ENOVA CORPORATION
1986 LONG-TERM INCENTIVE PLAN
1997 RESTRICTED STOCK AWARD AGREEMENT
_______________________________________________
THIS RESTRICTED STOCK AWARD AGREEMENT (the "Agreement") is
entered into this _____ day of _________________, 1997, by and
between ENOVA CORPORATION, a California corporation ("Enova") and
_____________ ("Participant").
WHEREAS, the Boards of Directors of Enova and San Diego Gas &
Electric Company ("SDG&E") ("the Boards") have adopted the Enova
Corporation 1986 Long-Term Incentive Plan (the "Plan"), which
provides for the granting to selected employees of Enova and its
subsidiaries of awards of Common Stock of Enova Corporation
("Restricted Stock Awards");
WHEREAS, the grant of Restricted Stock Awards is intended as an
incentive which will attract and retain highly competent persons as
officers and key employees of Enova and its subsidiaries;
WHEREAS, Participant is a selected employee of Enova and/or one
of its subsidiaries; and
WHEREAS, the Executive Compensation Committees of the Boards of
Enova and SDG&E (the "Committees") have authorized, and the Boards
have approved, the grant of a Restricted Stock Award to Participant
pursuant to the terms of the Plan.
NOW, THEREFORE, in consideration of the foregoing and of the
mutual covenants hereinafter set forth and other good and valuable
consideration, the receipt of which is hereby acknowledged, the
parties hereto agree as follows:
1. GRANT OF RESTRICTED STOCK AWARD
Enova hereby grants to Participant, on the terms, conditions
and restrictions hereinafter set forth, and in accordance with
the Plan which is incorporated herein, as a matter of separate
inducement to achieve a certain goal set by the Boards and not
in lieu of any salary or other compensation for Participant's
services, a Restricted Stock Award consisting of _____________
shares of the authorized but unissued shares of Enova
Corporation Common Stock, (the "Shares").
2. RECEIPT AND TRANSFER OF SHARES
Participant hereby acquires the Shares, and Enova hereby
transfers the Shares to Participant. Concurrently with the execution
hereof, Enova has delivered to Participant, and Participant
acknowledges receipt into escrow of, a certificate or certificates
evidencing the Shares, duly issued to Participant by Enova
Corporation. Concurrently with the execution hereof, Participant
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acknowledges that the Secretary or Assistant Secretary of Enova,
holds on behalf of Participant all certificates evidencing the
Shares. Participant also acknowledges prior receipt of a prospectus
for the Plan, a copy of the Plan, and the most recent Annual Report
of Enova Corporation. Participant shall execute all such stock
powers and other instruments of transfer in favor of Enova as are
necessary at any time in the future to perform this contract.
3. SHAREHOLDER OF RECORD
Enova agrees that Participant shall be deemed a shareholder of
record with respect to the Shares on the date first written above.
4. RESTRICTED TERM
The Restricted Term with respect to the Shares shall commence
on the date first above written. The restrictions will be removed
and the restricted term will expire on one quarter of such
restricted shares after the end of each of the years 1998, 1999,
2000 and 2001:
a. If, at the end of each of such year San Diego Gas &
Electric Company has earned the CPUC authorized rate of return on
rate base.
b. If, beginning in 1999 at the end of any quarter, San Diego
Gas & Electric Company meets or exceeds it authorized rate of return
for the twelve months then ending.
c. At the end of 2001, the remaining restricted shares not
released previously may be released in the discretion of the Board
dependent upon the impact on 1998 through 2001 earnings of industry
and corporate restructuring during such period.
d. The Board of each Corporation, in response to industry or
corporate restructuring, may elect to change the Plan design and
performance goals to align the Plan with a new long term direction.
5. VOTING AND OTHER RIGHTS
During the Restricted Term, Participant shall, except as
otherwise provided herein, have all of the rights of a stockholder
with respect to all of the Shares subject to the Restricted Term,
including without limitation the right to vote such Shares and the
right to receive all dividends or other distributions with respect
to such Shares. In connection with the payment of such dividends or
other distributions, there shall be deducted any taxes or other
amounts required by any governmental authority to be withheld and
paid over to such authority for the account of Participant.
6. RESTRICTIONS ON INTER VIVOS TRANSFER
During the Restricted Term, the Shares subject to the
Restricted Term shall not be sold, assigned, transferred,
hypothecated or otherwise alienated, disposed of or encumbered
except as
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provided in the Plan. The certificate for such Shares shall bear
the following legend, or any other similar legend as may be required
by Enova:
"THE SHARES OF STOCK REPRESENTED BY THIS CERTIFICATE MAY NOT BE
SOLD, ASSIGNED, TRANSFERRED, PLEDGED, HYPOTHECATED OR
OTHERWISE ENCUMBERED OR DISPOSED OF EXCEPT AS PERMITTED BY
ENOVA CORPORATION'S 1986 LONG-TERM INCENTIVE PLAN OR THE
COMMITTEE WHICH ADMINISTERS THAT PLAN."
7. TERMINATION OF PARTICIPANT'S EMPLOYMENT
In the event Participant ceases to be employed by Enova and/or
one of its subsidiaries at any time before the end of the Restricted
Term for any reason, Participant shall deliver to Enova all
certificates evidencing the Shares subject to the Restricted Term,
accompanied by stock powers and other instruments of transfer duly
executed by Participant to transfer such shares to Enova.
8. ELECTION TO RECOGNIZE INCOME
Check one:
a. ___ Participant elects, pursuant to the Internal Revenue
Code as amended, and the comparable provisions of state tax law, to
include in gross income in connection with the grant of this
Restricted Stock Award, all amounts now recognizable.
b. ___ Participant shall not elect, pursuant to the Internal
Revenue Code as amended, or comparable provisions of any state tax
law, to include any amount in gross income in connection with the
grant of this Restricted Stock Award.
9. WITHHOLDING AND REGISTRATION
a. Upon recognition of income as elected in paragraph 8 above,
Participant shall, with respect to such Shares, make payment, in the
form of cash or a cashier's check or in the manner stated in
paragraph 9(b) below, to Enova in an amount sufficient to satisfy
any taxes or other amounts Enova determines is required by any
governmental authority to be withheld and paid over by Enova or any
of its subsidiaries to such authority for the account of Participant
(collectively, "Withholding Taxes"), or shall otherwise make
arrangements satisfactory to Enova for the payment of such amounts
through withholding or otherwise. For purposes of paragraph 8(a),
such payment or arrangements shall be made by December 5, 1997. For
purposes of paragraph 8(b), the date shall be 30 days after the
restrictions are removed. Participant shall, if requested by Enova,
make appropriate representations in a form satisfactory to Enova
that such Shares will not be sold other than pursuant to an
effective registration statement under the Securities Act of 1933,
as amended, or an applicable exemption from the registration
requirements of such Act.
b. Subject to the restrictions set forth in paragraph 9(c) and
such rules as the Committee may from time to time adopt and upon
approval by the Committee in its sole discretion,
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Participant may elect to satisfy all or any portion of such
Participant's tax withholding obligations set forth in paragraph
9(a) by electing (i) to have Enova withhold from delivery of any
Shares otherwise deliverable to Participant in the manner set forth
in paragraph 10 hereof, a portion of such Shares to satisfy
Withholding Taxes or (ii) to deliver to Enova shares of Common
Stock, no par value, of Enova, other than those delivered to
Participant in the manner set forth in paragraph 10 hereof, to
satisfy all or any portion of such Participant's Withholding Taxes.
The number of Shares withheld from delivery or such other shares
delivered shall equal the number of shares the Committee, in its
sole discretion, determines to have a fair market value equal to the
amount of such Participant's Withholding Taxes required to be
withheld or paid over by Enova or any of its subsidiaries and which
Participant elected to be satisfied by withholding or delivery of
shares.
c. Participant's election to satisfy all or any portion of
Participants Withholding Taxes under paragraph 9(b) is subject to
the following restrictions:
(i) such election must be made in writing on or before the
date when the amount of Withholding Taxes is required to be
determined (the "Tax Date");
(ii) such election shall be irrevocable;
(iii) such election shall be subject to the approval or
disapproval of the Committee, in its sole discretion;
(iv) the fair market value of the Shares to be withheld or
other shares of Common Stock to be delivered to Enova for the
purposes of satisfying all or any portion of such Participant's
Withholding Taxes shall be deemed to be the average of the
highest and lowest selling prices of such stock as reported on
the New York Stock Exchange Composite Transactions Tape on the
Tax Date, or if such stock is not traded that day, then on the
next preceding day on which such stock was traded; and
(v) if Participant is or becomes subject to Section 16(b)
of the Securities Exchange Act of 1934, as amended (the "1934
Act"), such election must be made in compliance with Rule 16b-
3(e) promulgated under said Section 16(b) or any successor
regulation promulgated thereunder.
10. DELIVERY OF SHARES
Upon expiration of the Restricted Term applicable to any
shares as provided in the manner stated in paragraph 4 above and
payment by the Participant as required in paragraph 9 above, the
Secretary or Assistant Secretary of Enova shall deliver to
Participant all certificates evidencing the Shares free of legend
and no longer subject to the Restricted Term and all restrictions
set forth herein with respect to such Shares shall terminate.
If at the end of 2001 the restrictions have not been removed
from and the Restricted Term has not expired on any of the shares
received by Participant under this Agreement, Participant shall
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deliver to Enova all certificates evidencing such shares accompanied
by stock powers and other instruments of transfer duly executed by
Participant to transfer such shares to Enova.
11. EFFECTS ON PARTICIPANT'S CONTINUED EMPLOYMENT
Participant's right, if any, to continue to serve Enova and/or
its subsidiaries as an officer or employee shall not be enlarged or
otherwise affected by the grant to him or her of this Restricted
Stock Award, nor shall such grant in any way restrict the right of
Enova and/or any of its subsidiaries to terminate Participant's
employment at any time.
12. FURTHER ACTION
Each party hereto agrees to perform any further acts and to
execute and deliver any documents which may be reasonably necessary
to carry out the provisions hereof.
13. PARTIES IN INTEREST AND GOVERNING LAW
This Agreement shall be binding upon and inure to the benefit
of the parties hereto and their respective assigns and successors-
in-interest, and shall be governed by and interpreted in accordance
with the laws of the State of California.
14. ENTIRE AGREEMENT
This Agreement contains the entire agreement and understanding
between the parties as to the subject matter hereof.
15. INVALID PROVISIONS
The invalidity or unenforceability of any particular provision
hereto shall not affect the other provisions hereof, and this
Agreement shall be construed in all respects as if such invalid or
unenforceable provisions were omitted.
16. AMENDMENT
No amendment or modification hereof shall be valid unless it
shall be in writing and signed by both parties hereto.
17. COUNTERPARTS
This Agreement may be executed in counterparts, each of which
shall be deemed to be an original, and taken together shall
constitute one and the same document.
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18. NOTICES
All notices or other communications required or permitted
hereunder shall be in writing, and shall be sufficient in all
respects only if delivered in person or sent via certified mail,
postage prepaid, addressed as follows:
If to Enova: Enova Corporation
P. O. Box 129400
San Diego, CA 92112-9400
Attention: Corporate Secretary
If to Participant: ________________________________________
________________________________________
________________________________________
or such other address as shall be furnished in writing by any such
party. Any such notice or communication shall be deemed to have
been delivered when delivered in person or 48 hours after the date
it has been mailed in the manner described above.
IN WITNESS WHEREOF, the parties hereto have executed this
Restricted Stock Award Agreement on the day and year first above
written.
PARTICIPANT ENOVA CORPORATION
________________________________ By: ___________________________
Signature of Participant
Title: ________________________
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