company's Common Stock and consisting of stock options, restricted stock and
other stock based awards.
2
II
ADMINISTRATION
This Plan shall be administered by the Compensation Committee
of the Company's Board of Directors. The Compensation Committee shall consist of
three or more of the Company's Directors and shall be appointed by the Company's
Board of Directors. No Director shall be eligible for appointment to the
Compensation Committee who, at the time of exercising discretion in
administering this Plan, is eligible or, at any time within one year prior
thereto, has been eligible for selection as a person to whom stock may be
allocated or to whom stock options or stock appreciation rights may be granted
pursuant to this Plan or any other plan of the Company or any of its affiliates
entitling the participants therein to acquire stock, stock options or stock
appreciation rights of the Company or any of its affiliates.
The Compensation Committee shall, subject to the express
provisions of this Plan, have full and final authority in its sole discretion:
(a) To grant incentive awards relating to the Company's Common
Stock and consisting of stock options, restricted stock and stock based
awards to employees eligible for selection to participate in this Plan;
(b) To determine the terms and conditions (which need not be
identical) of each incentive award;
(c) To modify or amend any incentive award granted under this
Plan (by cancellation and regrant or substitution of incentive awards
or otherwise and with terms and conditions more or less favorable to
the employee) or waive any restrictions or conditions applicable to any
incentive award or the exercise or realization thereof, except that the
3
Compensation Committee may not adversely affect the rights of an
employee previously granted incentive awards without the consent of the
employee;
(d) To construe and interpret this Plan and any related
incentive award agreement and define the terms employed herein and
therein;
(e) To prescribe, amend and rescind rules, regulations and
policies for the administration of this Plan; and
(f) To make all other determinations necessary or advisable
with respect to this Plan and any incentive award granted hereunder. No
member of the Board of Directors or the Compensation Committee of the
Company will be liable for any action or determination made with
respect to this Plan or any incentive award granted under this Plan.
III
PARTICIPATION
Officers and other management employees of the Company or any
of its subsidiaries (any corporation of which 50% or more of the issued and
outstanding stock having ordinary voting rights is owned directly or indirectly
by the Company or any other business entity or association of which 50% or more
of the outstanding equity interest is so owned) shall be eligible for selection
to participate in this Plan. Directors who are not employees of the Company or
its subsidiaries shall not be eligible for selection to participate in this
Plan.
4
IV
SHARES SUBJECT TO INCENTIVE AWARDS
Incentive awards granted under this Plan shall relate to
shares of Common Stock of the Company. The number of such shares which may have
been issued pursuant to incentive awards granted under this Plan shall not have
exceeded 2,500,000 shares of Pacific Enterprises stock.
If any incentive award granted under this Plan shall expire or
terminate for any reason without shares of the Company's Common Stock having
been issued pursuant thereto or any shares so issued shall be forfeited to the
Company such shares shall again be available for issuance under this Plan except
that shares subject to a stock option that is accepted for alternative
settlement shall not be available for such issuance.
If the outstanding shares of the Company's Common Stock are
increased or decreased as a result of split-up or consolidation thereof, stock
dividend thereon or a similar transaction, or are changed into or exchanged for
a different number or kind of securities as a result of a reclassification or
recapitalization or of a reorganization, merger or consolidation then, in each
such case, an appropriate and proportionate adjustment shall be made in the
number and the kind of securities as to which incentive awards may be granted
under this Plan. A corresponding adjustment shall likewise be made in the number
and kind of securities to which incentive awards then outstanding shall relate.
Any such adjustment, however, in an outstanding incentive awards shall be made
without change in the total price, if any, applicable to the securities to which
such award relates but with a corresponding adjustment in the price for each
such security.
5
V
STOCK OPTIONS
The Compensation Committee may grant stock options to purchase
shares of the Company's Common Stock to employees eligible for selection to
participate in this Plan. Stock options may be granted alone or in addition to
other incentive awards granted under this Plan.
General Terms and Conditions
Each stock option granted under this Plan shall be subject to
the following terms and conditions:
(a) Option Price. The option price of each share purchasable
upon exercise of a stock option shall be determined by the Compensation
Committee at the time of the grant of such stock option but shall be
not less than 85% of the fair market value of the shares on such date.
(b) Option Term. The term of each stock option shall be fixed
by the Compensation Committee at the time of the grant of such stock
option but no stock option shall be exercisable more than ten years
after the date such stock option is granted.
(c) Exercisability. Each stock option shall be exercisable at
such time or times and subject to such terms and conditions as shall be
determined by the Compensation Committee.
(d) Method of Exercise. Each stock option may be exercised in
whole or in part at any time during the term of the stock option by
giving written notice of exercise to the Company specifying the number
of shares
6
to be purchased, accompanied by payment in full of the option price in
cash; provided, however, that the Compensation Committee may, in its
sale discretion and upon such terms and conditions as it may deem
appropriate, permit the option price to be paid, in whole or in part,
in shares of the Company's Common Stock owned by the option holder and
valued at the fair market value of such shares on the date the option
is exercised.
(e) Non-Transferability of Options. Each stock option shall be
non-transferable by the option holder other than by will or the laws of
descent and distribution and shall be exercisable during the option
holder's lifetime only by the option holder or by the option holder's
guardian or legal representative.
Each stock option granted under this Plan shall be subject to
such additional terms and conditions, not inconsistent with the terms of this
Plan, as the Compensation Committee may provide.
Incentive Stock Options
In addition to the foregoing terms and conditions each stock
option granted pursuant to this Plan that is intended to be an "incentive stock
option" as defined in Section 422A of the Internal Revenue Code of 1986 shall
also comply with the following additional terms and conditions:
(a) Designation. Such stock option shall be designated as an
"incentive stock option" by the Compensation Committee.
7
(b) Option Price. The option price of each share purchasable
upon exercise of such stock option shall be determined by the
Compensation Committee at the time of the grant of such stock option
but shall not be less than 100% of the fair market value of the shares
on such date.
(c) Limitation on Grant. No such stock option shall be granted
to any person who, at the time the stock option is granted, owns stock
of the Company possessing more than lot of the voting power of all
classes of stock of the Company provided that this paragraph shall not
apply if at the time such stock option is granted, the option price is
at least 110% of the fair market value of the shares subject to such
stock option and such stock option by its terms is not exercisable
after the expiration of 5 years from the date the option is granted.
(d) Limitation on Amount. The aggregate fair market value
(determined at the time the stock option is granted) of the shares with
respect to which incentive stock options are exercisable for the first
time by such option holder during any calendar year (under all stock
option plans of the Company and its subsidiaries) shall not exceed the
$100,000 limitation set forth in the Internal Revenue Code.
8
Alternative Settlement of Stock Options
The Compensation Committee may, in its sole discretion and
upon such terms and conditions as it may deem appropriate, accept the surrender
of the right to exercise any stock option granted under this Plan as to any or
all of the shares as to which such option is then exercisable, by payment to the
person entitled to exercise the option of an amount not to exceed the difference
between the option price and the then fair market value of the shares as to
which such right to exercise is surrendered. Such payment shall be in cash or in
shares of the Company's Common Stock (valued at the then fair market value
thereof) or in any combination thereof as the Compensation Committee shall
determine in its sole discretion.
VI
RESTRICTED STOCK
The Compensation Committee may grant restricted stock to
employees eligible for selection to participate in this Plan. Restricted stock
will consist of shares of the Company's Common Stock that are subject to
forfeiture by the employee to the Company under circumstances specified by the
Compensation Committee. Restricted stock may be granted alone or in addition to
other incentive awards granted under this Plan.
Each grant of restricted stock under this Plan shall be
subject to the following terms and conditions:
(a) Forfeiture Conditions. The Compensation Committee shall
specify the circumstances (which may include, without limitation, the
termination of the employee's employment with the Company and its
subsidiaries under certain circumstances or within certain time periods
or
9
the failure by the Company or the employee to attain specified
performance objectives) under which shares of restricted stock may be
forfeited by the employee to the Company.
(b) Nontransferability of Shares. Shares of restricted stock
shall not be transferable by the employee until they are no longer
subject to forfeiture.
(c) Restricted Stock Agreement. An employee granted restricted
stock shall not have any rights with respect to the grant unless,
within a period of sixty days (or such other period as the Compensation
Committee may specify) after the date of the award, the employee (i)
enters into a restricted stock agreement with the Company evidencing
the grant and the forfeiture conditions and transfer restrictions
applicable to the shares of restricted stock, (ii) pays to the Company
the amount of $1.00 (or such other amount as shall be determined by the
Compensation Committee) for each share of restricted stock, and (iii)
delivers to the Company an appropriate stock power, endorsed in blank,
relating to the stock certificates evidencing the shares of restricted
stock.
(d) Stock Certificate. A stock certificate evidencing the
shares of restricted stock and bearing a legend referring to the
forfeiture conditions and transfer restrictions applicable to such
shares shall be issued in the name of an employee who is granted
restricted stock and who has entered into a related restricted stock
agreement but such certificate shall be retained in the custody of the
Company (or an escrow agent
10
specified by the Compensation Committee) until such shares are no
longer subject to forfeiture.
(e) Rights as a Shareholder. Unless otherwise specified by the
Compensation Committee and except with respect to the forfeiture
conditions and transfer restrictions applicable thereto, an employee
holding shares of restricted stock shall have all rights of a
shareholder with respect to such shares including the right to vote
such shares and to receive all dividends and distributions with respect
thereto. Each grant of restricted stock under this Plan shall be
subject to such
additional terms and conditions not inconsistent with the terms of this Plan as
the Compensation Committee may provide.
VII
STOCK BASED AWARDS
The Compensation Committee may grant stock based awards to
employees eligible for selection to participate in this Plan. Stock based awards
will consist of awards that are valued in whole or in part by reference to, or
are otherwise based on the Company's Common Stock, including, without
limitation, stock appreciation rights, restricted stock units, performance
shares, performance share units, dividend equivalents and tax-offset payments.
Stock based awards may be granted alone or in addition to other incentive awards
granted under this Plan.
Stock based awards shall be subject to such terms and
conditions as shall be specified by the Compensation Committee and may require,
without limitation, continued
11
employment or the attainment by the employee or the Company of specified
performance objectives. Payment or settlement of stock based awards shall be in
cash or in shares of the Company's Common Stock, or in any combination thereof
as the Compensation Committee shall determine in its sole discretion.
VIII
CHANGE IN CONTROL
Upon the occurrence of a change in control of the Company:
(a) Any time periods relating to the exercise or realization
of any stock option granted under this Plan shall be accelerated so
that such options may be immediately exercised or realized in full;
(b) All shares of restricted stock granted under this Plan
shall immediately cease to be forfeitable;
(c) All conditions relating to the realization of any stock
based award granted under this Plan shall immediately terminate; and
(d) The Company shall, upon the request of any employee
granted an incentive award under this Plan, purchase the award for an
amount of cash which could have been attained upon the exercise of
realization of the award had such award been fully exercisable or
realizable.
The Compensation Committee may make such further provisions
with respect to a change in controls of the Company as it shall deem equitable
and in the best interests of the Company.
12
Such provision may be made in any agreement relating to an incentive award
granted under this Plan, by amendment to any such agreement or by resolution of
the Compensation Committee.
The phrase "change in control of the Company" shall have such
meaning as from time to time ascribed thereto by the Compensation Committee and
set forth in any agreement relating to any incentive award granted under this
Plan or by resolution of the Compensation Committee; provided, however, that
notwithstanding the foregoing, a "change in control of the Company" shall be
deemed to have occurred if:
(a) Any "Person" (as such term is used in Sections 13(d) and
14(d)(2) of the Securities Exchange Act of 1934 but excluding any
benefit plan for employees of the Company or its subsidiaries or any
trustee, agent or other fiduciary for any such plan acting in such
person's capacity as such fiduciary), directly or indirectly, becomes
the beneficial owner of securities of the Company representing 20% or
more of the combined voting power of the Company's then outstanding
securities;
(b) During any two consecutive years, individuals who at the
beginning of such a period constitute the Board of Directors of the
Company cease for any reason to constitute at least a majority thereof
unless the election, or the nomination for election by the Company's
shareholders of each new director was approved by a vote of at least
two-thirds of the directors then still in office who were directors at
the beginning of the period; or
(c) The shareholders of the Company shall have approved (i)
any consolidation or merger of the Company in which the Company is not
13
the continuing or surviving corporation or pursuant to which shares of
the Company's Common Stock are converted into cash, securities or other
property other than a merger of the Company in which the holders of the
Company's Common Stock immediately prior to the merger have the same
proportionate ownership of common stock of the surviving corporation
immediately after the merger, (ii) any sale, lease, exchange or other
transfer (in one transaction or a series of related transactions) of
all, or substantially all, of the assets of the Company, or (iii) any
plan or proposal for the liquidation or dissolution of the Company.
IX
AMENDMENTS TO STOCK OPTION PLANS
Upon the approval of this Plan by shareholders of the Company,
the Company's 1979 Stock Option Plan shall terminate as to the grant of
additional stock options.
The provisions of Article VIII of this Plan shall be
applicable to all stock options (other than stock options intended to qualify as
"incentive stock options") granted under the Company's 1970 Amended Stock Option
Plan and the Company's 1979 Stock Option Plan as if such options were stock
options granted under this Plan.
The Compensation Committee may, in its sole discretion, and
upon such terms and conditions as it may deem appropriate permit the option
price of stock options (other than stock options intended to qualify as
"incentive stock options") granted under the Company's 1970 Stock Option Plan or
the Company's 1979 Stock Option Plan to be paid, in whole or in part,
14
in shares of the Company's Common Stock owned by the option holder and valued at
the fair market value of such shares on the date such option is exercised.
X
GENERAL PROVISIONS
(a) Nothing in this Plan or in related agreement will confer
upon any employee any right to continue in the employ of the Company or any of
its subsidiaries or affect the right of the Company to terminate the employment
of any employee at any time with or without cause.
(b) No employee (individually or as a member of a group) and
no beneficiary or other person claiming under or through such employee will have
any right, title, or interest in or to any shares allocated or reserved under
this Plan or subject to any incentive award except as to such shares, if any,
that have been issued to such employee.
(c) The Company may make such provisions as it deems
appropriate to withhold any taxes which it determines it is required to withhold
in connection with any incentive award.
(d) No incentive award and no right under this Plan,
contingent or otherwise, will be assignable or subject to any encumbrancer
pledge or charge of any nature except that, under such rules and regulations as
the Company may establish pursuant to the terms of the Plan, a beneficiary may
be designated with respect to an incentive award in the event of death of a
holder of such award.
(e) No shares will be issued under this Plan or any incentive
award granted under this Plan unless and until all then applicable requirements
imposed by federal and
15
state securities and other laws, rules, and regulations and by any regulatory
agencies having jurisdiction, and by any stock exchanges upon which the shares
may be listed, have been fully met.
XI
AMENDMENT AND TERMINATION
The Board of Directors of the Company may at any time,
suspend, amend, modify or terminate this Plan, provided that no amendment or
modification shall become effective which would:
(i) materially increase the benefits accruing to
participants in this Plan,
(ii) materially increase the number of shares which may
be issued under this Plan, or
(iii) materially modify the requirements as to
eligibility for participation in this Plan
unless approved by the affirmative vote of the holders of a majority of
the Company's shares present, or represented, and entitled to vote at a meeting
duly held in accordance with applicable law. No such suspension, amendment,
modification or termination of this Plan shall alter or impair any rights or
obligations under any award theretofore granted under this Plan.
16
XII
EFFECTIVE DATE
This Plan shall be effective upon the adoption thereof by the
Board of Directors of the Company subject to approval by the affirmative vote of
the holders of a majority of the Company's shares present, or represented and
entitled to vote at a meeting of shareholders duly held in accordance with the
laws of the State of California within twelve months following the date of the
adoption of this Plan by the Board of Directors of the Company. Any incentive
award granted under this Plan prior to such approval shall be granted subject to
such approval being so obtained.
XIII
EXPIRATION DATE
Unless previously terminated by the Board of Directors, this
Plan shall expire as to the grant of incentive awards at the close of business
on the tenth anniversary of the date this Plan is adopted by the Board of
Directors of the Company. No such expiration shall alter or impair any rights or
obligations under any incentive award theretofore granted under this Plan.
EXHIBIT 4.5
EXHIBIT 4.5
PACIFIC ENTERPRISES
--------------------------
EMPLOYEE STOCK OPTION PLAN
--------------------------
(amended and restated as the Sempra Energy Employee Stock Option Plan)
I
PURPOSE
The purpose of this Plan is to further the growth and
development of Sempra Energy (the "Company") by strengthening the ability of the
Company to attract and retain outstanding employees upon whose judgment,
initiative and efforts the continued success of the Company is dependent, by
providing employees with additional incentives for high levels of performance
and by increasing the commonality of interests of employees and the Company's
shareholders. This Plan seeks to accomplish these purposes by providing
employees with a proprietary interest in the Company through the grant of stock
options to purchase shares of the Company's Common Stock.
II
ADMINISTRATION
This Plan shall be administered by the Compensation Committee
of the Company's Board of Directors.
The Compensation Committee shall, subject to the express
provisions of this Plan, have full and final authority in its sole discretion:
2
(a) To grant stock options to persons eligible for
selection to participate in this Plan provided that no
employee may be granted in any calendar year stock options to
purchase more than an aggregate of 112,785 shares of the
Company's Common Stock;
(b) To determine the terms and conditions (which need
not be identical) of each stock option;
(c) To modify or amend any stock option granted under
this Plan (except to reduce the option price thereof or
increase the number of shares subject thereto, other than as
required or permitted pursuant to Article IV of this Plan) or
waive any restrictions or conditions applicable thereto or to
the exercise thereof, provided that an optionee's rights may
not be adversely affected in any material respect without the
consent of the optionee;
(d) To construe and interpret this Plan and any related
stock option and define the terms employed herein and therein;
(e) To prescribe, amend and rescind rules, regulations
and policies for the administration of this Plan; and
(f) To make all other determinations necessary or
advisable with respect to this Plan and any stock option
granted hereunder. The Compensation Committee, in its sole
discretion and upon such terms and
conditions as it may prescribe, may designate one or more officers or a
committee of officers of the Company or its subsidiaries to exercise any or all
of the foregoing authority of the Compensation Committee except authority with
respect to the grant of stock options to, or stock
3
options held by, any person who, at the time such authority is exercised, is
subject to Section 16 of the Securities Act of 1934 in respect of equity
securities of the Company.
No member of the Board of Directors or the Compensation
Committee or agent or designee thereof will be liable for any action or inaction
in respect of this Plan or any stock option granted under this Plan.
III
PARTICIPATION
Officers and other employees of the Company or any of its
subsidiaries (any corporation of which 50% or more of the issued and outstanding
stock having ordinary voting rights is owned directly or indirectly by the
Company or any other business entity or association of which 50% or more of the
outstanding equity interest is so owned) shall be eligible for selection to
participate in this Plan. Directors who are not also employees of the Company or
its subsidiaries shall not be eligible for selection to participate in this
Plan.
IV
SHARES SUBJECT TO STOCK OPTIONS
Stock options granted under this Plan shall be for the
purchase of shares of Common Stock of the Company. The maximum number of shares
as to which stock options may be granted under this Plan during 1998 shall be
1,251,723 shares. During each subsequent year the maximum number of shares as to
which stock options may be granted under this Plan shall be a number of shares
equal to 1% of the number of shares of the Company's Common Stock outstanding at
the beginning of such year. If any stock option granted under this Plan shall
for any reason expire or terminate during the year in which it is granted
without having been
4
exercised in full, then any unexercised shares which were subject to such option
shall again be available for the grant of stock options under this Plan during
such year.
If the outstanding shares of the Company's Common Stock are
increased or decreased as a result of split-up or consolidation thereof, stock
dividend thereon or a similar transaction, or are changed into or exchanged for
a different number or kind of securities as a result of a reclassification or
recapitalization or of a reorganization, merger or consolidation then, in each
such case, an appropriate and proportionate adjustment shall be made in the
number and the kind of securities as to which stock options may be granted under
this Plan and to any employee. A corresponding adjustment shall likewise be made
in the number and kind of securities to which stock options then outstanding
shall relate. Any such adjustment, however, in an outstanding stock option shall
be made without change in the total purchase price applicable to the securities
to which such stock option relates but with a corresponding adjustment in the
option price for each such security.
V
TERMS OF STOCK OPTIONS
Each stock option granted under this Plan shall be subject to
the following terms and conditions:
(a) Option Price. The option price of each share purchasable
upon exercise of a stock option shall be determined by the Compensation
Committee but shall be not less than 100% of the fair market value of the shares
subject to the stock option on the date the stock option is granted. Unless a
higher option price is specified by the Compensation Committee, the
5
option price of each share purchasable upon exercise of a stock option shall be
100% of the fair market value on the date the stock option is granted.
(b) Option Term. The term of each stock option shall be
determined by the Compensation Committee. Unless a different term is specified
by the Compensation Committee, the term of a stock option shall be for ten years
from the date the stock option is granted.
(c) Exercisability. Each stock option shall be exercisable
either immediately or at such time or times as may be determined by the
Compensation Committee. Unless a different determination is specified by the
Compensation Committee, a stock option shall become and remain exercisable in
cumulative installments of 20% of the shares originally subject thereto on each
of the first five anniversaries of the date the stock option is granted.
(d) Dividend Equivalents. Each stock option may provide for
the payment upon the exercise of the stock option of dividend equivalents (the
amount of dividends that would have been paid on the shares as to which a stock
option is exercised had the shares been outstanding from the date the stock
option was granted) as may be determined by the Compensation Committee. Unless a
different determination is specified by the Compensation Committee, full
dividend equivalents shall be paid by the Company in cash to the employee upon
the exercise of a stock option.
(e) Termination of Employment. Each option shall expire at
such times following the optionee's termination of employment with the Company
and its subsidiaries as may be determined by the Compensation Committee. Unless
a different determination is specified by the Compensation Committee:
(1) Upon the termination of employment by reason of the
retirement by the optionee after having attained age 60, a
stock option shall expire on the earlier
6
of (a) three years from the date of retirement or (b) the date
on which it would otherwise have expired, and during that
period shall be exercisable only as to the shares as to which
it was exercisable on the last day of employment.
(2) Upon the termination of employment by reason of the
death of the optionee, a stock option shall expire on the
earlier of (a) three years from the date of the employee's
death or (b) the date on which it would otherwise have
expired, and during that period shall be exercisable only as
to the shares as to which it was exercisable on the last day
of employment.
(3) Upon the termination of employment for any other
reason, a stock option shall expire on the earlier of (a)
three months from the date of termination of employment or (b)
the date on which it would otherwise have expired, and during
that period shall be exercisable only as to the shares as to
which it was exercisable on the last day of employment. (f)
Non-Transferability. Each stock option shall be
non-transferable by the
optionee other than by will or the laws of descent and distribution or pursuant
to a qualified domestic relations order as defined by the Internal Revenue Code
of 1986, as amended, or Title I of the Employee Retirement Income Security Act,
or the rules thereunder.
(g) Additional Terms and Conditions. Each stock option shall
be subject to such additional terms and conditions, not inconsistent with the
terms of this Plan, as may be determined by the Compensation Committee
including, without limitation, provisions for increases in the option price or
changes in the term of the stock option, individual or corporate performance
conditions to the exercisability of the stock option or the payment of dividend
equivalents and limitations on amounts payable as dividend equivalents.
7
VI
CHANGE IN CONTROL
Upon the occurrence of a change in control of the Company, any
time periods relating to the exercise of any stock option granted under this
Plan and held by any optionee who is an employee of the Company or its
subsidiaries at the time of the change of control shall be accelerated and any
conditions to exercise thereof shall immediately terminate so that immediately
upon the change in control the stock option thereafter may be exercised at any
time or from time to time in whole or in part as to all shares remaining subject
to the stock option until the expiration date thereof.
The Compensation Committee may make such further provisions
with respect to a change in control of the Company as it shall deem equitable
and in the best interests of the Company. Such provision may be made in any
stock option granted under this Plan or any agreement relating thereto, by
amendment or supplement to any such stock option or agreement, or by resolution
of the Compensation Committee.
The phrase "change in control of the Company" shall have such
meaning as from time to time ascribed thereto by the Compensation Committee and
set forth in any stock option granted under this Plan or any agreement relating
thereto or by any amendment or supplement to any such stock option or agreement,
or by resolution of the Compensation Committee; provided, however, that
notwithstanding the foregoing, a "change in control of the Company" shall be
deemed to have occurred if:
(i) Any person is or becomes the beneficial owner,
directly or indirectly, of securities of the Company (not
including in the securities beneficially owned by
8
such person any securities acquired directly from the Company
or its affiliates other than in connection with the
acquisition by the Company or its affiliates of a business)
representing 20% or more of the combined voting power of the
Company's then outstanding securities; or
(ii) During any period of three consecutive years, the
following individuals cease for any reason to constitute a
majority of the number of directors then serving: individuals
who at the beginning of such three-year period constitute the
Board of Directors of the Company and any new director (other
than a director whose initial assumption of office is in
connection with an actual or threatened election contest,
including but not limited to a consent solicitation, relating
to the election of directors of the Company) whose appointment
or election by the Board of Directors of the Company or
nomination for election by the Company's shareholders was
approved or recommended by a vote of at least two-thirds of
the directors then still in office who either were directors
at the beginning of such three-year period or whose
appointment, election or nomination for election was
previously so approved or recommended; or
(iii) There is consummated a merger or consolidation of
the Company or any direct or indirect subsidiary of the
Company with any other corporation, other than (a) a merger or
consolidation which would result in the voting securities of
the Company outstanding immediately prior to such merger or
consolidation continuing to represent (either by remaining
outstanding or by being converted into voting securities of
the surviving entity or any parent thereof), in combination
with the ownership of any trustee or other fiduciary holding
securities under an
9
employee benefit plan of the Company or its subsidiaries, at
least 60% of the combined voting power of the securities of
the Company or such surviving entity or any parent thereof
outstanding immediately after such merger or consolidation, or
(b) a merger or consolidation effected to implement a
recapitalization of the Company (or similar transaction) in
which no person is or becomes the beneficial owner, directly
or indirectly, of securities of the Company (not including in
the securities beneficially owned by such person any
securities acquired directly from the Company or its
affiliates other than in connection with the acquisition by
the Company or its affiliates of a business) representing 20%
or more of the combined voting power of the Company's then
outstanding securities; or
(iv) The shareholders of the Company approve a plan of
complete liquidation or dissolution of the Company or there is
consummated an agreement for the sale or disposition by the
Company of all or substantially all of the Company's assets,
other than a sale or disposition by the Company of all or
substantially all of the Company's assets to an entity, at
least 60% of the combined voting power of the voting
securities of which are owned by shareholders of the Company
in substantially the same proportions as their ownership of
the Company immediately prior to such sale.
Notwithstanding the foregoing, no event or transaction which would
otherwise constitute a change of control under clauses (i) through (iv) shall
constitute a change of control for purposes of any stock option if effected in
connection with either (a) the currently pending business combination of the
Company and Enova Corporation or (b) any other substantially similar business
combination of the Company and Enova Corporation that is effected on or prior to
10
December 31, 1999. In addition, any event or transaction which would otherwise
constitute a change in control under clauses (i) through (iv) shall not
constitute a change of control for purposes of any stock option granted to an
individual who in connection with the event or transaction participates as an
equity investor in the acquiring entity or any of its affiliates. For purposes
of the preceding sentence, an individual shall not be deemed to have
participated as an equity investor in the acquiring entity or any of its
affiliates by virtue of (a) obtaining beneficial ownership of any equity
interest in the acquiring entity or any of its affiliates as a result of the
grant to the individual of an incentive compensation award under one or more
incentive plans of the acquiring entity or any of its affiliates (including, but
not limited to, the conversion in connection with such event or transaction of
incentive compensation awards of the Company or its subsidiaries into incentive
compensation awards of the acquiring entity or any of its affiliates), on terms
and conditions substantially equivalent to those applicable to other executives
of the Company or its subsidiaries immediately prior to such event or
transaction, after taking into account normal differences attributable to job
responsibilities, title and the like, (b) obtaining beneficial ownership of any
equity interest in the acquiring entity or any of its affiliates on terms and
conditions substantially equivalent to those obtained in such transaction by all
other shareholders of the Company, or (c) having previously obtained beneficial
ownership of any equity interest in the acquiring entity or any of its
affiliates in a manner unrelated to such event or transaction.
For purposes of this Article VI, the following definitions
shall be applicable:
(i) "affiliate" shall have the meaning set forth in Rule
12b-2 promulgated under Section 12 of the Exchange Act.
11
(ii) "beneficial owner" shall have the meaning set forth
in Rule 13d-3 under the Exchange Act.
(iii) "Exchange Act" shall mean the Securities Exchange
Act of 1934, as amended from time to time.
(iv) "person" shall have the meaning set forth in
Section 3(a)(9) of the Exchange Act, as modified and used in
Sections 13(d) and 14(d) thereof, except that such term shall
not include (a) the Company or any of its subsidiaries, (b) a
trustee or other fiduciary holding securities under an
employee benefit plan of the Company or any of its affiliates,
(c) an underwriter temporarily holding securities pursuant to
an offering of such securities, (d) a corporation owned,
directly or indirectly, by the shareholders of the Company in
substantially the same proportions as their ownership of stock
of the Company, or (v) a person or group as used in Rule
13d-l(b) under the Exchange Act.
With respect to stock options granted under the Plan from and
after (but not before) the completion of business combination of Pacific
Enterprises and Enova Corporation in which the two corporations became
subsidiaries of the Company (the "Effective Time"), the text of this Article VI
shall read as follows:
In the event of a Change in Control, all stock options then
outstanding shall automatically become fully vested and exercisable as of the
date of the Change in Control. In addition to the foregoing, in the case of a
Change in Control involving a merger of, or consolidation involving, the Company
in which the Company is (A) not the surviving corporation (the "Surviving
Entity") or (B) becomes a wholly-owned subsidiary of the Surviving Entity or any
corporation which is a parent corporation thereof (within the meaning of Section
12
424(d) of the Internal Revenue Code of 1986, as amended, and the applicable
rulings and regulations thereunder), each outstanding stock option granted under
this Plan and not exercised (a "Predecessor Option") will be converted into an
option (a "Replacement Option") to acquire common stock of the Surviving Entity
or its parent corporation, which Replacement Option will have substantially the
same terms and conditions as the Predecessor Option, with appropriate
adjustments as to the number and kind of shares and exercise prices.
Notwithstanding the foregoing, in the event of a Change in Control, the
Compensation Committee expressly reserves the discretion to cancel all
outstanding stock options effective as of the date of the Change in Control, in
exchange for a cash payment to be made to each option holder within five
business days following the Change in Control in an amount equal to the excess
of the fair market value of the Company's Common Stock on the date of the Change
in Control over the exercise price of each such stock option, multiplied by the
number of shares that are subject to such option. Notwithstanding the foregoing,
in the event that the Company becomes a party to a transaction that is intended
to qualify for "pooling of interests" accounting treatment and, but for one or
more of the provisions of this Plan or any stock option would so qualify, then
this Plan and any stock option shall be interpreted so as to preserve such
accounting treatment, and to the extent that any provision of the Plan or any
stock option would disqualify the transaction from pooling of interests
accounting treatment (including, if applicable, an entire stock option), then
such provision shall be null and void. All determinations to be made in
connection with the preceding sentence shall be made by the independent
accounting firm whose opinion with respect to "pooling of interests" treatment
is required as a condition to the Company's consummation of such transaction.
13
For purposes of the foregoing, a "Change in Control" shall be
deemed to have occurred when:
(i) Any Person is or becomes the beneficial owner (as
that term is defined in Rule 13d-3 under the Securities
Exchange Act of 1934), directly or indirectly, of securities
of the Company representing twenty percent (20%) or more of
the combined voting power of the Company's then outstanding
securities; or
(ii) The following individuals cease for any reason to
constitute a majority of the number of directors then serving:
individuals who, on the date hereof, constitute the Board of
Directors of the Company and any new director (other than a
director whose initial assumption of office is in connection
with an actual or threatened election contest, including, but
not limited to, a consent solicitation, relating to the
election of directors of the Company) whose appointment or
election by the Board of Directors or nomination for election
by the Company's shareholders was approved or recommended by a
vote of at least two-thirds (2/3) of the directors then still
in office who either were directors on the date hereof or
whose appointment, election or nomination for election was
previously so approved or recommended; or
(iii) There is consummated a merger or consolidation of
the Company or any direct or indirect subsidiary of the
Company with any other corporation, other than (A) a merger or
consolidation which would result in the voting securities of
the Company outstanding immediately prior to such merger or
consolidation continuing to represent (either by remaining
outstanding or by being converted into voting securities of
the surviving entity or any parent thereof), in combination
with the ownership of any trustee or other fiduciary holding
securities under an employee benefit plan of the Company or
14
any subsidiary of the Company, at least sixty percent (60%) of
the combined voting power of the securities of the Company or
such surviving entity or any parent thereof outstanding
immediately after such merger or consolidation, or (B) a
merger or consolidation effected to implement a
recapitalization of the Company (or similar transaction) in
which no Person is or becomes the beneficial owner, directly
or indirectly, of securities of the Company (not including in
the securities beneficially owned by any Person any securities
acquired directly from the Company or its affiliates other
than in connection with the acquisition by the Company or its
affiliates of a business) representing twenty percent (20%) or
more of the combined voting power of the Company's then
outstanding securities; or
(iv) The shareholders of the Company approve a plan of
complete liquidation or dissolution of the Company or there is
consummated an agreement for the sale or disposition by the
Company of all or substantially all of the Company's assets,
other than a sale or disposition by the Company of all or
substantially all of the Company's assets to an entity, at
least sixty percent (60%) of the combined voting power of the
voting securities of which are owned by shareholders of the
Company in substantially the same proportions as their
ownership of the Company immediately prior to such sale.
For purposes of the foregoing definition of "Change in
Control," the term "Person" means any person, entity, or "group" within the
meaning of Section 13(d)(3) or Section 14(d)(2) of the Securities Exchange Act
of 1934, as amended, and the applicable rulings and regulations thereunder (the
"Exchange Act"), except that such term shall not include (i) the Company or any
of its subsidiaries, (ii) a trustee or other fiduciary holding securities under
an employee benefit plan of the Company or any of its affiliates (as defined in
Rule 12b-2
15
promulgated under the Exchange Act), (iii) an underwriter temporarily holding
securities pursuant to an offering of such securities, (iv) a corporation owned,
directly or indirectly, by the shareholders of the Company in substantially the
same proportions as their ownership of stock of the Company, or (v) a person or
group as used in Rule 13d-1(b) under the Exchange Act.
VII
TERMINATION OF 1988 INCENTIVE PLAN
Upon the approval of this Plan by shareholders of the Company,
the Company's Stock Incentive Plan approved by the Company's Board of Directors
and shareholders in 1988 shall terminate as to the grant of additional incentive
awards.
VIII
GENERAL PROVISIONS
(a) Nothing in this Plan or in related agreement will confer
upon any employee any right to continue in the employ of the Company or any of
its subsidiaries or affect the right of the Company to terminate the employment
of any employee at any time with or without cause.
(b) No employee (individually or as a member of a group) and
no beneficiary or other person claiming under or through such employee will have
any right, title, or interest in or to any shares allocated or reserved under
this Plan or subject to any stock option except as to such shares, if any, that
have been issued to such employee.
(c) The Company may make such provisions as it deems
appropriate to withhold any taxes which it determines it is required to withhold
in connection with the exercise of any stock option.
16
(d) No stock option and no right under this Plan, contingent
or otherwise, will be assignable or subject to any encumbrance, pledge or charge
of any nature except that, under such rules and regulations as the Company may
establish pursuant to the terms of the Plan, a beneficiary may be designated
with respect to a stock option in the event of death of the employee granted the
stock option.
(e) No shares will be issued under this Plan or any stock
option granted under this Plan unless and until all then applicable requirements
imposed by federal and state securities and other laws, rules and regulations
and by any regulatory agencies having jurisdiction, and by any stock exchanges
upon which the shares may be listed, have been fully met.
(f) In the event that any member of the Compensation Committee
shall fail to be a "disinterested person" within the meaning of Rule 16b-3 under
the Securities Exchange Act of 1934 or an "outside director" within the meaning
of Section 162(m) of the Internal Revenue Code of 1986, the Board of Directors
of the Company may appoint a committee of two or more directors, each of whom
shall be a disinterested director and an outside director, to administer this
Plan and, upon such appointment, such committee shall become the administrator
of this Plan and shall succeed to all of the authority vested in the
Compensation Committee by this Plan.
IX
AMENDMENT AND TERMINATION
The Board of Directors of the Company may at any time,
suspend, amend, modify or terminate this Plan, provided that no amendment or
modification shall become effective which, within the meaning of Rule 16b-3
under the Securities Exchange Act of 1934, would:
(i) materially increase the benefits accruing to
participants in this Plan,
17
(ii) materially increase the number of shares which may
be issued under this Plan, or
(iii) materially modify the requirements as to
eligibility for participation in this Plan,
unless approved by the affirmative vote of the holders of a majority of the
Company's shares present, or represented, and entitled to vote at a meeting duly
held in accordance with applicable law. No such suspension, amendment,
modification or termination of this Plan shall alter or impair any rights or
obligations under any stock option theretofore granted under this Plan.
X
EFFECTIVE DATE
This Plan shall be effective upon the adoption thereof by the
Board of Directors of the Company subject to approval by the affirmative vote of
the holders of a majority of the Company's shares present, or represented, and
entitled to vote at a meeting of shareholders duly held in accordance with the
laws of the State of California within twelve months following the date of the
adoption of this Plan by the Board of Directors of the Company. Any stock option
granted under this Plan prior to such approval shall be granted subject to such
approval being so obtained.
EXHIBIT 5.1
SHEARMAN & STERLING
555 California Street
San Francisco, California 94104-1522
June 5, 1998
Sempra Energy
101 Ash Street
San Diego, California 92101
Ladies and Gentlemen:
We have acted as counsel for Sempra Energy, a California
corporation (the "Company"), in connection with the Registration Statement on
Form S-8 (the "Registration Statement") of the Company filed with the
Securities and Exchange Commission under the Securities Act of 1933, as
amended (the "Securities Act"), with respect to approximately 64,000,000
shares (the "Shares") of common stock, no par value, of the Company (the
"Common Stock"), to be issued from time to time pursuant to the Company's 1998
Long Term Incentive Plan, the Company's 1998 Non-Employee Directors' Stock
Plan, Enova 1986 Corporation Long-Term Incentive Plan, San Diego Gas &
Electric Company Savings Plan, Pacific Lighting Corporation Stock Incentive
Plan, Pacific Enterprises Employee Stock Option Plan, Southern California Gas
Company Retirement Savings Plan, Sempra Energy Trading Retirement Savings
Plan, Sempra Energy Savings Plan, and Pacific Enterprises Retirement Savings
Plan (each, a "Plan").
In so acting, we have examined the Registration Statement and
we have also examined and relied as to factual matters upon the
representations and warranties contained in originals, or copied certified or
otherwise identified to our satisfaction, of such documents, records,
certificates and other instruments as in our judgment are necessary or
appropriate to enable us to render the opinion expressed below. In such
examination, we have assumed the genuineness of all signatures, the
authenticity of all documents, certificates and instruments submitted to us as
originals and the conformity with originals of all documents submitted to us
as copies.
The opinion expressed below is limited to the General
Corporation Law of California and the federal law of the United States, and we
do not express any opinion herein concerning any other law.
Based upon the foregoing and having regard for such legal
considerations as we have deemed relevant, we are of the opinion that the
Shares have been duly authorized by the
2
Company and, when (a) issued and delivered by the Company in accordance with
the terms of the relevant Plan and (b) paid for in full in accordance with the
terms of the relevant Plan, the Shares will be validly issued, fully paid and
non-assessable.
We hereby consent to the filing of this opinion as an exhibit
to the Registration Statement.
Very truly yours,
SHEARMAN & STERLING
EXHIBIT 23.1
Independent Auditors' Consent for Pacific Enterprises
-----------------------------------------------------
We consent to the incorporation by reference in this Registration Statement of
Sempra Energy on Form S-8 of our reports dated January 27, 1998 and January
31, 1996, appearing in and incorporated by reference in the Annual Report on
Form 10-K of Pacific Enterprises and subsidiaries for the years ended December
31, 1997 and December 31, 1995, respectively.
DELOITTE & TOUCHE LLP
Los Angeles, CA
June 4, 1998
EXHIBIT 23.2
Independent Auditors' Consent for Enova Corporation
---------------------------------------------------
We consent to the incorporation by reference in this Registration Statement of
Sempra Energy on Form S-8 of our reports dated February 23, 1998, appearing in
the Annual Report on Form 10-K, as amended, of Enova Corporation for the year
ended December 31, 1997, and February 16, 1996, on San Diego Gas & Electric
Company, appearing in the Annual Report on Form 10-K of Enova Corporation and
San Diego Gas & Electric Company for the year ended December 31, 1995
incorporated by reference in Registration Statement No. 333-21229 of Mineral
Energy Company (now Sempra Energy) on Form S-4 dated February 5, 1997.
DELOITTE & TOUCHE LLP
San Diego, CA
June 4, 1998