Exhibit 10.03
AMENDMENT TO
EMPLOYMENT AGREEMENT
By this Agreement, Sempra Energy (the "Company"), a California
corporation formerly known as Mineral Energy Company, and ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇ (the "Executive") amend the Employment Agreement (the
"Agreement") between Mineral Energy Company and Executive dated
October 12, 1996, to be effective December 1, 1998, as follows:
1. ▇▇▇▇▇▇▇▇▇ ▇ (▇) (▇▇▇) of the Agreement is stricken and replaced
with the following language:
"(iii) the relocation of the Executive's principal place of
employment to a location away from the Company's headquarters or a
relocation of the Company's headquarters to a location further
away which is both further away from Executive's residence and
more than thirty (30) miles from such headquarters or a
substantial increase in the Executive's business travel
obligations outside of the Southern California area as of the
Effective Date other than any such increase that (A) arises in
connection with extraordinary business activities of the Company
and (B) is understood not to be part of the Executive's regular
duties with the
Company;"
2. Paragraph 5 (a) (vi) of the Agreement is modified in its
opening phrase to read:
"(vi) Continuation of Welfare Benefits. For a period of three
(3) years or until the Executive is eligible for retiree benefits,
whichever is longer, ..."
3. Paragraphs 5 (d), (e) and (f) of the Agreement are stricken
and replaced by the following:
"(d) Code Section 280G
(i) Gross-Up. Notwithstanding any other provisions of this
Agreement, in the event that any payment or benefit received or to
be received by the Executive (whether pursuant to the terms of
this Agreement or any other plan, arrangement or agreement with
(A) the Company, (B) any Person (as defined in Section 4(e))whose
actions result in a Change Control or (C) any Person affiliated
with the Company or such Person) (all such payments and benefits,
including the Severance Payments, hereinafter called the "Total
Payments") would be subject (in whole or part) to the tax (the
"Excise Tax") imposed under section 4999 of the Code, the Company
shall pay to the Executive such additional amounts (the "Gross-Up
Payment") such that the net amount retained by the Executive,
after deduction of any Excise Tax on the Total Payments and any
federal, state and local income and employment taxes and Excise
Tax upon the Gross-Up Payment, shall be equal to the Total
Payments. For purposes of determining the amount of the Gross-Up
Payment, the Executive shall be deemed to pay federal income tax
at the highest marginal rate of federal income taxation in the
calendar year in which the Gross-Up Payment is be made and state
and local income taxes at the highest marginal rate taxation in
the state and locality of the Executive's residence on the date on
which the Gross-Up Payment is calculated for purposes of this
section, net of the maximum reduction in federal income taxes
which could be obtained from deduction of such state and local
taxes. In the event that the Excise Tax is subsequently
determined to be less than the amount taken into account
hereunder, the Executive shall repay to the Company, at the time
that the amount of such reduction in Excise Tax is finally
determined, the portion of the Gross-Up Payment attributable to
such reduction (plus that portion of the Gross-Up Payment
attributable to the Excise Tax and federal, state and local income
tax imposed on the Gross-Up Payment being repaid by the Executive
to the extent that such repayment results in a reduction in Excise
Tax and/or a federal, state or local income tax deduction) plus
interest on the amount of such repayment at the rate provided in
section 1274(b)(2)(B) of the Code. In the event that the Excise
Tax is determined to exceed the amount taken into account
hereunder (including by reason of any payment the existence or
amount of cannot be determined at the time of the Gross-Up
Payment), the Company shall make an additional Gross-Up Payment in
respect of such excess (plus any interest, penalties or additions
payable by the Executive with respect to such excess) at the time
that the amount of such excess is finally determined. The
Executive and the Company shall each reasonably cooperate with the
other in connection with any administrative or judicial
proceedings concerning the existence or amount of liability for
Excise with respect to the Total Payments.
(ii) Accounting Firm. All determinations to be made with respect
to this Section 5 (d) shall be made by the Company's independent
accounting firm (or, in the case of a payment following a Change
in Control, the accounting firm that was, immediately prior to the
Change in Control, the Company's independent auditor). The
accounting firm shall be paid by the Company for its services
performed hereunder."
4. Sections 5 (e) and (f) of the Agreement are added to read:
"(e) Outplacement Services. The Executive shall receive
outplacement services suitable to his or her position for a period
of eighteen (18) months following the Date of Termination, or if
earlier, until the first acceptance of an offer of employment with
a subsequent employer, in an aggregate amount not to exceed
$50,000.
(f) Financial Planning Services. The Executive shall receive
financial planning services for a period of eighteen (18) months
following the Date of Termination at a level consistent with the
benefits provided under the Company's financial planning program
for the Executive, as in effect immediately prior to the Date of
Termination."
5. Section 5(h) of the Agreement is added to read:
(h) Notwithstanding anything contained herein, if a Change in
Control occurs and if, prior to the date of the Change in Control,
the Executive's employment is terminated by the Company (other
than for Cause, death or Disability), or by the Executive for Good
Reason, and if such Termination (i) was at the request of a third
party who has taken steps reasonably calculated to effect the
Change in Control or (ii) otherwise arose in connection with or in
anticipation of the Change in Control, then such Termination shall
be treated as a Termination following a Change in Control for
purposes of this Agreement (including, without limitation, for
purposes of determining the amounts of the Severance Payments
under this Section 5).
6. Paragraph 8 ("Arbitration") of the Agreement is stricken and
replaced with the following language:
"8. Dispute Resolution.
Any disagreement, dispute, controversy or claim arising out of or
relating to this Agreement or the interpretation of this Agreement
or any arrangements relating to this Agreement or contemplated in
this Agreement or the breach, termination or invalidity thereof
shall be settled by final and binding arbitration administered by
JAMS/Endispute in San Diego, California in accordance with the
then existing JAMS/Endispute Arbitration Rules and Procedures for
Employment Disputes. In the event of such an arbitration
proceeding, the Executive and the Company shall select a mutually
acceptable neutral arbitrator from among the JAMS/Endispute panel
of arbitrators. In the event the Executive and the Company cannot
agree on an arbitrator, the Administrator of JAMS/Endispute will
appoint an arbitrator. Neither the Executive nor the Company nor
the arbitrator shall disclose the existence, content, or results
of any arbitration hereunder without the prior written consent of
all parties. Except as provided herein, the Federal Arbitration
Act shall govern the interpretation, enforcement and all
proceedings. The arbitrator shall apply the substantive law (and
the law of remedies, if applicable) of the state of California, or
federal law, or both, as applicable and the arbitrator is without
jurisdiction to apply any different substantive law. The
arbitrator shall have the authority to entertain a motion to
dismiss and/or a motion for summary judgment by any party and
shall apply the standards governing such motions under the Federal
Rules of Civil Procedure. The arbitrator shall render an award
and a written, reasoned opinion in support thereof. Judgment upon
the award may be entered in any court having jurisdiction
thereof."
IN WITNESS WHEREOF, the Executive and, pursuant to authorization
from its Board of Directors, the Company have caused this
Amendment to Employment Agreement to be executed as of the
effective date, above.
SEMPRA ENERGY
By: ________________________
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Chairman & Chief Executive Officer
________________________
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
