SAN DIEGO GAS & ELECTRIC COMPANY
1996 DEFERRED COMPENSATION AGREEMENT
FOR OFFICERS #3
THIS AGREEMENT is made and entered into this _____ day
of December, 1995, by and between San Diego Gas & Electric
Company (hereinafter "SDG&E") and
_____________________________________ (hereinafter
"Officer"), an elected officer of SDG&E.
WITNESSETH:
WHEREAS, SDG&E desires to provide Officer with the
opportunity to defer base compensation and bonus that is
payable for services to be rendered after the date of this
Agreement and which, as a result of amendments to the
Internal Revenue Code ("Code") made by the Tax Reform Act of
1986 ("1986 Tax Act"), cannot be contributed on Officer's
behalf as Pretax Contributions to the SDG&E Savings Plan
("Savings Plan"); and
WHEREAS, SDG&E desires to match, as an additional SDG&E
contribution, a percentage of the Officer's base
compensation and bonus deferred pursuant to this Agreement;
and
WHEREAS, Officer and SDG&E desire that the payment of a
portion of Officer's base compensation and bonus and the
additional matching contribution be deferred pursuant to the
terms and provisions of this Agreement.
NOW, THEREFORE, THE PARTIES HERETO HEREBY AGREE AS
FOLLOWS:
1. This Agreement shall be effective upon its
execution by SDG&E and Officer with respect to base
compensation and bonus which would otherwise be payable to
Officer for services rendered after such execution and shall
continue in effect until this Agreement is terminated as
provided herein. Officer shall be eligible to enter into
this Agreement only if Officer has elected the maximum Basic
Contribution under the Savings Plan for which Officer is
eligible.
2. SDG&E shall credit to an account on SDG&E's books,
in Officer's name, that percentage of Officer's 1996 base
compensation (in equal biweekly installments of whole dollar
amounts) and 1997 bonus otherwise payable to Officer as may
be specified by Officer in this Agreement's Election Form.
The amount credited under this paragraph 2 may not exceed
the percentage of Officer's 1996 base compensation and 1997
bonus that may be contributed as Pretax Contributions or
After-tax Contributions under the terms of the Savings Plan
(determined prior to any reduction of such percentage
required under applicable law), reduced by any amount
contributed by Officer as After-tax Contributions or on
Officer's behalf as Pretax Contributions to the Savings
Plan. Further, the amount credited under this paragraph 2
shall be limited to an amount which, when added to SDG&E's
matching contribution under paragraph 3 of this Agreement
and all allocations to his or her accounts under the Savings
Plan, does not exceed the
maximum amount that could have been allocated to Officer's
Savings Plan accounts pursuant to Section 415 of the Code,
as in effect prior to the enactment of the 1986 Tax Act.
For purposes of this paragraph 2, "base compensation and
bonus" shall include Officer's Pretax Contributions to the
Savings Plan. SDG&E shall have the sole and complete
authority to determine the maximum amount that may be
credited under this paragraph 2.
3. In addition, as amounts are credited to Officer's
account under paragraph 2, SDG&E shall also credit to
Officer's account, as a matching contribution, an amount
equal to the SDG&E Matching Contributions that would have
been contributed on Officer's behalf to the Savings Plan
(reduced by Matching Contributions actually made to the
Savings Plan for Officer) under the provisions of the Code
prior to enactment of the 1986 Tax Act, if the amount
deferred under paragraph 2 had been contributed to the
Savings Plan as Pretax Contributions or After-tax
Contributions.
4. There shall be credited to Officer's account an
additional amount equal to seven and four-tenths percent
(7.4%) per annum computed on the balance in Officer's
account as of the end of each month. SDG&E reserves the
right to increase or decrease from time to time such
percentage credited with respect to amounts to be credited
under paragraphs 2 and 3 to the account after the date of
such increase or decrease, provided that upon a "change-in-
control" (as defined in the SDG&E Amended 1986 Long-Term
Incentive Plan) no decrease will result in a percentage
credited under the previous sentence of less than the last
published interest rate shown in Xxxxx'x Average of Yields
on Public Utility Bonds for a utility having a rating
equivalent to SDG&E.
5. All amounts credited to Officer's account pursuant
to paragraphs 2, 3, and 4 hereof shall be paid to Officer
upon his or her termination of services as an Officer in the
form and over the period specified by Officer on this
Agreement's Election Form; provided, however, the SDG&E
Compensation Committee ("Committee") may, in its sole
discretion, provide instead for payment of the amount in
Officer's account in a form and over a period determined by
such Committee except that the Committee's authority and
discretion to change the form or period of distribution
shall terminate upon such a "change-in-control."
6. In the event of Officer's death after installment
payments to Officer have commenced hereunder, installment
payments shall continue to be paid to the person(s)
specified by Officer on the Election Form for the remainder
of the period selected by Officer on the Election Form. In
the event of Officer's death before any payment has been
made under this Agreement, Officer's account shall be
distributed or commence to be distributed, as soon as
administratively practicable after Officer's death, to the
person(s) specified by Officer on this Agreement's Election
Form in the form and over the period selected on such
Election Form. The Committee may, in its sole discretion,
provide instead for payment of the amount in Officer's
account to Officer's beneficiary in a form and over a period
determined by the Committee except that the Committee's
authority and discretion to change the form or period of
distribution shall terminate upon such a "change-in-
control."
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If Officer's spouse is the beneficiary, the annual
amount of any installment payments under this paragraph 6
shall at least equal the entire annual income earned by the
account and if the spouse dies prior to distribution of all
amounts in Officer's account, all undistributed income on
such account shall be distributed to the spouse's estate.
Upon the death of Officer's beneficiary, the balance in
Officer's account (after the application of the previous
sentence, if the spouse is the beneficiary) shall be
distributed to the person(s) designated by the beneficiary
on a form provided by SDG&E or, if no designation is made,
to the beneficiary's estate.
7. No amounts credited to Officer's account may be
assigned, transferred, encumbered, or made subject to any
legal process for the payment of any claim against Officer,
Officer's spouse or other beneficiary. In no event shall
Officer, Officer's spouse, or other beneficiary have the
right to recover any amount credited to Officer's account
other than in accordance with this Agreement.
8. Nothing contained in this Agreement and no action
taken pursuant to the provisions of this Agreement shall
create or be construed to create a trust of any kind, or a
fiduciary relationship between SDG&E and Officer or any
other person. To the extent that any person acquires a
right to receive payments from SDG&E under this Agreement,
such right shall be no greater than the right of any
unsecured general creditor of SDG&E. Title to and
beneficial ownership of any assets, whether cash or
investments, which SDG&E may earmark to pay the deferred
compensation hereunder, shall at all times remain assets of
SDG&E and neither Officer nor any other person shall, under
this Agreement, have any property interest whatsoever in any
specific assets of SDG&E.
9. The existence of this Agreement shall not confer
upon Officer the right to continue to serve as an Officer
for any period of time.
10. This Agreement shall be deemed to modify any
provisions in an employment agreement between Officer and
SDG&E pertaining to the timing of payment of base
compensation and bonus and, in the event of any conflict
between this Agreement and such provisions of the employment
agreement, this Agreement shall control.
11. This Agreement may be terminated by SDG&E upon
thirty days' written notice to Officer. This Agreement will
also terminate upon Officer's filing of an election of a
Basic Contribution percentage which is less than the maximum
for which he or she is eligible under the Savings Plan.
Termination of the Agreement shall be applicable only with
respect to base compensation and bonus payable to Officer on
and after the first day of the calendar year following the
date of termination. Funds previously deferred and credited
(and income earned on such funds) will continue to be
governed by the applicable year's Officer's Deferred
Compensation Agreement Election Form and Section 4 of this
Agreement.
12. Officer acknowledges that Officer has been advised
that Officer may confer with and seek advice from a tax or
financial advisor of Officer's choice concerning this
deferral. Officer further acknowledges that Officer has not
received tax advice from SDG&E nor has Officer relied upon
information provided by SDG&E in electing to make this
deferral.
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IN WITNESS WHEREOF, this Agreement has been executed
on the day and year written above.
OFFICER SAN DIEGO GAS & ELECTRIC COMPANY
__________________________ By: __________________________
Signature of Officer
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