(Effective as of Closing of
Transaction with Pacific Enterprises, Inc.)
SAN DIEGO GAS & ELECTRIC COMPANY
SEVERANCE PLAN
I. PURPOSE AND OBJECTIVE
To provide a separation pay allowance to help meet Eligible
Employees' immediate financial burden associated with being
involuntarily and permanently terminated under conditions
described in the Plan. This Plan supersedes the previous
Severance Plan dated October 12, 1996, as of the Effective
Date.
II. RESPONSIBILITY
The Company, through its Division and Department heads, is
responsible for administering the Plan.
The Company, through its Human Resources Division, is
responsible for providing further interpretation and
guidance.
The business decisions, the manner in which they are carried
out that may result in the termination of an employee, and
the reason for termination (including resignation in lieu of
discharge) are decisions to be made by the Company in its
sole discretion. In making these decisions, the Company is
not required to treat similarly situated employees in the
same manner.
III. ELIGIBILITY
A. "Eligible Employee" includes an employee whose job is
terminated by the Company, who is not covered by any
other severance plan adopted by the Company, and who:
1. is a regular non-bargaining unit employee working as
a full-time, part-time, or call-in employee of the
Company, or a regular non-bargaining unit full-time,
part-time or call-in employee on medical
leave,military leave or long-term disability;
2. has received written notice that employment will be
terminated;
3. continues as a satisfactory employee until released
by the Company in accordance with its business
needs;
4. abides by such other written terms and conditions as
the Company has established as a condition for
participation in, or payment of, benefits from the
Plan; and
5. is not excluded as provided below.
B. Eligible Employees exclude employees:
1. whose employment terminates due to death;
2. whose employment terminates because of
unsatisfactory performance, the employee is
discharged for cause, and/or resigns in lieu of
discharge for cause, all as determined by the
Company;
3. who accept employment with an organization that is
affiliated (directly or indirectly) with the
Company;
4. who voluntarily terminate employment with the
Company for any reason except as provided in IV.C
below; or
5. who are temporary workers (agency or independent),
interns, independent contractors, employment
contract employees, student employees, or employees
covered by a collective bargaining agreement that
does not provide for Plan participation.
C. Participation in the Plan commences when an Eligible
Employee receives the notice of employment termination
referred to above. An Eligible Employee who commences
participation in the Plan is called a "Participant" in
the Plan.
IV. BENEFITS
A. Introduction. For purposes of determining Plan
Benefits, the following shall apply:
1. "Annual Pay" means Base Salary multiplied by 52.
2. "Base Salary" means average regular straight time
weekly base pay in effect during the month
preceding termination of employment with the
Company, excluding overtime, shift differentials,
Bonus Awards and other special payments determined
by the Company in its sole discretion.
3. "Years of Continuous Service" means the number of
years since Hire Date a person has been continuously
employed as an active regular full-time, part-time
or call-in employee of the Company or its
predecessors, as determined by the Company.
An Eligible Employee who is a call-in or regular
part-time employee entitled to these benefits
receive pro-rated severance benefits as follows:
a. Add the total number of hours worked during
preceding ten (10) years.
b. Divide by 2,087 hours for non-exempt employees
and 2,080 hours for exempt employees.
c. The resulting number, excluding fraction, will
constitute Years of Continuous Service completed
under the Plan.
4. "Hire Date" shall be, except as provided in a
collective bargaining agreement, the date a person
was hired by SDG&E as a non-bargaining unit regular
full-time employee, a non-bargaining unit regular
part-time employee, or a non-bargaining unit call-in
Employee, whichever occurred first.
5. "Final Salary" means the Participant's Base Salary
plus his or her Bonus Awards.
6. "Bonus Awards" means the gross cash amounts awarded
under the San Diego Gas & Electric Company Senior
Management Incentive Compensation Plan or
Compensation Incentive Plan during the 12-month
period ending on the date of the Participant's
termination of employment divided by 52.
7. If, in the sole judgment of the Company, an Eligible
Employee is terminated, and the Eligible Employee's
services can be used for a period equal to the weeks
of Plan Benefits or if there is a reasonable
possibility that a job for which the Eligible
Employee is qualified may become open within such
period, the Company may, in its sole discretion,
permit an Eligible Employee to elect between
remaining on the payroll for the period of time equal
to the Plan Benefits or receiving the actual Plan
Benefits.
B. Benefits Without Change in Control or Other Corporate
Events.
1. Basic Benefits. In the absence of termination in
connection with certain corporate events described
in Section IV.C., Plan Benefits will be paid in one
lump sum at termination in accordance with one of
the following schedules, as determined in Paragraph
2.
Schedule A, Without Signed Release. Plan Benefits are
determined by multiplying Base Salary by the number of
credits determined as follows.
Years of Continuous
Service Completed Credits
Less than 4 1
At least 4, but less than 10 2
At least 10, but less than 12 3
At least 12, but less than 14 4
At least 14, but less than 17 5
At least 17, but less than 20 6
At least 20, but less than 23 7
At least 23, but less than 26 8
At least 26, but less than 28 9
At least 28 10
Schedule B, with Signed Release. Plan Benefits are
determined by multiplying Final Salary by the number of
credits determined as the sum of the following: (1) one
credit for each Year of Continuous Service; (2) one
credit for each full $10,000 of Annual Pay; and (3) one
credit for each full $10,000 of Annual Pay in excess of
$40,000. Notwithstanding the above, the minimum number
of total credits shall be six and the maximum number of
total credits shall be 52.
2. Participants who sign a release of all known and
unknown claims in such form as the Company
determines shall receive Plan Benefits under
Schedule B of Paragraph 1. Other Participants shall
receive Plan Benefits under Schedule A of Paragraph
1.
a. As an additional benefit, Participants under age
40 who sign such a release will receive
continuation of all group medical insurance, and
50% of the AD&D and 50% of the life insurance in
four) represented by item 1, Schedule B of
Paragraph 1. The Company will continue to pay
its share of the premiums, and the Company will
deduct the Participant's share of such premiums
from the Participant's lump sum check.
b. As an additional benefit, Participants over age
40 who sign such a release which waives claim
under the Age Discrimination in Employment Act
will receive continuation of all group medical
insurance, and 50% of the AD&D and 50% of the
life insurance in force as of the date of
termination for the employee and existing
covered dependents for the number of weeks of
Base Salary (minimum of four) represented by
item 1, Schedule B of Paragraph 1. The Company
will continue to pay its share of the premiums,
and the Company will also pay the Participant's
share of such premiums. Company will not pay
for dependent coverage for life and AD&D.
c. For purposes of computing Plan Benefits under
this Section IV.B., Participants who are
participants in the Senior Management Incentive
Plan and who sign such release shall receive, at
a minimum, 13 credits under Schedule B of
Paragraph 1.
C. Benefits Upon Change in Control and Other Corporate
Events.
1. In General.
a. Involuntary Termination Upon Change in Control.
An otherwise Eligible Employee who is
involuntarily terminated for other than cause,
death, or disability within two years after a
Change in Control will receive a Plan Benefit
based upon Final Salary, pursuant to Paragraph 2
below. A Change in Control shall mean:
i. a reorganization, merger or consolidation of
the Company with one or more corporations;
ii. the acquisition of beneficial ownership,
directly or indirectly, of more than 30
percent of the voting power of the
outstanding stock of the Company by one
person, group, association, corporation or
other entity 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
iii. the sale of all or substantially all the
property of the Company.
iv. Notwithstanding i., ii., or iii. above, no
Change in Control shall be deemed to occur
with respect to any reorganization, merger,
consolidation or sale entered into
voluntarily by the Company:
(a) in which the Company survives as a
direct or indirect subsidiary of a
public company, or
(b) in which members of the company's Board
of Directors constitute a majority of
the members of the Board of Directors
of the surviving company, and the
shareholders of the Company constitute
a majority of the shareholders of the
surviving company.
b. Voluntary Termination for Good Reason. An
otherwise Eligible Employee who voluntarily
terminates employment for Good Reason within two
years following a Change in Control (as defined
above), will receive a Plan Benefit based upon
Final Salary, pursuant to Paragraph 2 below.Good
Reason shall mean:
i. a significant reduction in Base Salary for
reasons not related to performance,
ii. elimination or significant reduction of the
aggregate value of health, dental,
disability and life coverage, or
iii. involuntary transfer to a new business
location outside the San Diego Gas &
Electric Company's service territory.
c. Sale of Work Unit. A Participant will
receive a Plan Benefit based upon Final
Salary, pursuant to Paragraph 2 below, if he
or she is terminated under the following
circumstances: unless the purchaser of a
work unit assumes the obligations of this
Plan, such benefits will be paid to a
Participant employed by such work unit who
is either: (i) terminated following the sale
of the work unit and not rehired by
purchaser within two months from the date of
the sale and retained for a period of at
least six months, or (ii) not retained by
the purchaser for a period of at least six
months beyond the date of sale, in either
case where unacceptable performance is not
an issue.
2. Corporate Event Benefit. In the event of
termination in connection with certain corporate
events described in this Section IV.C., Plan
Benefits shall be paid in one lump sum at
termination in an amount equal to Final
multiplied by the number of credits determined below
and under Paragraph 3:
Schedule A, Schedule B,
Years of Continuous Credits Without Credits
Service Completed Release With Release
Less than 2 Yrs. 2 4
2 Yrs. but less than 4 2 6
4 Yrs. but less than 6 3 8
6 Yrs. but less than 8 3 10
8 Yrs. but less than 10 3 12
10 Yrs. but less than 15 4 17
12 Yrs. but less than 14 5 21
14 Yrs. but less than 15 6 24
15 Yrs. but less than 16 7 27
16 Yrs. but less than 17 8 30
17 Yrs. but less than 18 9 33
18 Yrs. but less than 19 10 36
19 Yrs. but less than 20 11 39
20 Yrs. but less than 21 12 44
21 Yrs. but less than 22 13 47
22 Yrs. but less than 23 14 50
23 Yrs. but less than 24 15 53
24 Yrs. but less than 25 16 56
25 Yrs. but less than 26 17 61
26 Yrs. but less than 27 18 64
27 Yrs. but less than 28 19 67
28 Yrs. but less than 29 20 70
29 Yrs. but less than 30 21 73
30 Yrs. or more 22 78
3. Release from Claims. If Participant voluntarily
signs a release of all known and unknown claims in
such form as the Company prepares, then the
Participant shall be entitled to the severance
payment under Schedule B of Paragraph 2, or, if
greater, the amount in Schedule B of IV.B.1. Other
Participants will receive benefits under Schedule A
of Paragraph 2.
a. As an additional benefit, a Participant under age
40 who signs such a release will receive
continuation of all group medical insurance, and
50% of the AD&D and 50% of the life insurance in
force as of the date of termination for the
Participant and existing covered dependents for
the number of weeks of Final Salary (minimum of
four) represented in Schedule B of Paragraph 2.
The Company will continue to pay its share of the
premiums, and the Company will deduct the
employee's share of such premiums from the
Participant's lump sum check.
b. As an additional benefit, a Participant over
age 40 who signs such a release which waives
claims under the Age Discrimination in Employment
Act will receive continuation of all group
medical insurance, and 50% of the AD&D and 50% of
the life insurance in force as of the date of
termination for the Participant and existing
covered dependents for the number of weeks of
Final Salary (minimum of four) represented in
Schedule B of Paragraph 2. The Company will
continue to pay its share of the premiums, and
the Company will also pay the Participant's share
of such premiums. The Company will not pay for
dependent coverage for life and AD&D.
c. For purposes of computing severance allowances
pursuant to this IV.C., Participants who are
participants in the Senior Management Incentive
Plan and who sign such release will receive, at a
minimum, the same Plan Benefits under Paragraph 2
as Participants who have completed exactly 19
years of Continuous Service.
V. GENERAL
A. The Board of Directors reserves the right to change,
amend or terminate the Plan at any time for any reason,
however no such amendment or termination shall affect the
right to any unpaid Plan Benefit of any Participant whose
employment was terminated prior to the adoption of the
amendment or resolution to terminate the Plan.
B. The Company is the Plan Administrator and the Plan
Sponsor for purposes of the Employee Retirement Income
Security Act of 1974 ("ERISA"). The Company has the
complete discretion and responsibility to interpret the
Plan. All actions by the Company are final, binding,
conclusive.
C. As to participants in the Savings Plan and/or the Pension
Plan, participation will stop on the termination date.
The employee will receive information about rights under
those plans.
D. If an employee who is eligible for a Plan Benefit dies
after termination and prior to the payment of the Plan
Benefit, the Plan Benefit will be paid in a single lump
sum to the spouse, if any. If no spouse survives,
payment will be made to the employee's estate.
E. To the full extent permitted by law, except as provided
in the Plan, no Plan Benefit hereunder shall be subject
to anticipation, alienation, sale, transfer, assignment,
pledge, encumbrance or change, and any attempt to do so
shall be void.
F. The Effective Date of this Plan is as of the closing of a
transaction whereunder Enova Corporation becomes a wholly
owned subsidiary of a public company which also owns all
shares of Pacific Enterprises, Inc. In the event such
transaction does not occur by January 1, 1999, the terms
of this amended and restated Plan shall not apply. This
Plan is drawn under and shall be construed in accordance
with ERISA and, to the extent not preempted by ERISA,
with the laws of the State of California.
G. The Company shall be responsible for paying all benefits
under the Plan. The Plan shall be unfunded and benefits
hereunder shall be paid only from the general assets of
the Company. All or part of any benefits paid under the
Plan may be credited to any statutory amounts to which
employees are entitled upon termination to the extent
allowed by applicable law.
H. Claims for benefits should be made in writing to the
Company, Attention: Human Resources Department, pursuant
to the claims procedure set forth in the
Employee Handbook. For a discussion of other plan
information and your ERISA rights, please see the
Employee Handbook.
Adopted the _______ of October, 1996
Margot Kyd, Vice President
Human Resources