Exhibit 10.12
SEMPRA ENERGY 
EXECUTIVE DEFERRED COMPENSATION PLAN  
I. Purpose 
The purpose of this Plan is to provide the opportunity to defer the receipt  
of compensation to a select group of executives upon whose judgment,  
initiative and efforts the continued success of the Sempra Energy Companies  
is dependent. 
II. Definitions 
A. "Account" means each separate unfunded booking account established for a  
Participant under Paragraph A of Article V. 
B. "Beneficiary" means the person or persons or entity or entities designated  
by a Participant to receive the benefits payable to a Beneficiary in  
accordance with Article IX of the Plan after the Participant's death. 
C. "Committee" means the Compensation Committee of the Company's Board of  
Directors. 
D. "Company" means Sempra Energy. 
E. "Disability" means any disability for which a Participant is entitled to  
benefits under the Sempra Energy Benefit Plan, the Southern California Gas  
Company Disability Benefit Plan, the San Diego Gas & Electric Long Term  
Disability Plan, the Sempra Energy Supplemental Executive Retirement Plan, or  
any other long-term disability plan of an Employer, and any continuation of  
such disability, while a Participant is not covered by such plans, which  
prevents a Participant from engaging in the principal duties of his  
employment, as verified to the Committee's satisfaction. 
F. "Employer" means the Company and 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) which adopt this Plan, or as the context requires, a  
Participant's particular employer. 
G. "Fixed Account" means the investment option that provides a fixed rate of  
return tied to the Moody's Rate. 
H. "Incentive Compensation" means the annual incentive award earned by a  
Participant under the Sempra Energy Executive Incentive Plan, and any other  
incentive compensation as specified by the Committee. 
I. "Investment Return" means the actual earnings or loss under any of the  
investment options, other than the fixed return option, made available to the  
Participant. 
J. "Moody's Plus Rate" means the Moody's Rate as defined below plus the  
greater of (1) 10% of the Moody's Rate or (2) one percentage point per annum.   
Moody's Rate is the Moody's Corporate Bond Yield Average - Monthly Average  
Corporates as published by Moody's Investors Service, Inc. (or any successor  
thereto).  The Moody's Rate for the month of June, as used in this Plan,  
means the average of the daily Moody's Rates for June. 
K. "Participant" means an eligible employee who has elected to defer  
compensation pursuant to Article III. 
L. "Plan" means this Executive Deferred Compensation Plan. 
M. "Plan Year" means a payroll calendar year except that the first Plan Year  
shall be from July 1, 1998 through December 31, 1998. 
N. "Salary" means base salary. 
O. "Surviving Spouse" means a Participant's spouse married to the Participant  
on the Participant's date of death and still living on the date benefits are  
payable to a Surviving Spouse under Paragraph B of Article IX of the Plan. 
P. The masculine pronoun whenever used shall include the feminine pronoun,  
and the singular shall include the plural, as the context requires. 
III. Participation 
A. Eligibility to Participate 
Executive Officers of the Company as designated shall be eligible to  
participate in this Plan.  The Committee may designate additional officers  
and key employees of the Employer who shall participate in this Plan and the  
effective date of such participation, subject to agreement by the Board of  
Directors of the executive's Employer (if not the Company) that such  
executive participate and that such Employer pay the costs of this Plan for  
the executive and his Surviving Spouse. 
B. Election to Participate 
Each eligible employee shall become a Participant in the Plan by electing to  
defer Salary, dividend equivalents, Incentive Compensation or all in  
accordance with Article IV of this Plan.  Each eligible employee shall remain  
a Participant in the Plan, whether or not eligible to continue deferring  
Salary and Incentive Compensation, until all amounts credited to his Account  
have been distributed or until his death, if earlier. 
IV. Deferral 
A. Amount of Deferral 
An eligible employee may elect to defer 100% or any smaller percentage of his  
Salary payable during a Plan Year, subject to a $10,000 minimum amount. An  
eligible employee may elect to defer 100% or any smaller percentage of his  
Incentive Compensation and dividend equivalents earned during a Plan Year,  
whether or not he elects to defer Salary payable during the Plan Year, as  
permitted by the Company.  The amount of Salary and Incentive Compensation  
deferred shall be withheld on the date or dates they otherwise would be  
payable to the Participant. 
B. Election to Defer 
An election to defer shall be made before the beginning of the Plan Year  
during which Salary is to be paid and Incentive Compensation is to be earned.   
Election shall be in writing, shall be modified only by  adjustments  
permitted under the Plan, shall be made at the time and in the form  
prescribed by the Company, and shall be effective only upon delivery to the  
Company.  The election shall specify the amount deferred, the deferral  
period, the payment method and any other matter required to be specified by  
the Company.  
C. Adjustments and Special Deferred Elections  
A mid-year election to make deferrals of Salary and or Bonus under the plan  
shall be permitted within 30 days of the commencement of employment or of any  
other event resulting in new eligibility. 
A Participant may modify his/her deferral election in the event that there is  
a change in a Participant's marital status or number of Dependents or there  
is a termination or commencement of employment of the Participant's spouse.   
A Participant shall be entitled to change his deferral election in a manner  
that is consistent with such change in marital, dependent, or employment  
status, by providing written notice thereof to the Company, in a form  
acceptable to the Company.  Any such change shall be effective on the first  
day of the calendar month next coincident to the month in which written  
notice is received by the Company. 
V. Accounts 
A. Participants' Accounts  
For deferrals permitted by the Company and elected by a Participant a  
separate Account or Accounts shall be established as specified by the Company  
for each Plan Year.  Each Account shall be treated separately for purposes of  
payment of benefits under the Plan.  Salary, Incentive Compensation and  
dividend equivalents shall be credited to each Account as of the date they  
otherwise would have been paid to the Participant.  The deferral shall be  
invested in the Fixed Account or as permitted by the Company, to purchase  
Company stock, or other equity securities.  All such purchases must be made  
through an investment tracking device, a Rabbi Trust, or other similar  
instrument that causes the deferred amount not to become taxable to the  
Participant.  All such purchases must be made in accordance with applicable  
Company procedures as they may be amended from time to time.  The Company may  
permit funds in one investment option to be transferred to other investment  
options. 
B. Interest Credited on Deferrals Invested in the Fixed Account  
Interest shall be credited to each Account invested in the Fixed Account  
during each Plan Year at a rate equal to the Moody's Plus Rate for the month  
of June immediately prior to the Plan Year in which such interest rate is to  
be credited. The interest rate credited to Participants' Accounts may  
fluctuate from Plan Year to Plan Year.  However, when distribution is to  
begin as to a Participant's Account, and the Participant has elected  
installment payments, the rate shall be fixed on the date installment  
payments are to begin.  The fixed rate shall be the average of the Moody's  
Plus Rates for the June of the five prior calendar years, and that rate  
thereafter shall be credited to the Participant's Account from which the  
installment payments are to be made.  Interest on each Account balance shall  
be credited monthly at one-twelfth the appropriate rate, compounded monthly. 
C. Investment Return Credited on Deferral in Other Investment Option 
The investment return credited to each Account during each Plan Year shall be  
the actual return earned or lost in the investment option. 
VI. Length of Deferral  
A. Basic Deferral Period 
At the time of electing deferral, a Participant shall select the period of  
deferral from the deferral periods specified by the Company on its prescribed  
election form.  The period of deferral shall end, and distribution from the  
Participant's Account shall begin at the earliest of the Participant's death,  
retirement, or separation of service for any other reason unless the Company  
offers and the Participant selects some other deferral period. 
B. In-Service Distributions 
1. Fixed Term Election 
A Participant may elect to receive an in-service distribution on such date  
and upon such other terms as the Company specifies at the time of the  
Participant's deferral election provided that no fixed term election shall be  
for a deferral period of less than five years.  Each in-service distribution  
shall equal the amount in the account for the Plan Year for which the in- 
service distribution is elected.  Amounts remaining in the Participant's  
Account thereafter shall continue to accrue interest or Investment Return as  
the case may be. 
2. Unplanned Early Distribution 
Notwithstanding any other provisions of the Plan, by a written request filed  
with the Committee, a Participant, may elect to receive an immediate lump sum  
payment equal to the amount or a percentage of the amount deferred, or the  
actual amount in the Account, reduced by a penalty, which shall be forfeited  
to the Plan, equal to ten percent (10%) of the deferrals withdrawn in lieu of  
payments in accordance with the form previously elected by the Participant.   
The Amount remaining in the Participant's Account shall continue to earn  
credited interest, or Investment Return.  A participant electing such an  
early in service distribution shall be ineligible to make deferrals for the  
two succeeding Plan Years. 
C. Hardship Withdrawal 
If a Participant suffers an extreme financial hardship, the Committee, in its  
sole and absolute discretion and upon the Participant's written application,  
will determine whether to permit withdrawal from the Participant's Account or  
Accounts.  Any withdrawal that is permitted shall not exceed the amount of  
Salary, Incentive Compensation and dividend equivalents deferred by the  
Participant exclusive of credited interest or the actual amount in the  
Account, if less.  Requests for withdrawals are expected to be unusual, and  
the Committee will make all determinations regarding extreme financial  
hardship in a uniform, nondiscriminatory manner. 
The term "extreme financial hardship" shall mean a severe financial hardship  
to the Participant resulting from a sudden and unexpected illness or accident  
of the Participant or of a dependent (as defined in Section 152(A) of the  
Internal Revenue Code) of the Participant, loss of the Participant's property  
due to casualty, or other similar extraordinary and unforeseeable  
circumstances arising as a result of events beyond the control of the  
Participant.  The circumstances that will constitute an extreme financial  
hardship will depend upon the facts of each case, but, in any case, payment  
may not be made to the extent that such hardship is or may be relieved  
(1) through reimbursement or compensation by insurance or otherwise, (2) by  
liquidation of the Participant's assets, to the extent the liquidation of  
such assets would not itself cause severe financial hardship, or (3) by  
cessation of deferrals under the Plan.  Examples of what are not considered  
to be extreme financial hardships include the need to send a Participant's  
child to college or the desire to purchase a home. 
VII. Method of Distribution 
General Distribution Election Definitions 
Any amount a Participant elects to receive as an in service distribution  
shall be paid to the Participant in a single lump sum, or in such other  
optional form of payment as the Company may offer and the Participant may  
elect at the time of his deferral election.  Distribution of all other  
amounts credited to each Account of a Participant shall be made, as specified  
by the Participant at the time of electing deferral of the Salary, Incentive  
Compensation and dividend equivalents credited to the Account. The  
distribution election may be modified if, and only if, a written change of  
distribution election form is received by the Company no less than 12 months  
prior to the Participant's retirement or termination. As elected by the  
Participant, distribution shall be in fifteen, ten or five approximately  
equal annual installments  or in lump sum, or in such other payment form as  
offered by the Company and elected by the Participant at the time of electing  
deferral, except as otherwise provided in Article VIII and Article IX.  In  
the case of installment payments, all Participant account balances will be  
transferred to the Fixed Account at the value on the date of the first  
distribution. Interest at the fixed rate specified in Paragraph B of Article  
V shall be credited on all amounts remaining in the Participant's Account  
from which the installment payments are to be made.  
Notwithstanding anything in this Plan to the contrary, any payment made to a  
Participant or to his Beneficiary shall be paid according to the  
Participant's election after the distribution event that entitles the  
Participant or Beneficiary to such payment. 
VIII. Termination of Employment 
A. Accelerated Payment of Benefits 
If a Participant's employment with his Employer is terminated for any reason  
whatsoever all of the Participant's Accounts shall be paid to him in lump sum  
as soon as practicable thereafter, unless at least one year prior to  
termination, the Participant made a supplemental election of a termination  
distribution in either 5, 10, or 15 approximately equal annual installments   
as provided in Article VII, Paragraph B.  A Participant who has transferred  
to work for the Company or any of its subsidiaries, shall not be considered  
to have terminated employment with his Employer for purposes of this Article.   
However, any salary received from a subsidiary of the Company which is not an  
Employer under the Plan, shall not be deferred, despite any previous deferral  
election. Incentive Compensation paid by the prior Employer that the  
Participant elected to defer prior to the transfer will be deferred. 
B. Earnings 
The interest rate which shall apply to the Participant's Fixed Accounts shall  
be the Moody's Plus Rate specified in Paragraph B of Article V.  The earnings  
credited to the funds in other investment options shall be done in accordance  
with Section V(C).   
C. Disability 
A Participant who is unable to work due to Disability shall not be considered  
to have terminated employment for purposes of this Plan.  Any deferral  
election made by the Participant shall remain in effect to the extent that  
the Participant thereafter receives Salary or Incentive Compensation.   
Disability income received on account of Disability shall not be treated as  
Salary unless the Committee determines otherwise, taking into consideration  
the best interests of the Company. 
IX. Benefits on Death 
Distribution of benefits from each Account of a Participant shall begin as  
soon as practicable following the Participant's death in accordance with  
Paragraph A or B below, depending on whether the Participant dies before or  
after receiving benefits.  Each Account of a Participant shall be treated  
separately. 
A. Before Payments Have Begun 
If a Participant dies before payment from an Account has begun, other than  
any in service distributions made under Paragraph B(2) of Article VI, the  
Participant's Beneficiary will receive payment of the Participant's Account  
as soon as practicable after the Participant's death, as if the Participant  
had started to receive payment from the Account one day prior to his death.   
Payment to the Beneficiary shall be made in the same payment method as  
elected by the Participant, whether over fifteen, ten or five years, or in  
lump sum, or as otherwise permitted by the Company and elected by the  
Participant at the time of his deferral election or by subsequent election as  
permitted by the Plan.  
B. After Payments Have Begun 
If a Participant dies after beginning to receive payment from an Account,  
other than any in service distributions made under Paragraph B(2) of Article  
VI, the Participant's Beneficiary shall receive the remaining payments to be  
made from the Account if any.  
C. Designation of Beneficiary 
A Participant shall, as a condition of the right to make deferrals, designate  
a Beneficiary to receive the distributions described in Paragraph A or B  
above, whichever is applicable, following his death.  Beneficiary  
designations shall be on the form prescribed by the Company for this purpose  
and shall only be effective upon delivery to the Company before the  
Participant's death.  If a Participant designates a Beneficiary other than  
his spouse, his spouse's written consent to such designation must be obtained  
on the prescribed Beneficiary designation form.  A Participant may change his  
Beneficiary from time to time by delivering a new designation form to the  
Company.  If there is no designated beneficiary living at the time of a  
Participant's death, the estate of the deceased Participant shall be the  
Beneficiary. 
After a Participant's death, a designated Beneficiary who is to receive  
installment payments (not the Participant's estate) may designate a secondary  
beneficiary to receive any amounts due under this Plan to the Beneficiary in  
the event of the death of the Participant's designated Beneficiary prior to  
full payment to the Beneficiary.  If there is no designated secondary  
beneficiary living at the time of death of the Participant's designated  
Beneficiary and installment payments remain to be paid to the Participant's  
Beneficiary, the estate of the Participant's designated Beneficiary shall be  
the beneficiary of any distributions due to the Participant's designated  
Beneficiary under the Plan. 
D. Cash Out of Small Amounts 
Following a Participant's death, the Company shall distribute all amounts  
remaining in the Participant's Account if less than $10,000, but such cash- 
out shall not affect the timing or the amount of benefits payable under  
Paragraph B above. 
E. Modification of Payment Method 
Notwithstanding any other provisions of the Plan, by a written request filed  
with the Committee, a retired Participant, or Beneficiary of a deceased  
Participant receiving benefits from the decedents Deferral Account(s), may  
elect to receive an immediate lump sum payment of the balance of his Deferral  
Account(s), reduced by a penalty, which shall be forfeited to the Plan, equal  
to ten percent (10%) of the balance of such Account(s), in lieu of payments  
in accordance with the form previously elected by the Participant. 
X. Administration 
This Plan shall be administered by the Committee.  Subject to the express  
provisions of this Plan, the Committee shall have full and final authority to  
interpret the Plan, to prescribe, amend and rescind rules, regulations and  
guidelines relating to the Plan, and to make any other determinations it  
believes necessary or advisable for the administration of the Plan.  All  
decisions and determinations by the Committee shall be final and binding upon  
all parties.  No member of the Committee who is also a Participant in this  
Plan shall decide or vote on any matter that would affect such Participant in  
a manner materially different from other Participants. 
The Company's Senior  Human Resources Officer shall have discretionary  
authority with respect to administrative matters relating to this Plan,  
except when exercise of such authority would materially affect the cost of  
the Plan to the Employer, materially increase benefits to Participants, or  
affect such Senior Officer in a manner materially different from other  
Participants. 
XI. Amendment or Termination of the Plan 
The Committee may, in its sole discretion, suspend, amend or terminate this  
Plan at any time, in whole or in part.  However, such action shall be  
prospective only and shall not adversely affect the rights of any  
Participant, Beneficiary or Surviving Spouse to any amounts previously  
credited to a Participant's Account or Accounts under the Plan.  The  
Committee may increase or decrease the interest rate credited to  
Participants' Fixed Accounts, including Salary, Incentive Compensation and  
dividend equivalents previously deferred, but the rate shall not be decreased  
for periods prior to such action.  Any termination of the Plan shall not  
result in automatic payment of Accounts, and Participants' Accounts shall be  
paid under the terms of the Plan as in effect prior to termination.  However,  
in the event a final determination is made by a court of competent  
jurisdiction, or by the relevant tax authorities, and no appeal is taken  
therefrom, that amounts deferred under this Plan are taxable income to a  
Participant prior to the time they otherwise would be distributed under the  
Plan, the Committee may terminate the Plan as to such Participant and  
immediately pay to him, or on his death to his Beneficiary, all amounts that  
are so taxable. 
XII. Miscellaneous 
A. No Employment Right 
Nothing contained herein shall confer upon any Participant the right to be  
retained in employment by his Employer, nor will it interfere with the right  
of his Employer to discharge or otherwise deal with the Participant without  
regard to the existence of this Plan. 
B. Insurance 
As a condition of participation in this Plan, each Participant shall, if  
requested by the Company, undergo such examination and provide such  
information as may be required by the Company with respect to any insurance  
contracts on the Participant's life, and shall authorize the Company to  
purchase life insurance on his life, payable to the Company. 
If an insurance policy is invalidated because a Participant commits suicide  
during the two-year period beginning on the first day of the first Plan Year  
of such Participant's participation in the Plan, or if the Participant makes  
any material misstatement of information or nondisclosure of medical history,  
then no benefits will be payable hereunder to such Participant, his  
Beneficiary or his Surviving Spouse, other than payment of the amount of  
deferrals of Salary, Incentive Compensation and dividend equivalents then  
credited to the Participant's Accounts, without any interest, including  
interest theretofore credited under this Plan. 
C. Source of Payment 
This Plan is unfunded, and distributions shall be made solely on a current  
disbursement basis.  Each Participant, his Beneficiary and his Surviving  
Spouse shall be no more than unsecured general creditors of the Company, and  
nothing contained in this Plan shall be deemed to create a trust of any kind,  
for the benefit of any Participant, Beneficiary or Surviving Spouse, or  
create any fiduciary relationship between the Company and any Participant,  
Beneficiary, or Surviving Spouse with respect to any assets of the Company,  
including, but not limited to, any insurance policies which the Company may  
purchase on the life of the Participant. 
The Company, however, retains the right to establish reserves for the  
obligations hereunder including, but not limited to corporate owned life  
insurance, and assets held in a "Rabbi Trust."  Provided that in the event  
that the Chief Executive Officer determines that a change in control as  
defined in the Sempra Energy Long Term Incentive Plan, is imminent then  
assets shall be placed in the Deferred Compensation Trust which when combined  
with any assets then in the trust shall equal the full accrued liability  
under this Plan as determined by Towers and Perrin, or a successor actuarial  
firm.  
D. Withholding 
Each Participant, Beneficiary and Surviving Spouse to whom distribution is  
made shall make appropriate arrangements for the satisfaction of any federal,  
state, or local income tax withholding requirements, any social security or  
other employment tax requirements applicable to the payment of benefits under  
this Plan, and any payments the Participant agreed to make to the Company or  
to his Employer.  If no other arrangements are made, the Company may provide,  
at its discretion, for such withholding and tax payments as may be required. 
E. Nonassignment 
To the maximum extent permitted by law, no benefit under this Plan shall be  
assignable or subject in any manner to alienation, sale, transfer, claims of  
creditors, pledge, attachment or encumbrances of any kind. 
F. Governing Law 
This Plan is established under and will be construed according to the laws of  
the State of California to the extent that such laws are not preempted by the  
Employee Retirement Income Security Act of 1974, as amended. 
G. Effective Date 
This Plan is effective June 1, 1998.