ENOVA CORPORATION
1998 DEFERRED COMPENSATION AGREEMENT #3
THIS AGREEMENT is made and entered into this _____ day of
December, 1997, by and between Enova Corporation or any of its
subsidiaries (hereinafter "Company") and _________________________
(hereinafter "Participant"), an employee of Company.
WITNESSETH:
WHEREAS, Company desires to provide Participant with the
opportunity to defer base compensation and any Bonus that is
payable for services to be rendered in 1998 and 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 Participant's behalf as
Pretax Contributions to the San Diego Gas & Electric Company
Savings Plan, which has been adopted by Company ("Savings Plan");
and
WHEREAS, Company desires to match, as an additional Company
contribution, a percentage of the Participant's base compensation
and bonus deferred pursuant to this Agreement; and
WHEREAS, Participant and Company desire that the payment of a
portion of Participant'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
Company and Participant with respect to base compensation and
bonus which would otherwise be payable to Participant for services
rendered after such execution and shall continue in effect until
this Agreement is terminated as provided herein. Participant
shall be eligible to enter into this Agreement only if Participant
has elected the maximum Basic Contribution under the Savings Plan
for which Participant is eligible.
2. Company shall credit to an account on Company's books, in
Participant's name, that percentage of Participant's 1998 base
compensation (in equal biweekly installments of whole dollar
amounts) and bonus otherwise payable to Participant as may be
specified by Participant in this Agreement's Election Form. The
amount credited under this paragraph 2 may not exceed the
percentage of Participant's 1998 base compensation and 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 Participant
as After-tax Contributions or on Participant's behalf as Pretax
Contributions to the Savings Plan. Further, the amount credited
under this paragraph 2 shall be
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limited to an amount which, when added to Company'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
Participant'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 Participant's Pretax Contributions to the Savings
Plan. Company 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 Participant's
account under paragraph 2, Company shall also credit to
Participant's account, as a matching contribution, an amount equal
to the Company Matching Contributions that would have been
contributed on Participant's behalf to the Savings Plan, if any,
(reduced by Matching Contributions actually made to the Savings
Plan for Participant) 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 Participant's account an
additional amount equal to eight and sixty-eight one-hundredths
percent (8.68%) per annum computed on the balance in Participant's
account as of the end of each month. Company 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 Enova
Corporation 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 Participant's account pursuant to
paragraphs 2, 3, and 4 hereof shall be paid to Participant upon
his or her termination of services as an Participant in the form
and over the period specified by Participant on this Agreement's
Election Form; provided, however, the Company's Board of Directors
or Executive Compensation Committee may, in its sole discretion,
provide instead for payment of the amount in Participant's account
in a form and over a period determined by such Board or Committee
except that the Board or 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 Participant's death after installment
payments to Participant have commenced hereunder, installment
payments shall continue to be paid to the person(s) specified by
Participant on the Election Form for the remainder of the period
selected by Participant on the Election Form. In the event of
Participant's death before any payment has been made under this
Agreement, Participant's account shall be distributed or commence
to be distributed, as soon as administratively practicable after
Participant's death, to the person(s) specified by Participant on
this Agreement's Election Form in the form and over the period
selected on such Election Form. The Board or Committee may, in
its sole discretion, provide instead for payment of the amount in
Participant's account to Participant's beneficiary in a form and
over a period determined by the
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Board or Committee except that the Board or Committee's authority
and discretion to change the form or period of distribution shall
terminate upon such a "change-in-control."
If Participant'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 Participant's
account, all undistributed income on such account shall be
distributed to the spouse's estate. Upon the death of
Participant's beneficiary, the balance in Participant'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 Company or, if no
designation is made, to the beneficiary's estate.
Notwithstanding the foregoing, a Participant (or former
Participant whose services have terminated, hereinafter referred
to in this paragraph as Participant) may, at any time, elect to
withdraw all or a portion of the balance in the Participant's
account prior to the time such amount is otherwise due and
payable, subject to a withdrawal penalty (the amount to be
withdrawn prior to the application of the withdrawal penalty shall
be referred to as the Gross Withdrawal Amount, which may not
exceed the balance of the account immediately prior to the
withdrawal). The Participant shall make this election by filing a
written notice with the Committee on a form provided by the
Committee. Within thirty days following the Committee's receipt
of such notice, an amount equal to 90% of the Gross Withdrawal
Amount (less applicable withholding tax) shall be paid to the
Participant in a cash lump sum. Upon payment of such withdrawal,
(a) a withdrawal penalty equal to 10% of the Gross Withdrawal
Amount shall be permanently forfeited, and the Company shall have
no obligation to the Participant or the Participant's spouse or
beneficiary with respect to such forfeited amount and (b) the
Participant shall be ineligible to have any additional bonus or
base compensation amounts credited to the Participant's account
pursuant to this Agreement (or any subsequent Deferred
Compensation Agreement) for the balance of the calendar year of
withdrawal and the subsequent calendar year.
7. All amounts credited to Participant's account pursuant to
paragraphs 2, 3 and 4 hereof may be used to purchase common stock
of Enova Corporation or other equity securities, subject to the
following conditions:
a. All such purchases must be made through a stock
equivalent tracking device, a rabbi trust or other similar
instrument that causes the deferred amount not to become taxable;
b. Equity securities of other entities may be purchased
only if the Participant has met or is expected to meet, under the
normal course of events, the Company's Enova Corporation stock
ownership requirement;
c. If the Participant becomes subject to a higher Enova
Corporation stock ownership requirement, the Participant may
retain any then current investment in equity securities of other
entities, but shall not make additional purchases of other equity
securities until
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the higher Enova Corporation stock ownership requirement has been
met or is expected to be met under the normal course of events;
and
d. All such purchases must be made in accordance with
applicable Company procedures, as they may be amended from time to
time.
8. No amounts credited to Participant's account may be
assigned, transferred, encumbered, or made subject to any legal
process for the payment of any claim against Participant,
Participant's spouse or other beneficiary. In no event shall
Participant, Participant's spouse, or other beneficiary have the
right to recover any amount credited to Participant's account
other than in accordance with this Agreement.
9. 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 Company and Participant or any other person.
To the extent that any person acquires a right to receive payments
from Company under this Agreement, such right shall be no greater
than the right of any unsecured general creditor of Company.
Except as provided in paragraph 7 of this Agreement, title to and
beneficial ownership of any assets, whether cash or investments,
which Company may earmark to pay the deferred compensation
hereunder, shall at all times remain assets of Company and neither
Participant nor any other person shall, under this Agreement, have
any property interest whatsoever in any specific assets of
Company.
10. The existence of this Agreement shall not confer upon
Participant the right to continue to serve as an officer or
employee for any period of time.
11. This Agreement shall be deemed to modify any provisions
in an employment agreement between Participant and Company
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.
12. This Agreement may be terminated by Company upon thirty
days' written notice to Participant. This Agreement will also
terminate upon Participant'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 Participant 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
Participant's Deferred Compensation Agreement Election Form and
Section 4 of this Agreement.
13. Participant acknowledges that Participant has been
advised that Participant may confer with and seek advice from a
tax or financial advisor of Participant's choice concerning this
deferral. Participant further acknowledges that Participant has
not received tax advice from Company nor has Participant relied
upon information provided by Company 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.
PARTICIPANT COMPANY
_______________________________ By ______________________________
Signature of Participant Company _________________________
Title ___________________________
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