View:
As filed with the Securities and Exchange Commission on May 30, 1995.
Registration No. 33-_______________
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM S-8
REGISTRATION STATEMENT
under
The Securities Act OF 1933
SAN DIEGO GAS & ELECTRIC COMPANY
(Exact name of registrant as specified in its charter)
California 95-1184800
______________________________ ______________________________
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
101 Ash Street
San Diego, California 92101
______________________________ ______________________________
(Address of Principal (Zip Code)
Executive Offices)
THE SAVINGS PLAN OF SAN DIEGO GAS & ELECTRIC COMPANY
______________________________________________________
(Full title of the plan)
N. A. PETERSON
Senior Vice President,
General Counsel and Secretary
San Diego Gas & Electric Company
101 Ash Street
San Diego, California 92101
(619) 696-2000
______________________________
(Name, address and telephone
number, including area code,
of agent for service)
CALCULATION OF REGISTRATION FEE
Title of Amount Proposed Maximum Proposed Amount of
Securities To To Be Offering Price Maximum Aggregate Registration
Be Registered Registered per Share(1) Offering Price(1) Fee
Common Stock, 9,000,000 $21.375 $192,375,000 $66,337
without par shares
value
Plan Interests(2)
(1)Estimated solely for the purpose of calculating the registration fee on
the basis of the average of the high and low prices for the Registrant's
Common Stock as reported on the New York Stock Exchange on May 24, 1995.
(2)Pursuant to Rule 416(c) under the Securities Act of 1933, this Registration
Statement covers an indeterminate amount of interests to be offered or sold
pursuant to the employee benefit plan described herein.
_________________
This Registration Statement shall become effective upon filing in accordance
with Rule 462 under the Securities Act of 1933.
PART I
INFORMATION REQUIRED IN THE SECTION 10(a) PROSPECTUS
*Item 1 . Plan Information.
*Item 2 . Registrant Information and Employee Plan Annual
Information.
_______________________
* Information required by Part I to be contained in the
Section 10(a) prospectus is omitted from this Registration
Statement in accordance with Rule 428 under the Securities
Act of 1933 and the Note to Part I of Form S-8.
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
Item 3 . Incorporation of Certain Documents by Reference.
The following documents, filed by San Diego Gas & Electric
Company (the "Registrant") or The Savings Plan of San Diego Gas
& Electric Company (the "Plan") with the Securities and Exchange
Commission (the "SEC"), are incorporated by reference in this
Registration Statement:
(a) The Registrant's Annual Report on Form 10-K for the
year ended December 31, 1994; and (i) The Plan's
Annual Report on Form 11-K for the year ended June 30,
1994 and (ii) the Plan's Transition Report on Form 11-
K for the six-month period ended December 31, 1994;
(b) All other reports filed pursuant to Section 13(a) or
15(d) of the Securities Exchange Act of 1934 (the
"Exchange Act") since December 31, 1994; and
(c) The description of the Registrant's common stock,
without par value (the "Common Stock"), contained in
the Registrant's most recent registration statement
for the Common Stock filed under the Exchange Act
(File No. 1-3779), including any amendment or report
filed for the purpose of updating such description.
In addition, all documents subsequently filed by Registrant
or the Plan pursuant to Sections 13(a), 13(c), 14 and 15(d) of
the Exchange Act, prior to the filing of a post-effective
amendment which indicates that all securities offered have been
sold or which deregisters all securities then remaining unsold,
shall be deemed to be incorporated by reference in this Regis-
tration Statement and to be a part hereof from the date of
filing of such documents.
2
Item 4 . Description of Securities.
Not applicable.
Item 5 . Interests of Named Experts and Counsel.
N. A. Peterson, Senior Vice President, General Counsel and
Secretary of the Registrant, has provided an opinion regarding
originally issued shares of the Registrant's Common Stock which
may be issued in connection with the Plan. As of March 1, 1995,
Mr. Peterson held beneficial ownership of 11,064 shares of the
Registrant's Common Stock and was a participant in the Plan
(with 23 shares of Common Stock credited to his Plan account).
Item 6 . Indemnification of Directors and Officers.
Section 317 of the Corporations Code of the State of
California permits a corporation to provide indemnification to
its directors and officers under certain circumstances. The
Restated Articles of Incorporation and the Restated Bylaws of
the Registrant eliminate the liability of directors for monetary
damages to the fullest extent permissible under California law
and provide that indemnification for liability for monetary
damages incurred by directors, officers and other agents of the
Registrant shall be allowed, subject to certain limitations, in
excess of the indemnification otherwise permissible under
California law. The Registrant maintains liability insurance,
and the Registrant is also insured against loss for which it may
be required or permitted by law to indemnify its directors and
officers for their related acts.
Item 7 . Exemption from Registration Claimed.
Not applicable.
Item 8 . Exhibits.
See Index to Exhibits.
The Registrant undertakes that it has submitted or will
submit the Plan and any amendment thereto to the Internal
Revenue Service (the "IRS") in a timely manner and has made or
will make all changes required by the IRS in order to qualify
the Plan under the Employee Retirement Income Security Act of
1974, as amended.
Item 9 . Undertakings.
(a) The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or
sales are being made, a post-effective amendment to this
Registration Statement:
3
(i) To include any prospectus required by
Section 10(a)(3) of the Securities Act of 1933;
(ii) To reflect in the prospectus any facts or
events arising after the effective date of this Regis-
tration Statement (or the most recent post-effective
amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the in-
formation set forth in this Registration Statement;
(iii) To include any material information with
respect to the plan of distribution not previously
disclosed in this Registration Statement or any
material change to such information in this Registra-
tion Statement;
provided, however, that paragraphs (a)(1)(i) and (a)(1)(ii)
above do not apply if the information required to be
included in a post-effective amendment by those paragraphs
is contained in periodic reports filed by the Registrant
pursuant to Section 13 or Section 15(d) of the Exchange Act
that are incorporated by reference in this Registration
Statement.
(2) That, for the purpose of determining any
liability under the Securities Act of 1933, each such post-
effective amendment shall be deemed to be a new registra-
tion statement relating to the securities offered therein,
and the offering of such securities at that time shall be
deemed to be the initial bona fide offering thereof.
(3) To remove from registration by means of a post-
effective amendment any of the securities being registered
which remain unsold at the termination of the offering.
(b) The Registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each
filing of the Registrant's annual report pursuant to
Section 13(a) or Section 15(d) of the Exchange Act (and each
filing of the Plan's annual report pursuant to Section 15(d) of
the Exchange Act) that is incorporated by reference in this
Registration Statement shall be deemed to be a new registration
statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be
the initial bona fide offering thereof.
(c) Insofar as indemnification for liabilities arising
under the Securities Act of 1933 may be permitted to directors,
officers and controlling persons of the Registrant pursuant to
the foregoing provisions, or otherwise, the Registrant has been
advised that in the opinion of the SEC such indemnification is
against public policy as expressed in the Act and is, therefore,
unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the
4
Registrant of expenses incurred or paid by a director, officer
or controlling person of the Registrant in the successful
defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the
securities being registered, the Registrant will, unless in the
opinion of its counsel the matter has been settled by
controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is
against public policy as expressed in the Act and will be
governed by the final adjudication of such issue.
5
SIGNATURES
The Registrant
Pursuant to the requirements of the Securities Act of 1933,
the Registrant certifies that it has reasonable grounds to
believe that it meets all of the requirements for filing on
Form S-8 and has duly caused this Registration Statement to be
signed on its behalf by the undersigned, thereunto duly autho-
rized, in the City of San Diego, State of California, on May 30,
1995.
SAN DIEGO GAS & ELECTRIC COMPANY, a
California corporation
By: /s/ N. A. Peterson
--------------------------
N. A. Peterson
Senior Vice President,
General Counsel and Secretary
Pursuant to the requirements of the Securities Act of 1933,
this Registration Statement has been signed by the following
persons in the capacities and on the date indicated:
Signature Title Date
--------- ----- ----
* /s/ Thomas A. Page Chairman of the Board, Chief May 30, 1995
- ---------------------------- Executive Officer and
Thomas A. Page President (Principal Executive
Officer)
* /s/ Stephen L. Baum Executive Vice President May 30, 1995
- ---------------------------- (Principal Financial Officer)
Stephen L. Baum
* /s/ Frank H. Ault Vice President and Controller May 30, 1995
- ---------------------------- (Principal Accounting Officer)
Frank H. Ault
*/s/ Richard C. Atkinson Director May 30, 1995
- ----------------------------
Richard C. Atkinson
* /s/ Ann Burr Director May 30, 1995
- ----------------------------
Ann Burr
6
* /s/ Richard A. Collato Director May 30, 1995
- ----------------------------
Richard A. Collato
* /s/ Daniel W. Derbes Director May 30, 1995
- ----------------------------
Daniel W. Derbes
*/s/Catherine T. Fitzgerald Director May 30, 1995
- ----------------------------
Catherine T. Fitzgerald
*/s/ Robert H. Goldsmith Director May 30, 1995
- ----------------------------
Robert H. Goldsmith
* /s/ William D. Jones Director May 30, 1995
- ----------------------------
William D. Jones
* /s/ Ralph R. Ocampo Director May 30, 1995
- ----------------------------
Ralph R. Ocampo
* /s/ Thomas C. Stickel Director May 30, 1995
- ----------------------------
Thomas C. Stickel
* By: /s/ N. A. Peterson
- ----------------------------
Attorney in Fact
7
The Plan
Pursuant to the requirements of the Securities Act of 1933,
the members of the Savings Plan Committee of the Registrant have
duly caused this Registration Statement to be signed on its
behalf by the undersigned, thereunto duly authorized, in the
City of San Diego, State of California, on May 30, 1995.
* /s/ Frank H. Ault * /s/ Stephen L. Baum
- ----------------------------- ------------------------------------
Frank H. Ault, Chairman Stephen L. Baum
* /s/ Gary D. Cotton * /s/ Donald E. Felsinger
- ----------------------------- ------------------------------------
Gary D. Cotton Donald E. Felsinger
* /s/ Margot A. Kyd * /s/ Thomas A. Page
- ----------------------------- -----------------------------------
Margot A. Kyd Thomas A. Page
* By: /s/ N. A. Peterson
- -----------------------------
Attorney in Fact
8
INDEX TO EXHIBITS
Exhibit Sequentially
Number Exhibit Numbered Page
- ------ ------- -------------
*4.1 Registrant's Restated Articles of --
Incorporation (4/26/94).
**4.2 Registrant's Registered Bylaws --
(12/20/93).
5 Opinion of N. A. Peterson, 10
General Counsel of San Diego
Gas & Electric Company, regarding the
legality of original issue
securities to be offered.
24.1 Consent of Deloitte & Touche 11
LLP, Independent Auditors.
24.2 Consent of N. A. Peterson --
(included as part of Exhibit
5.).
25.1 Power of Attorney for Members of 12
the Board of Directors of San
Diego Gas & Electric Company.
25.2 Power of Attorney for Members of 13
the Savings Plan Committee of
San Diego Gas & Electric Company.
99.1 Savings Plan of Registrant. 14
_________
* Incorporated by reference from Registrant's Quarterly Report on
Form 10-Q for the quarter ended March 31, 1994.
** Incorporated by reference from Registrant's Annual Report on
Form 10-K for the year ended December 31, 1993.
9
EXHIBIT 5 May 30, 1995 San Diego Gas & Electric Company 101 Ash Street San Diego, CA 92101 Re: Registration Statement on Form S-8 Gentlemen: With reference to the Registration Statement on Form S-8 to be filed by San Diego Gas & Electric Company, a California corporation (the "Company"), with the Securities and Exchange Commission under the Securities Act of 1933 relating to 9,000,000 shares of the Company's Common Stock and an indeterminate amount of interests issuable pursuant to the Savings Plan of the Company (the "Plan"), it is my opinion that such shares of the Common Stock of the Company as shall be original issue securities, when issued and sold in accordance with the Plan, will be legally issued, fully paid and nonassessable. I hereby consent to the filing of this opinion with the Securities and Exchange Commission as Exhibit 5 to the Registra- tion Statement. Very truly yours, /s/ N. A. Peterson 10
EXHIBIT 24.1 INDEPENDENT AUDITORS' CONSENT We consent to the incorporation by reference in this Registration Statement of San Diego Gas & Electric Company on Form S-8 of our reports dated February 27, 1995 (which reports contain an emphasis paragraph referring to the Company's consideration of alternative strategies for its 80 percent owned subsidiary, Wahlco Environmental Systems, Inc.), appearing in and incorporated by reference in the Annual Report on Form 10-K of San Diego Gas & Electric Company for the year ended December 31, 1994. /s/ DELOITTE & TOUCHE LLP San Diego, California May 30, 1995 11
EXHIBIT 25.1 POWER OF ATTORNEY KNOW ALL MEN AND WOMEN BY THESE PRESENTS, that each of the undersigned constitutes and appoints David R. Clark and Nad A. Peterson, and each of them, his or her true and lawful attorneys-in-fact and agents, each with full power of substitution and resubstitution, for him or her and in his or her name, place and stead, in any and all capacities, to execute a Registration Statement on Form S-8 and any and all amendments and supplements thereto under the Securities Act of 1933, as amended, with respect to the Saving Plan (the "Plan") of San Diego Gas & Electric Company, a California corporation ("SDG&E"), which Registration Statement shall register the offer and sale of additional common stock of SDG&E and Plan interests pursuant to the Plan, and to file the same, with exhibits thereto and other documents in connection therewith, with the Securities and Exchange Commission, granting unto said attorneys-in-fact and agents, and each of them, full power and authority to do and perform each and every act and thing requisite and necessary to be done, as fully to all intents and purposes as he or she might or could do in person, hereby ratifying and confirming all that each of said attorneys-in-fact and agents or his or her substitute or substitutes may lawfully do or cause to be done by virtue hereof. Dated: April 25, 1995 /s/ Thomas A. Page ------------------------------ Thomas A. Page Dated: April 25, 1995 /s/ Richard C. Atkinson ------------------------------ Richard C. Atkinson Dated: April 25, 1995 /s/ Ann Burr ------------------------------ Ann Burr Dated: April 25, 1995 /s/ Richard A. Collato ------------------------------- Richard A. Collato Dated: April 25, 1995 /s/ Daniel W. Derbes ------------------------------- Daniel W. Derbes Dated: April 25, 1995 /s/ Catherine T. Fitzgerald ------------------------------- Catherine T. Fitzgerald Dated: April 25, 1995 /s/ Robert H. Goldsmith ------------------------------- Robert H. Goldsmith Dated: April 25, 1995 /s/ William D. Jones ------------------------------ William D. Jones Dated: April 25, 1995 /s/ Ralph R. Ocampo ----------------------------- Ralph R. Ocampo Dated: April 25, 1995 /s/ Thomas C. Stickel ----------------------------- Thomas C. Stickel 12
EXHIBIT 25.2 POWER OF ATTORNEY KNOW ALL MEN AND WOMEN BY THESE PRESENTS, that each of the undersigned constitutes and appoints David R. Clark and Nad A. Peterson, and each of them, his or her true and lawful attorneys-in-fact and agents, each with full power of substitution and resubstitution, for him or her and in his or her name, place and stead, in any and all capacities, to execute a Registration Statement on Form S-8 and any and all amendments and supplements thereto under the Securities Act of 1933, as amended, with respect to the Saving Plan (the "Plan") of San Diego Gas & Electric Company, a California corporation ("SDG&E"), which Registration Statement shall register the offer and sale of additional common stock of SDG&E and Plan interests pursuant to the Plan, and to file the same, with exhibits thereto and other documents in connection therewith, with the Securities and Exchange Commission, granting unto said attorneys-in-fact and agents, and each of them, full power and authority to do and perform each and every act and thing requisite and necessary to be done, as fully to all intents and purposes as he or she might or could do in person, hereby ratifying and confirming all that each of said attorneys-in-fact and agents or his or her substitute or substitutes may lawfully do or cause to be done by virtue hereof. Dated: May 5, 1995 /s/ Frank H. Ault ------------------------ Frank H. Ault Dated: May 4, 1995 /s/ Stephen L. Baum ------------------------ Stephen L. Baum Dated: May 5, 1995 /s/ Gary D. Cotton ------------------------- Gary D. Cotton Dated: May 4, 1995 /s/ Donald E. Felsinger --------------------------- Donald E. Felsinger Dated: May 9, 1995 /s/ Margot A. Kyd ---------------------------- Margot A. Kyd 13
Exhibit 99.1
April 21, 1995
SAN DIEGO GAS & ELECTRIC COMPANY SAVINGS PLAN
As Amended and Restated
Effective December 1, 1994
TABLE OF CONTENTS
Page
----
1. DEFINITIONS 2
1.1 Accounts 2
1.2 Administrator 2
1.3 After-tax Basic Contributions 2
1.4 After-tax Optional Contributions 2
1.5 Basic Contributions 3
1.6 Beneficiary 3
1.7 Board of Directors 3
1.8 Code 3
1.9 Committee 3
1.10 Company 3
1.11 Company Matching Contributions 3
1.12 Compensation 4
1.13 Controlled Group 6
1.14 Effective Date 6
1.15 Election Effective Date 6
1.16 Eligible Basic Contribution Percentage 6
1.17 Eligibility Computation Period 7
1.18 Eligible Employee 7
1.19 Employee 7
1.20 Employment Commencement Date 8
1.21 Entry Date 8
1.22 ERISA 8
1.23 Family Member 8
1.24 Forfeitures 8
1.25 Funds 8
1.26 Highly Compensated Employee 8
1.27 Hour of Service 11
1.28 Invested Primarily in Stock 12
1.29 Leased Employee 12
1.30 Non-Highly Compensated Employee 13
1.31 Notice 13
1.32 One-Year Break in Service 13
1.33 Optional Contributions 13
1.34 Participant 14
1.35 Pension Plan 14
1.36 Period of Severance 14
1.37 Plan 14
1.38 Plan Year 14
1.39 Pretax Basic Contributions 14
1.40 Pretax Optional Contributions 15
1.41 Reemployment Commencement Date 15
1.42 Retirement 15
1.43 SDG&E 15
1.44 Service 15
1.45 Severance from Service 16
1.46 Stock 16
1.47 Termination of Service 17
1.48 TRESOP 17
1.49 Trust 17
i
1.51 Trustee 17
1.52 Vested Right 17
1.53 Year of Service 17
2. PARTICIPATION 17
2.1 Entry into Plan 17
2.2 Enrollment in Plan 18
2.3 Plan Participation by Rehired Employees 18
2.4 Leaves of Absence: 19
2.5 Participation in the Plan 20
2.6 Transfer from TRESOP 20
3. BASIC AND OPTIONAL CONTRIBUTIONS 21
3.1 Individual Accounts 21
3.2 Pretax and After-tax Basic Contributions 21
3.3 Pretax and After-tax Optional Contributions 22
3.4 Limits on Pre-tax Basic and Optional
Contributions 23
3.5 Discontinuance of Pretax and After-tax Basic
Contributions 26
3.6 Discontinuance of Pretax and After-tax Optional
Contributions 27
3.7 Change of Pretax and After-tax Basic
Contributions 27
3.8 Change of Pretax and After-tax Optional
Contributions 28
3.9 Withdrawal of Basic and Optional Contributions
Accounts 28
3.10 Payment to Trustee 29
4. COMPANY MATCHING CONTRIBUTIONS; LIMITATION ON AFTER-TAX
CONTRIBUTIONS 29
4.1 In General 29
4.2 Allocation of Company Matching Contributions 29
4.3 Payment to Trustee 30
4.4 Limitation on Matching Contributions and
After-tax Contributions 30
5. INVESTMENTS 35
5.1 Investment of Contributions 35
5.2 Fund Transfers 36
5.3 Right to Diversify Accounts 36
5.4 Protection of Participants' Rights 37
5.5 Voting of Stock 38
5.6 Valuation of Funds 39
5.7 Valuation of Stock 39
ii
6. ALLOCATION LIMITATIONS 39
6.1 General Rule 39
6.2 Annual Additions 40
6.3 Participation in Additional Defined Contribution
Plan 42
6.4 Participation in Additional Defined Benefit Plan 42
6.5 Treatment of Excess Allocations 45
6.6 Limitation Compensation 46
7. VESTING OF COMPANY CONTRIBUTIONS 48
7.1 Vesting of Participant's Company Matching
Contributions Account 48
7.2 Vesting of Stock Dividends, Stock Splits and
Stock Rights 48
7.3 Participants and Beneficiaries Who Cannot Be
Located 49
7.4 Amendment to Vesting Schedule 49
8. WITHDRAWAL AND DISTRIBUTIONS OF ACCOUNTS 50
8.1 Withdrawal of Accounts During Employment 50
8.2 No Withdrawal of Company Matching Contributions
Account during Employment 54
8.3 Distribution At Or After Cessation of Employment 54
8.4 Form and Timing of Distributions 57
8.5 Distribution of Amounts Transferred from TRESOP 65
8.6 Distribution of Excess Deferrals 65
8.7 Distribution of Excess Contributions 66
8.8 Distribution of Excess Aggregate Contributions 68
8.9 Deferral of Payment of Benefits During Period of
Consideration of Domestic Relations Order;
Distribution to Alternate Payee Before Event
Permitting Distribution to Participant 70
8.10 Direct Rollovers. 71
9. ADMINISTRATION 73
9.1 Plan Administration 73
9.2 Employment of Advisers 74
9.3 Service in Several Fiduciary Capacities 74
9.4 Bonding 75
10. AMENDMENT OR TERMINATION OF PLAN 75
10.1 Amendment 75
10.2 Termination. Partial Termination or Complete
Discontinuance of Contributions 76
10.3 Non-reversion 76
11. TOP-HEAVY PLAN RULES 77
11.1 Definitions 78
11.2 Minimum Allocations 83
11.3 Change in Computation of Allocation and Benefit
Limitations 84
11.4 Special Vesting Schedule 85
iii
12. MISCELLANEOUS PROVISIONS 85
12.1 Plan Provisions to Govern 85
12.2 Rights in Trust Fund 85
12.3 Non-Alienation of Benefits 85
12.4 Treatment of Alternate Payee as Participant 86
12.5 Limitation on Rights of Employees; Employment
Relationship 86
12.6 Transfer of Assets of Plan 87
12.7 Claims Procedure 87
12.8 Gender and Number 88
12.9 Construction 89
12.10 Procedures if Participant or Beneficiary Cannot
be Located 89
12.11 Transfer from TRESOP 90
12.12 No Guarantee of Benefits 90
12.13 Rollover Contributions; Transfers From Other
Plans 90
iv
SAN DIEGO GAS & ELECTRIC COMPANY
SAVINGS PLAN
San Diego Gas & Electric Company hereby amends and
restates this retirement plan effective December 1,
1994 for the benefit of its eligible Employees.
Effective December 1, 1994, the Plan is amended from a
profit sharing plan to a stock bonus plan and is
intended to comply with the provisions of Sections
401(a) and 401(k) of the Code and further is intended
to be an employee stock ownership plan (ESOP) under
section 409 of the Code. However, Section 8.1(c)
applies to former Employees as of December 1, 1994 and
to current Employees, other than those whose terms
of employment are governed by a collective bargaining
agreement, effective June 1, 1995. Section 8.1(c) does
not apply to current Employees whose terms of
employment are covered by a collective bargaining
agreement until such time as the Committee provides.
As of such time, the provisions of the Plan apply to
all Participants except when otherwise indicated. The
ESOP must be Invested Primarily in Stock, but is not
designed at this time to acquire such Stock on a
leveraged basis.
The purposes of the Plan are:
(a) To permit Participants to share in the
Company's earnings;
(b) To stimulate and maintain among
Participants a sense of responsibility,
cooperative effort and a sincere interest in
the progress and success of the Company;
1
(c) To increase the efficiency of
Participants and to encourage them to remain
with the Company until the age of retirement
from active service;
(d) To provide security for Participants by
establishing a Plan under which each
Participant may agree to make Pretax
Contributions or After-tax Contributions to
the Plan and to receive allocations of
Matching Contributions, such contributions
and the earnings thereon to be invested and
accumulated to create a fund to benefit the
Participant and his or her dependents in the
event of the Participant's retirement,
disability or death; and
(e) To enable Participants to acquire Stock.
2. DEFINITIONS
1.1 Accounts: A Participant's separate Accounts,
as described in Section 3.1.
1.2 Administrator: A person appointed by the
Company to handle administrative details in connection
with the operation of the Plan.
1.3 After-tax Basic Contributions: A
Participant's voluntary contributions, as elected under
Section 3.2. After-tax Basic Contributions are matched
by Company Matching Contributions, as set forth in
Section 4.1.
1.4 After-tax Optional Contributions: A
Participant's voluntary contributions, as elected under
Section 3.3. Such contributions are not matched by
Company Matching Contributions.
2
1.5 Basic Contributions: Pretax Basic
Contributions and After-tax Basic Contributions are
sometimes together described in the Plan as "Basic
Contributions."
1.6 Beneficiary: The person or persons
designated by a Participant on a form provided by the
Company to receive any distribution due under the Plan
in the event of his or her death.
1.7 Board of Directors: The Board of Directors
of San Diego Gas & Electric Company.
1.8 Code: The Internal Revenue Code of 1986, as
amended.
1.9 Committee: The Savings Plan Committee, a
group of at least three officers or directors (of any
corporation adopting the Plan) appointed by the Board
of Directors in accordance with Section 9.
1.10 Company: San Diego Gas & Electric Company,
and any other corporation which adopts this Plan, with
the approval of San Diego Gas & Electric Company.
Adopting Companies may elect to adopt the Plan without
the requirement that such Company make Matching
Contributions with respect to the Company's Employees.
The adopting Company may change its election at its
discretion with the approval of San Diego Gas &
Electric Company.
1.11 Company Matching Contributions: The
Company's contributions to the Plan which match
After-tax Basic Contributions made by a Participant and
Pretax Basic Contributions made on his or her behalf,
as set forth in Section 4.1. Such contributions may be
made in cash or shares of Stock, as determined by the
Company.
3
1.12 Compensation: All compensation paid or
payable in cash or in kind by the Company by reason of
services performed by an Employee during any period,
including Pretax Basic Contributions and Pretax
Optional Contributions made to this Plan on behalf of
any Employee and pretax contributions under a plan
established by the Company pursuant to Code Section
125. Except as provided in the previous sentence, the
following shall be excluded in determining Compensation
with respect to any Employee:
(a) Company Matching Contributions made for
the Employee under this Plan and Company
contributions for or on account of the Employee
under any other employee benefit plan;
(b) Any deferred compensation paid or
payable after termination of employment of an
Employee in consideration of services performed
prior to Retirement;
(c) Any compensation paid or payable by
reason of services performed prior to the date the
Employee became a Participant;
(d) Any compensation paid by way of
overtime, or other special payments.
For purposes of computing the limits under
Sections 3.4 and 4.4, Compensation shall mean
Limitation Compensation as defined in Section 6.6 of
the Plan. For purposes of the preceding sentence,
Compensation shall include an Employee's Pretax
Contributions to this Plan and any Pretax contributions
to a cafeteria plan under Code Section 125 sponsored by
the Company.
4
For years beginning after December 31, 1988 and
through December 31, 1993, the annual Compensation of
each Participant taken into account under the Plan for
any year shall not exceed $200,000. This limitation
shall be adjusted by the Secretary at the same time and
in the same manner as under Section 415(d) of the Code,
except that the dollar increase in effect on January 1
of any calendar year is effective for years beginning
in such calendar year and the first adjustment to the
$200,000 limitation is effective on January 1, 1990.
In any Plan Year commencing on or after January 1,
1994, the annual Compensation of each Participant taken
into account under the Plan for any year shall not
exceed $150,000, as adjusted by the Commissioner of
Internal Revenue in accordance with section
401(a)(17)(B) of the Code. In determining the
Compensation of a Participant for purposes of this
limitation, the rules of Section 414(q)(6) of the Code
shall apply, except in applying such rules, the term
"family member" shall include only the spouse of the
Participant and any lineal descendants of the
Participant who have not attained age 19 before the
close of the year.
If the Plan determines Compensation on a period of
time that contains fewer than 12 calendar months, then
the annual Compensation limit is an amount equal to the
annual Compensation limit for the calendar year in
which the Compensation period begins multiplied by the
ratio obtained by dividing the number of full months in
the period by 12.
5
1.13 Controlled Group: "Controlled Group" shall
mean (i) all corporations which are members of a
controlled group of corporations with the Company,
within the meaning of Section 1563(a) of the Code,
determined without regard to Section 1563(a)(4) and
(e)(3)(C); (ii) all trades or businesses (whether or
not incorporated) which are defined under regulations
promulgated pursuant to Section 414(c) of the Code as
being under common control with the Company; and (iii)
any corporation or business organization that is a
member of an affiliated service group that includes the
Company (as determined under Section 414(m) of the
Code) or otherwise required to be aggregated with the
Company under Code Section 414(o).
1.14 Effective Date: "Effective Date" of this
restated Plan, unless otherwise specified, is December
1, 1994. However, the provisions of this Plan which
comply with the requirements of the Tax Reform Act of
1986, the Omnibus Budget Reconciliation Act of 1986,
the Omnibus Budget Reconciliation Act of 1987, and the
final regulations issued pursuant to the Retirement
Equity Act of 1984 and all subsequent legislation shall
be effective as required by statute.
1.15 Election Effective Date: The first day of
each month, the dates upon which changes in elections
respecting Basic and Optional Contributions are
effective.
1.16 Eligible Basic Contribution Percentage: The
percentage of a Participant's Compensation that may be
contributed to the Plan as Pretax and/or After-tax
Basic Contributions, as set forth in Section 3.2.
6
1.17 Eligibility Computation Period: The 12-month
period commencing on the Employee's Employment
Commencement Date or Reemployment Commencement Date,
whichever is applicable, and subsequent Plan Years
which include the anniversary of the Employment
Commencement Date or Reemployment Commencement Date,
whichever is applicable.
1.18 Eligible Employee: Each Employee, except for
the following:
(i) any "Leased Employee"; or
(ii) any person who is employed by an
operating division or subsidiary of Pacific
Diversified Capital Company; or
(iii) any "Short-term," "Part-time" and
"Call-in" Employee, as classified by the
Employer. Provided, such an Employee shall be
considered an "Eligible Employee" under the Plan
and shall be eligible to participate in the Plan
on the Entry Date following the Eligibility
Computation Period in which he or she is credited
with 1,000 Hours of Service. Such period shall be
considered a "Year of Service" for purposes of
Section 2.1.
1.19 Employee: A person currently employed by the
Company any portion of whose income is subject to
withholding of income tax and/or for whom Social
Security contributions are made by the Company, as well
as any other person qualifying as a common law employee
of the Company. "Employee" shall also include a Leased
Employee, to the extent required under Section 1.29.
7
1.20 Employment Commencement Date: The date on
which an Employee first performs an Hour of Service for
a Company maintaining the Plan.
1.21 Entry Date: The first day of any month
following completion by the Employee of one Year of
Service with the Company and attainment of age 21.
1.22 ERISA: The Employee Retirement Income
Security Act of 1974, as amended.
1.23 Family Member: An Employee or former
Employee's spouse or lineal ascendants or descendants
and the spouses of such lineal ascendants or
descendants.
1.24 Forfeitures: The unvested Company Matching
Contributions Account which are forfeited on
Termination of Service or the unvested Company Matching
Contributions which are forfeited upon a withdrawal of
a Participant's Pretax Basic Contributions or After-tax
Basic Contributions.
1.25 Funds: Any investment fund, including Stock,
selected from time to time by the Company with respect
to which Participants' Accounts may be invested.
1.26 Highly Compensated Employee: The term
"Highly Compensated Employee" includes highly
compensated active employees and highly compensated
former employees.
A highly compensated active Employee includes any
Employee who performs service for the Company during
the determination year and who, during the look-back
year: (i) received Compensation from the Company in
excess of $75,000 (as adjusted pursuant to Section
415(d) of the Code); (ii) received
8
Compensation from
the Company in excess of $50,000 (as adjusted pursuant
to Section 415(d) of the Code) and was a member of the
top-paid group for such year; or (iii) was an officer
of the Company and received Compensation during such
year that is greater than 50 percent of the dollar
limitation in effect under Section 415(b)(1)(A) of the
Code. The term Highly Compensated Employee also
includes: (i) Employees who are both described in the
preceding sentence if the term "determination year" is
substituted for the term "look-back year" and the
Employee is one of the 100 Employees who received the
most Compensation from the Company during the
determination year; and (ii) Employees who are five
percent owners at any time during the look-back year or
determination year.
If no officer has satisfied the Compensation
requirement of (iii) above during either a
determination year or look-back year, the highest paid
officer for such year shall be treated as a Highly
Compensated Employee.
For this purpose, the determination year shall be
the Plan Year, except that where the Plan Year is not a
calendar year, the Company may elect, on a consistent
basis, to consider the calendar year which ends within
the Plan Year as the determination year. The look-back
year shall be the twelve-month period immediately
preceding the determination year.
9
A highly compensated former Employee includes any
Employee who separated from service (or was deemed to
have separated) prior to the determination year,
performs no service for the Company during the
determination year, and was a highly compensated active
Employee for either the separation year or any
determination year ending on or after the Employee's
55th birthday.
If an Employee is, during a determination year or
look-back year, a Family Member of either (i) a five
percent owner who is an active or former Employee or
(ii) a Highly Compensated Employee who is one of the
ten most Highly Compensated Employees ranked on the
basis of Compensation paid by the Company during such
year, then the Family Member and the five percent owner
or top-ten Highly Compensated Employee shall be
aggregated. In such case, the Family Member and five
percent owner or top-ten Highly Compensated Employee
shall be treated as a single Employee receiving
Compensation and Plan contributions or benefits equal
to the sum of such Compensation and contributions or
benefits of the Family Member and five percent owner or
top-ten Highly Compensated Employee.
The determination of who is a Highly Compensated
Employee, including the determinations of the number
and identity of Employees in the top-paid group, the
top 100 Employees, the number of Employees treated as
officers and the Compensation that is considered, will
be made in accordance with Section 414(q) of the Code
and the regulations thereunder.
10
1.27 Hour of Service: An "Hour of Service" shall
include: Each hour for which an Employee is paid, or
entitled to payment, including back pay duly awarded or
agreed to, by the Company or another member of a
Controlled Group of which the Company is a member
either for the performance of duties or for reasons
other than the performance of duties during the
applicable computation period under the Plan. These
hours shall be credited to the Employee for the
computation period or periods in which the duties were
performed or to which the award for back pay pertains
irrespective of mitigation of damages, or if payment is
made or is owed for reasons other than performance of
duties then the number of hours to be attributed
thereto shall be calculated and credited to the
applicable computation period pursuant to Section
2530.200-2(b) and (c) of the Department of Labor
Regulations which are incorporated herein by this
reference.
Provided, however, that the term "Hour of
Service" shall be subject to the following additional
provisions:
(i) "Hour of Service" for hourly paid
Employees shall be ascertained from the records of
hours worked or hours for which payment is made or
owing. Hours of Service for all non-hourly paid
Employees whose hours are not required to be
counted and recorded by any Federal wage or hours
law, such as the Fair Labor Standards Act, need
not be determined from employment records, but
rather each such Employee shall be credited with
45 Hours per week (or 10
11
Hours of Service per day)
for any week (or day) during which he or she
receives credit for an Hour of Service.
(ii) Nothing in this Section 1.27 shall be
construed to alter, amend, modify, invalidate,
impair, or supersede any law of the United States
or any rule or regulation issued under any such
law. Thus, for example, nothing in this Section
1.27 shall be construed as denying an Employee
credit for an "Hour of Service" if credit is
required by separate Federal law.
(iii) Credit shall not be given more than
once for the same Hour of Service under any of the
provisions of this Section 1.27.
1.28 Invested Primarily in Stock: The Plan's
assets shall be invested primarily in Stock, which in
no event shall constitute less than 40% of total Trust
Assets for more than three consecutive Plan Years.
1.29 Leased Employee: "Leased Employee" means any
person (other than an Employee of the recipient
Company) who pursuant to an agreement between the
recipient and any other person (leasing organization)
has performed services for the recipient (or for the
recipient and related persons determined in accordance
with Section 414(n)(6) of the Code) on a substantially
full time basis for a period of at least one year, and
such services are of a type historically performed by
Employees in the business field of the recipient
Company. Contributions or benefits provided a Leased
Employee by the leasing organization which are
attributable to services
12
performed for the recipient
Company shall be treated as provided by the recipient
Company.
A Leased Employee shall not be considered an
Employee of the recipient if: (i) such Employee is
covered by a money purchase pension plan providing: (1)
a non-integrated employer contribution rate of at least
ten percent of Limitation Compensation, as defined in
Section 6 of the Plan, but including amounts
contributed by the Company pursuant to a salary
reduction agreement which are excludable from the
employee's gross income under Section 125, Section
402(e)(3), Section 402(h) or Section 403(b) of the
Code, (2) immediate participation, and (3) full and
immediate vesting; and (ii) Leased Employees do not
constitute more than 20 percent of the recipient's
non-highly compensated workforce.
1.30 Non-Highly Compensated Employee: A
"Non-Highly Compensated Employee" shall mean an
Employee who is neither a Highly Compensated Employee
nor a Family Member.
1.31 Notice: Written notification mailed or
delivered to the Administrator.
1.32 One-Year Break in Service: One-Year Break in
Service shall mean a 12-consecutive month Period of
Severance.
1.33 Optional Contributions: Pretax Optional
Contributions and After-tax Optional Contributions are
sometimes together described in the Plan as "Optional
Contributions."
13
1.34 Participant: Any person who is participating
in the Plan by contributing thereto (or with respect to
whom the Company is contributing on his or her behalf)
or for whom there is an amount in an Account to which
he or she is or may become entitled.
1.35 Pension Plan: San Diego Gas & Electric
Company Pension Plan, as amended from time to time.
1.36 Period of Severance: Period of Severance
shall mean a continuous period of time, beginning with
an Employee's Severance from Service, during which such
Employee is not employed by the Company.
1.37 Plan: The San Diego Gas & Electric Company
Savings Plan, the terms and conditions of which are
herein set forth, as the same may be amended from time
to time.
1.38 Plan Year: The fiscal year of the Plan
which, up to June 30, 1994, begins July 1st and ends
the following June 30th; the period from July 1, 1994
to December 31, 1994; and beginning January 1, 1995,
the calendar year.
1.39 Pretax Basic Contributions: Contributions
made by the Company to the Plan pursuant to a
Participant's election, under Section 3.2, to reduce
his or her Compensation and have the amount of such
reduced Compensation contributed to the Plan on his or
her behalf. Pretax Basic Contributions are matched by
Company Matching Contributions, as set forth in Section
4.1.
14
1.40 Pretax Optional Contributions: Contributions
made by the Company to the Plan pursuant to a
Participant's election, under Section 3.3, to reduce
his or her Compensation and have the amount of such
reduced Compensation contributed to the Plan on his or
her behalf. Pretax Optional Contributions are not
matched by Company Matching Contributions.
1.41 Reemployment Commencement Date: The date on
which an Employee first performs an Hour of Service for
a Company maintaining the Plan, following his or her
Termination of Service.
1.42 Retirement: Retirement shall mean retirement
under the Pension Plan, either in respect to Early
Retirement, Normal Retirement or at the time of actual
retirement subsequent to attaining Normal Retirement
Date.
1.43 SDG&E: SDG&E means San Diego Gas & Electric
Company.
1.44 Service: Service means an Employee's
employment by the Company or a member of the Controlled
Group, determined in accordance with reasonable and
uniform standards and policies adopted by the Company,
which shall be consistently observed. Periods of
Service shall be determined and accumulated for all
periods of employment for completed years and days of
Service commencing on the Employee's Employment
Commencement Date or Reemployment Commencement Date,
whichever is applicable, and ending on the subsequent
date a Break in Service begins. Each consecutive 12
months of Service constitutes a completed full "Year of
Service" and any part of Service in excess of each
completed full 12 consecutive months of Service shall
be counted
15
to the nearest day. An Employee shall also
receive credit for Service for any Period of Severance
of less than 12 consecutive months.
1.45 Severance from Service: Severance from
Service shall mean the date an Employee Terminates
Service for any reason, including quitting, resignation
or discharge for any cause, and shall also mean
Retirement, death or failure to return to work when
requested to do so. A Severance from Service shall not
occur as a result of an Employee's Leave of Absence, as
described in Section 2.4. If a Leave of Absence is
attributable to maternity or paternity leave, then an
individual's Period of Severance will not begin until
the second anniversary of the date the individual is
first absent and does not perform an Hour of Service.
The first one year period of absence will be considered
Service and the second one year period is neither
considered Service nor part of the Period of Severance.
1.46 Stock: The common stock of San Diego Gas &
Electric Company or any other corporation which is a
member of a Controlled Group with San Diego Gas &
Electric Company, provided such other member's stock is
validly registered on a registration statement on Form
S-8 filed under the Securities Act of 1933, as amended,
with respect to this Plan.
16
1.47 Termination of Service: The date during the
Plan Year when the Participant ceases to be an Employee
of the Company for reasons other than Retirement, Total
and Permanent Disability or death. (Having the same
meaning are the following: Terminates (his) Service,
Terminated (his) Service, etc.)
1.48 TRESOP: The "San Diego Gas & Electric
Company Tax Reduction Employee Stock Ownership Plan"
which was adopted effective July 1, 1977.
1.49 Trust: The trust established by the Trust
Agreement into which all contributions are deposited,
and from which all distributions are made.
1.50 Trust Assets: Stock and other assets held in
the Trust for the benefit of Participants.
1.51 Trustee: The corporate trustee selected and
appointed by the Board of Directors to serve as trustee
or successor trustee of the Trust pursuant to the Trust
Agreement.
1.52 Vested Right: An unconditional right to all
or a portion of a Participant's Company Matching
Contributions Account.
1.53 Year of Service: Year of Service has the
meaning set forth in the definition of "Service" in
Section 1.44.
2. PARTICIPATION
2.1 Entry into Plan: Each Eligible Employee who
immediately prior to December 1, 1994 was a Participant
in the Plan shall continue to participate in the Plan,
subject to Section 2.5. Each other Eligible Employee
may become a
17
Participant in the Plan as of the first
day of any month, if he or she has then completed at
least one Year of Service with the Company and is at
least 21 years of age.
2.2 Enrollment in Plan: Participation in the
Plan is entirely voluntary. An Eligible Employee may
become a Participant on his or her Entry Date (or the
beginning of any month thereafter) by returning a
completed application form at least ten days before
such time in which the Participant agrees to make an
After-tax Basic Contribution or reduce his or her
Compensation and have a Pretax Basic Contribution made
on his or her behalf to the Administrator. Such
contributions shall be deducted from the first paycheck
payable on or after the first day of the month.
2.3 Plan Participation by Rehired Employees: A
former Participant shall be eligible to become a
Participant of the Plan again as of the first day of
the month following his or her Reemployment
Commencement Date as an Eligible Employee. An
otherwise Eligible Employee who terminates employment
before becoming a Participant and is rehired prior to
incurring a One-Year Break in Service shall be eligible
to participate in the Plan as of the later of: (i) the
first day of the month following his or her
Reemployment Commencement Date or (ii) his or her Entry
Date, as determined under Section 2.1. An otherwise
eligible Employee who terminates employment before
becoming a Participant and who incurs a One-Year Break
in Service prior to his or her Reemployment
Commencement Date shall
18
become a Participant upon
satisfying the requirements of Section 2.1.
2.4 Leaves of Absence:
(i) A Participant's employment is not
considered terminated for purposes of the Plan if
the Employee has been on Leave of Absence with the
consent of the Company, provided that he or she
returns to the employ of the Company at the
expiration of such leave. "Leaves of Absence"
shall mean leaves granted by the Company, in
accordance with rules uniformly applied to all
Employees, for reasons of health or for reasons
determined by the Company to be in its best
interests. A Participant's employment shall
likewise not be deemed to have been terminated
while the Employee is a member of the Armed Forces
of the United States, provided that he or she
returns to the service of the Company within
ninety days (or such longer period as may be
prescribed by law) from the date he or she first
became entitled to his or her discharge. An
Employee who does not return to the employ of the
Company at the expiration of his or her Leave of
Absence, or within the required time in case of
service with the Armed Forces, shall be deemed to
have terminated his or her employment as of the
date when his or her Leave began. In any case of
an authorized Leave of Absence, all contributions
with respect to an Employee cease when regular
earnings are no longer paid.
19
(ii) If an Employee returns to the employ of
the Company at the expiration of his or her Leave
of Absence, or within the required time in case of
service with the Armed Forces, he or she shall
continue to vest in Company contributions as
otherwise provided in the Plan, during such Leave
of Absence. But if the Employee does not so
return to the employ of the Company, then he or
she shall not vest nor be considered as vesting in
Company contributions from and after the time that
such Leave or service with the Armed Forces of the
United States commenced.
2.5 Participation in the Plan: Subject to the
foregoing provisions of this Article 2, participation
in the Plan by a Participant continues until a
Participant's Accounts are distributed in full. A
Participant shall not be required to cease
participation in the Plan by reason of his or her
attaining age 65.
2.6 Transfer from TRESOP: Notwithstanding any
provision of the Plan to the contrary, any Employee
whose interest in the Company's TRESOP is transferred
to the Plan shall be a Participant in the Plan.
20
3. BASIC AND OPTIONAL CONTRIBUTIONS
3.1 Individual Accounts: For record-keeping
purposes, the Company shall establish and maintain in
the name of each Participant as many of the following
separate Accounts as the Company deems necessary:
(a) A Pretax Basic Contributions
Account;
(b) An After-tax Basic Contributions
Account;
(c) A Pretax Optional Contributions
Account;
(d) An After-tax Optional Contributions
Account;
(e) A Company Matching Contributions
Account;
(f) A TRESOP Employee Contributions
Account;
(g) A TRESOP Company Contributions
Account; and
(h) A Rollover Contributions Account.
3.2 Pretax and After-tax Basic Contributions:
Each Participant may elect, commencing with the first
paycheck payable on or after an Election Effective
Date, by giving Notice at least ten (10) days prior to
such Election Effective Date, to make After-tax Basic
Contributions to the Plan and/or reduce his or her
Compensation and have Pretax Basic Contributions made
to the Plan by the Company on the Participant's behalf.
All Pretax Contributions shall be considered Company
contributions under the Plan. The percentage of
Compensation that may be contributed, in any
combination of Pretax and After-tax Basic
Contributions, shall be determined in accordance with
the following schedule:
21
Eligible Basic
Age at Contribution Contribution Percentage
Through 39 1%, 2%, 3% or 4%
40-49, inclusive 1%, 2%, 3%, 4% or 5%
50 and over 1%, 2%, 3%, 4%, 5% or 6%
If a combination Pretax and After-tax Basic
Contributions is elected, elections of each type of
such contributions must be expressed in whole
percentages. Additionally, Participants who are
Employees may elect to defer up to the full amount of
Stock cash dividends payable on behalf of the
Participant pursuant to Section 8.
3.3 Pretax and After-tax Optional Contributions:
A Participant who elects the maximum Eligible Basic
Contribution Percentage, as set forth in the schedule
under Section 3.2, will also be eligible to make
After-tax Optional Contributions to the Plan and/or
reduce his or her Compensation and have Pretax Optional
Contributions made to the Plan on his or her behalf.
Such contributions may be made in Pretax or After-tax
Optional Contributions or any combination thereof.
Optional Contributions must be elected in whole
percentages (if a combination of Pretax and After-tax
Optional Contributions is elected, then each must be
expressed in whole percentages) of not less than one
percent (1%) of Compensation and not more than the
percent of Compensation that equals the difference
between a Participant's maximum Eligible Basic
Contribution Percentage and fifteen percent (15%). The
Company shall make no Matching Contributions with
respect to Optional Contributions.
22
3.4 Limits on Pre-tax Basic and Optional
Contributions:
(a) Maximum Amount of Pre-tax Basic and
Optional Contributions. No Eligible Employee's
Pre-tax Basic and Optional Savings Contributions
shall exceed, for any calendar year, $7000
multiplied by the adjustment factor, if any,
announced by the Secretary of the Treasury.
(b) Average Actual Deferral Percentage
Limitation. Pretax Basic and Optional
Contributions shall also be limited as follows:
(i) The Actual Deferral Percentage
("ADP") for Eligible Employees who are Highly
Compensated Employees for the Plan Year shall
not exceed the ADP for Eligible Employees who
are Non-Highly Compensated Employees for the
Plan Year multiplied by 1.25; or
(ii) The ADP for Eligible Employees who
are Highly Compensated Employees for the Plan
Year shall not exceed the Average Actual
Deferral Percentage for Eligible Employees
who are Non-Highly Compensated Employees for
the Plan Year multiplied by 2.0, provided
that the ADP for Eligible Employees who are
Highly Compensated Employees does not exceed
the ADP for Eligible Employees who are
Non-Highly Compensated Employees by more than
two (2) percentage points.
(c) Definitions. For purposes of this
Section 3.4 and for purposes of Section 8.6,
"Actual Deferral Percentage" shall mean, for a
specified group of Eligible Employees for a Plan
Year, the average of the ratios
23
(calculated
separately for each Eligible Employee in such
group) of (l) the amount of Company contributions
actually paid over to the trust on behalf of such
Eligible Employee for the Plan Year to (2) the
Eligible Employee's Compensation for such Plan
Year. Company contributions on behalf of any
Eligible Employer shall include: any Pretax
Contribution made pursuant to the Eligible
Employee's deferral election (including Excess
Elective Deferrals of Highly Compensated
Employees), but excluding (a) Excess Elective
Deferrals of Non-highly Compensated Employees that
arise solely from Pretax Contributions made under
the Plan and (b) Pretax Contributions that are
taken into account in the Contribution Percentage
test (provided the ADP satisfied both with and
without exclusion of these Pretax Contributions).
(d) Special Rules.
(i) For purposes of this Section 3.4,
the ADP for any Eligible Employee who is a
Highly Compensated Employee for the Plan Year
and who is eligible to have Pretax
Contributions allocated to his or her
accounts under two or more plans or
arrangements described in Section 401(k) of
the Code which are maintained by the Company
or a Controlled Group Member shall be
determined as if all such Pretax
Contributions were made under a single
arrangement.
24
(ii) If a Highly Compensated Employee
participates in two or more cash or deferred
arrangements that have different Plan Years,
all cash or deferred arrangements ending with
or within the same calendar year shall be
treated as a single arrangement.
Notwithstanding the foregoing, certain plans
shall be treated as separate if mandatorily
disaggregated under regulations established
pursuant to Section 401(k) of the Code.
(iii) In the event that this Plan
satisfies the requirements of sections
401(k), 401(a)(4), or 410(b) of the Code only
if aggregated with one or more other plans,
or if one or more other plans satisfy the
requirements of such sections of the Code
only if aggregated with this Plan, then this
section shall be applied by determining the
ADP of Employees as if all such plans were a
single plan. Plans may be aggregated in
order to satisfy section 401(k) of the Code
only if they have the same Plan Year.
(iv) For purposes of determining the ADP
of a Participant who is a five percent owner
or one of the ten most highly-paid Highly
Compensated Employees, the Pretax
Contributions and Compensation of such
Participant shall include the Pretax
Contributions and Compensation for the Plan
Year of Family Members (as defined in section
414(q)(6) of the Code). Family Members, with
respect to such Highly Compensated
25
Employees,
shall be disregarded as separate Employees in
determining the ADP both for Participants who
are Non-highly Compensated Employees and for
Participants who are Highly Compensated
Employees.
(v) For purposes of determining the ADP
test, Pretax Contributions must be made
before the last day of the twelve-month
period immediately following the Plan Year to
which contributions relate.
(vi) The Company shall maintain records
sufficient to demonstrate satisfaction of the
ADP test.
(vii) The determination and
treatment of the ADP amounts of any
Participant shall satisfy such other
requirements as may be prescribed by the
Secretary of the Treasury.
3.5 Discontinuance of Pretax and After-tax Basic
Contributions: A Participant may discontinue all Basic
Contributions as of any pay day by giving Notice at
least ten (10) days prior to that pay day. If the
Participant discontinues Basic Contributions, he or she
does not thereby terminate participation in the Plan,
but the Participant may not elect to resume Basic
Contributions until a period of twelve months with no
such contributions has elapsed.
26
3.6 Discontinuance of Pretax and After-tax
Optional Contributions: A Participant may elect to
discontinue all Optional Contributions as of any pay
day by giving Notice at least ten (10) days prior to
such pay day. Participants who elect to discontinue
Optional Contributions may, with at least ten (10) days
Notice, resume Optional Contributions with respect to
the first paycheck payable on or after an Election
Effective Date.
3.7 Change of Pretax and After-tax Basic
Contributions: A Participant may change his or her rate
of Basic Contributions (including Pretax and After-tax
Basic Contributions) to any other permitted
contribution percentage, effective as of the paycheck
payable on or after the Election Effective Dates of
each Plan Year. A Participant may also change his or
her elected combination of Pretax and After-tax Basic
Contributions, effective for such paycheck. Ten (10)
days Notice prior to the Election Effective Dates shall
be required to effect any changes in Basic
Contributions. Notwithstanding the foregoing, subject
to the giving of ten (10) days prior Notice, when a
Participant reaches his or her fortieth or fiftieth
birthday, he or she may increase his or her rate of
Basic Contributions (and change his or her combination
of Pretax and After-tax Basic Contributions) to be
effective for the first paycheck payable on or after
the following Election Effective Date. If a
Participant is then making After-tax Optional
Contributions, or if Pretax Optional Contributions are
then being made on his or her behalf, such
Participant's Basic Contribution percentage shall
automatically
27
increase by one percent (1%) with respect
to the paycheck payable on or after the Election
Effective Date following his or her fortieth or
fiftieth birthday with a corresponding reduction in his
or her rate of Optional Contributions.
3.8 Change of Pretax and After-tax Optional Contributions:
A Participant may change his or her rate of Optional
Contributions (including Pretax and After-tax Optional
Contributions), and may change his or her elected combination of
Pretax and After-tax Optional Contributions, effective as of the
paycheck payable on or after the Election Effective Dates of
each Plan Year by giving Notice at least ten (10) days prior to
such Election Effective Dates. However, a Participant who has
elected Optional Contributions will automatically have his or
her rate of Optional Contributions reduced by one percent (1%)
effective as of the paycheck payable on or after the Election
Effective Date following such Participant's fortieth or fiftieth
birthday, thereby increasing his or her Basic Contribution
percentage to the maximum permitted under Section 3.2.
3.9 Withdrawal of Basic and Optional Contributions
Accounts: When a Participant withdraws all or any portion of
his or her Basic or Optional Contributions Accounts, in
accordance with Section 8.1(a) or 8.1(b), all of his or her
Basic and Optional Contributions shall cease as soon as
administratively practicable after such withdrawal. Such
Participant will not be permitted to resume contributions until
twelve months have elapsed. He or she may resume contributions
by giving Notice at least ten (10) days prior to an Election
28
Effective Date thereafter, effective as of the first paycheck
payable on or after such Election Effective Date.
3.10 Payment to Trustee: All Pretax and After-tax Basic
and Optional Contributions shall be turned over to the Trustee
each pay day to be invested and held for distribution in
accordance with the Plan and the Trust Agreement. The entire
amount of such contributions are unconditionally vested in the
Participant.
4. COMPANY MATCHING CONTRIBUTIONS; LIMITATION ON AFTER-TAX
CONTRIBUTIONS
4.1 In General: Subject the the Company's election to
make Matching Contributions, the Company shall make Matching
Contributions in Stock or cash to the Plan, in an amount which
equals (i) one-half of the aggregate of Pretax and After-tax
Basic Contributions for each quarter less (ii) any Forfeitures
not previously applied to reduce Company Matching Contributions.
To the extent that a Company Matching Contribution consists of
Stock, the value of such contribution shall be based on the fair
market value of Stock on the last business day preceding the
date when the Stock is contributed. Such fair market value
shall be determined in accordance with Section 5.7.
4.2 Allocation of Company Matching Contributions: Each
Participant's Company Matching Contributions Account shall be
conditionally credited each Plan Year with an amount of Company
Matching Contributions equal to one-half of the amount of his or
her Basic Contributions for such Plan Year.
29
4.3 Payment to Trustee: All Company Matching
Contributions shall be turned over to the Trustee each pay day
to be invested and held for distribution in accordance with the
Trust Agreement.
4.4 Limitation on Matching Contributions and After-tax
Contributions: Matching Contributions and After-tax
Contributions for Eligible Employees shall be limited as
follows:
(a) Average Contribution Percentage.
The Average Contribution Percentage ("ACP") for
Eligible Employees who are Highly Compensated Employees for
each Plan Year and the ACP for Eligible Employees who are
Non-Highly Compensated Employees for the same Plan Year
must satisfy one of the following tests:
(i) The ACP for Eligible Employees who are Highly
Compensated Employees for the Plan Year shall not exceed
the ACP for Eligible Employees who are Non-highly
Compensated Employees for the same Plan Year multiplied by
1.25; or
(ii) The ACP for Eligible Employees who are
Highly Compensated Employees for the Plan Year shall
not exceed the ACP for Eligible Employees who are
Non-highly Compensated Employees for the same Plan
Year multiplied by two (2), provided that the ACP for
Eligible Employees who are Highly Compensated
Employees does not exceed the ACP for Eligible
30
Employers who are Non-highly Compensated Employees by
more than two (2) percentage points.
(b) Special Rules:
(i) Multiple Use: If the sum of the ADP and ACP
of those Highly Compensated Employees subject to
either or both tests exceeds the Aggregate Limit, then
the ACP of those Highly Compensated Employees will be
reduced (beginning with such Highly Compensated
Employee whose ACP is the highest) so that the limit
is not exceeded. The amount by which each Highly
Compensated Employee's Contribution Percentage Amounts
is reduced shall be treated as an Excess Aggregate
Contribution. The ADP and ACP of the Highly
Compensated Employees are determined after any
corrections required to meet the ADP and ACP tests.
Multiple use does not occur if either the ADP or ACP
of the Highly Compensated Employees does not exceed
1.25 multiplied by the ADP and ACP of the Non-highly
Compensated Employees.
(ii) For purposes of this Section, the
Contribution Percentage for any Participant who is a
Highly Compensated Employee and who is eligible to
have Contribution Percentage Amounts allocated to his
or her account under two or more plans described in
section 401(a) of the Code, or arrangements described
in section 401(k) of the Code that are maintained by
the Company, shall be determined as if the total of
31
such Contribution Percentage Amounts was made under
each plan. If a Highly Compensated Employee
participates in two or more cash or deferred
arrangements that have different plan years, all cash
or deferred arrangements ending with or within the
same calendar year shall be treated as a single
arrangement. Notwithstanding the foregoing, certain
plans shall be treated as separate if mandatorily
disaggregated pursuant to regulations under Section
401(m) of the Code.
(iii) In the event that this Plan satisfies
the requirements of Sections 401(m), 401(a)(4) or
410(b) of the Code only if aggregated with one or more
other plans, or if one or more other plans satisfy the
requirements of such sections of the Code only if
aggregated with this Plan, then this Section shall be
applied by determining the Contribution Percentage of
Employees as if all such plans were a single plan.
Plans may be aggregated in order to satisfy Section
401(m) of the Code only if they have the same Plan
Year.
(iv) For purposes of determining the Contribution
percentage of an Eligible Employee who is a five
percent owner or one of the ten most highly-paid
Highly Compensated Employees, the Contribution
Percentage Amounts and Compensation of such Eligible
Employee shall include the Contribution Percentage
32
Amounts and Compensation for the Plan Year of Family
Members (as defined in section 414(q)(6) of the Code).
Family Members, with respect to Highly Compensated
Employees, shall be disregarded as separate Employees
in determining the Contribution Percentage both for
Eligible Employees who are Non-highly Compensated
Employees and for Eligible Employees who are Highly
Compensated Employees.
(v) For purposes of determining the Contribution
Percentage test, After-tax Contributions are
considered to have been made in the Plan Year in which
contributed to the trust. Matching Contributions will
be considered made for a Plan Year if made no later
than the end of the twelve-month period beginning on
the day after the close of the Plan Year.
(vi) The Company shall maintain records
sufficient to demonstrate satisfaction of the ACP
test.
(vii) The determination and treatment of the
Contribution Percentage of any Eligible Employee shall
satisfy such other requirements as may be prescribed
by the Secretary of the Treasury.
(c) Definitions:
(i) "Aggregate Limit" shall mean the sum of
(i) 125 percent of the greater of the ADP of the
Non-highly Compensated Employees for the Plan Year or
the ACP of Non-highly Compensated Employees under the
33
Plan and (ii) the lesser of 200% or two plus the
lesser of such ADP or ACP. "Lesser" is substituted
for "greater" in "(i)" above, and "greater" is
substituted for "lesser" after "two plus the" in
"(ii)" if it would result in a larger Aggregate Limit.
(ii) "Average Contribution Percentage" shall
mean the average of the Contribution Percentages of
the Eligible Employees in a group.
(iii) "Contribution Percentage" shall mean the
ratio (expressed as a percentage) of the Eligible
Employee's Contribution Percentage Amounts to the
person's Compensation for the Plan Year.
(iv) "Contribution Percentage Amounts" shall
mean the sum of the After-tax Contributions and
Matching Contributions made under the Plan on behalf
of the Participant for the Plan Year. Such
Contribution Percentage Amounts shall not include
Matching Contributions that are forfeited either to
correct Excess Aggregate Contributions or because the
contributions to which they relate are Excess
Deferrals, Excess Contributions, or Excess Aggregate
Contributions. The Company may include Qualified
Nonelective Contributions in the Contribution
Percentage Amounts. The Company also may elect to use
Pretax Contributions in the Contribution Percentage
Amounts so long as the ADP test is met before the
Pretax Contributions are used in the ACP test and
34
continues to be met following the exclusion of those
Pretax Contributions that are used to meet the ACP
test.
5. INVESTMENTS
5.1 Investment of Contributions: The Trustee invests
Basic Contributions and Optional Contributions, as elected by
the Participant on a form prescribed by SDG&E, in any
combination (in whole percentages only) of Funds. Stock will be
purchased by the Trustee from SDG&E or other sources, as
directed by SDG&E. All purchases of Stock by the Trustee shall
be made at prices which do not exceed the fair market value of
such shares, as determined in accordance with Section 5.7.
SDG&E may direct the Trustee to invest and hold up to 100% of
the total value of all Accounts under the Plan in Stock.
Income from any fund is invested in such Fund. A
Participant may change his or her investment designation (with
respect to future Contributions) as of the first paycheck
payable on or after an Election Effective Date by giving Notice
at least ten (10) days prior to such Election Effective Date.
The Trustee shall invest all Company Matching Contributions and
income attributable thereto in Stock which is purchased from
SDG&E or other sources, as directed by SDG&E. Contributions and
income shall be used to purchase Fund interests in accordance
with procedures established by SDG&E. Until such purchases are
made, the Trustee shall hold such contributions and income in
35
cash in commercial accounts at Trustee bank and/or in deposits
which bear a reasonable rate of interest.
If directed by SDG&E, brokerage fees for the purchase of
Stock will be charged to the Accounts with respect to which such
Stock is purchased.
5.2 Fund Transfers: As of any Election Effective Date,
each Participant shall have the right to transfer amounts in his
or her Basic Contributions Accounts and Optional Contributions
Accounts among the Funds, by providing the Company with ten (10)
days written Notice prior to such Election Effective Date. The
timing of Fund transfers, and the valuation thereof, will be
determined in accordance with procedures established by the
Company.
5.3 Right to Diversify Accounts: Effective December 1,
2004, a Participant who is an Employee, who attains age 55 on or
after December 1, 2004, and who, on or after December 1, 2004,
has completed 10 years of participation in the Plan may elect to
direct the investment of a portion of his or her Accounts among
the Funds. Such portion shall be considered first from of the
portion of his or her Accounts otherwise subject to direction
pursuant to Section 5.1 above, plus an additional portion, if
any, of the Participant's Company Matching Contributions Account
necessary to allow direction of the applicable percentage of the
Participant's Accounts as determined below. An election to
direct the investment of Accounts may be made only by filing the
prescribed form with the Company during an election period. An
election may be revoked or modified at any time during the
36
election period. There shall be six election periods, con-
sisting of the first 90 days of the first through sixth years
following the earliest Plan Year in which the Participant had
both (1) attained at least age 55 and (2) completed at least
10 years of participation in the Plan, with years of Plan
participation measured from the date this Plan became an ESOP
(December 1, 1994).
During any of the first five election periods, the
Participant may elect to direct the direct the investment of an
amount that does not exceed 25 percent of the sum of his
Accounts plus all amounts previously directed under this
Section 5, reduced by all such previously directed amounts.
During the last election period, the Participant may elect to
direct the investment of an amount that does not exceed
50 percent of the sum of his Accounts plus all amounts
previously directed under this Section 5, reduced by all such
previously directed amounts. For purposes of this Section 5.3,
all account balances shall be determined as of the close of the
preceding Plan Year.
5.4 Protection of Participants' Rights: Shares of Stock
held or distributed by the Trustee may include such legend
restrictions on transferability as SDG&E may reasonably require
in order to ensure compliance with applicable federal and state
securities laws. If shares of Stock are acquired with the
proceeds of a loan used by the Trust to finance that
acquisition, such Stock shall not be subject to a put, call or
other option or a buy-sell or similar arrangement while such
37
Stock is held by the Plan or at the time when such Stock is
distributed from the Plan. The preceding sentence shall apply
to such Stock even after all of the Plan's obligations arising
from the acquisition of such Stock have been satisfied or after
the Plan has ceased to be an employee stock ownership plan under
section 4975(e)(7) of the Code.
5.5 Voting of Stock: Each Participant shall be entitled
to direct the Trustee with respect to the voting of all whole
shares of Stock, whether or not vested, which has been
allocated, or conditionally allocated, to his or her Accounts.
SDG&E shall conclusively determine the number of the shares of
Stock that are subject to each Participant's voting instructions
and shall advise the Trustee accordingly. SDG&E shall cause to
be delivered to each Participant a request for written voting
instructions and the voting instructions form prescribed by
SDG&E for this purpose. Each Participant who wishes to exercise
his or her rights under this Section 5.5 shall complete such
form and shall return the same to the Trustee prior to the date
prescribed by SDG&E. Once received by the Trustee, a
Participant's voting instructions shall be irrevocable. Any
shares of Stock with respect to which the Trustee receives
timely, written voting instructions from Participants under this
Section 5.5 shall be voted by the Trustee in accordance with
such instructions. The Trustee in its own discretion shall vote
(a) any shares of Stock held in the Trust Fund with respect to
which it has not received, prior to the date specified by SDG&E,
written instructions on the prescribed form from the
38
Participants who are entitled to direct the voting of such
shares and (b) any shares of Stock not allocated, or
conditionally allocated, to Participants' Accounts.
5.6 Valuation of Funds: Funds shall be valued as of the
end of each Plan Year and at such other times as may be
determined by SDG&E, on the basis of fair market values.
Earnings, gains and losses with respect to each Fund shall be
allocated to the Accounts of Participants in accordance with
procedures established by SDG&E.
5.7 Valuation of Stock: As of each Valuation Date, the
Stock shall be valued at the price prevailing on a national
securities exchange or the offering price established by current
bid and asked prices quoted by persons independent of SDG&E or
any Company, pursuant to section 3(18)(A) of ERISA.
In transactions between the Plan and a "disqualified
person" (within the meaning of section 4975(e)(2) of the Code)
which involve Stock, the value of Stock shall be determined as
of the date of such transaction.
6. ALLOCATION LIMITATIONS
6.1 General Rule: Notwithstanding anything to the
contrary contained in this Plan, the total Annual Additions to a
Participant's Accounts for any Plan Year made pursuant to
Sections 3 and 4 shall not exceed the lesser of the Defined
Contribution Dollar Limitation or 25% of the Participant's
Limitation Compensation (defined below) within the meaning of
Code Section 415(c)(3) for the Plan Year. The Plan Year shall
39
constitute the "Limitation Year" for purposes of measuring
allowable Annual Additions pursuant to Section 415 of the Code.
The Limitation Compensation referred to above shall not apply
to: (1) any contribution for medical benefits (within the
meaning of Code Section 419A(f)(2)) after separation from
service which is otherwise treated as an Annual Addition, or (2)
any amount otherwise treated as an Annual Addition under Code
Section 415(1)(l). For purposes of the Plan, "Defined
Contribution Dollar Limitation" shall mean $30,000 or, if
greater, one-fourth of the defined benefit dollar limitation set
forth in Section 415(b)(1) of the Code as in effect for the Plan
Year.
6.2 Annual Additions: For purposes of this Section 8, the
term "Annual Additions" shall mean, for any Plan Year, the sum
of the following:
(i) The amount of all Company
Contributions actually allocated to the
Participant's Accounts under Section 4 as of
any date within such year;
(ii) The amount of Forfeitures
allocated to the Participant's Accounts
under this Plan as of any date within such
year;
40
(iii) The amount of employer contributions
and forfeitures allocated to the Participant
under any qualified defined-contribution
plan that may be maintained by the
Controlled Group, other than this Plan, as
of any date within such year;
(iv) The aggregate Participant Pretax
and After-Tax contributions to this Plan
under Section 3, and employee contributions
that the Participant contributes during such
year to all qualified retirement plans
maintained by the Controlled Group; and
(v) Amounts allocated to an individual
medical account as defined in Section
415(1)(l) of the Code, which is part of a
defined benefit plan maintained by the
Company, are treated as Annual Additions to
a defined contribution plan. Also, amounts
derived from contributions paid or accrued
after December 31, 1985, in taxable years
ending after such date, which are
attributable to post-retirement medical
benefits allocated to the separate account
of a key employee, as defined in Section
419(A)(d)(3), under a welfare benefit fund,
as defined in Section 419(e) of the Code,
maintained by the
41
Company, are treated as
Annual Additions to a defined contribution
plan.
6.3 Participation in Additional Defined Contribution Plan:
If a Participant in this Plan is also a participant in another
defined contribution plan, as defined in Section 414(i) of the
Code, to which contributions are made by the Company or any
member of the Controlled Group (as defined in Section 1.13,
except that the phrase "more than 50 percent" shall be
substituted for the phrase "at least 80 percent" in applying
Section 1563(a)(1) of the Code), then the Participant's Annual
Additions in such other plan shall be aggregated with the
Participant's Annual Additions derived from this Plan, and the
Participant's compensation from such other member of the
Controlled Group shall be aggregated with his or her Limitation
Compensation from the Company for purposes of applying the
limitations in this Section 6.
6.4 Participation in Additional Defined Benefit Plan: If a
Participant in this Plan is also a participant in a defined
benefit plan, as defined in Section 414(j) of the Code, to which
contributions are made by the Company or any member of the
Controlled Group (as defined in Section 1.13, except that the
phrase "more than 50 percent" shall be substituted for the
phrase "at least 80 percent" in applying Section 1563(a)(1) of
the Code), then, in addition to the limitation set forth in
Section 6.1, the projected annual benefit under such defined
benefit plan will be limited so that the sum of the Defined
Benefit Fraction and the Defined Contribution Fraction with
42
respect to a Participant for a Limitation Year does not
exceed 1.0.
(a) Defined Contribution Fraction means a fraction,
the numerator of which is the sum of the Annual Additions
credited to the Participant's Accounts under this and all
qualified defined contribution plans of the Company or any
member of the Controlled Group for the current and all prior
Limitation Years plus the sum of the Annual Additions
attributable to the Participant's employee contributions to any
qualified defined benefit plans of the Company for the current
and all prior Limitation Years, and the denominator of which is
the sum of the lesser of the following amounts determined for
such Limitation Year and for all prior Limitation Years: (A)
the product of 1.25 multiplied by $30,000 (or such greater
amount as determined by the Commissioner of the Internal Revenue
Service applicable to the calendar year with which or within
which the Limitation Year ends) or (B) the product of 1.4
multiplied by 25 percent of such Participant's Limitation
Compensation for such Limitation Year.
If the Employee was a Participant as of the first day of
the first Limitation Year beginning after December 31, 1986, in
one or more defined contribution plans maintained by the Company
which were in existence on May 6, 1986, the numerator of this
fraction will be adjusted if the sum of this fraction and the
Defined Benefit Fraction would otherwise exceed 1.0 under the
terms of this Plan. Under the adjustment, an amount equal to
the product of (1) the excess of the sum of the fractions over
43
1.0 times (2) the denominator of this fraction, will be
permanently subtracted from the numerator of this fraction. The
adjustment is calculated using the fractions as they would be
computed as of the end of the last Limitation Year beginning
before January 1, 1987, and disregarding any changes in the
terms and conditions of the plans after May 5, 1986, but using
the Code Section 415 limitation applicable to the first
Limitation Year beginning on or after January l, 1987.
(b) Defined Benefit Fraction means a fraction, the
numerator of which is the sum of a Participant's projected
annual benefit under all the qualified defined benefit plans of
the Company or a member of the Controlled Group determined at
the end of the Limitation Year, and the denominator of which is
the lesser of (A) the product of 1.25 multiplied by $90,000 (or
such greater amount as determined by the Commissioner of the
Internal Revenue Service applicable to the calendar year with
which or within which the Limitation Year ends) or (B) the
product of 1.4 multiplied by 100 percent of the Participant's
average Compensation for the three highest consecutive calendar
Years of Service during which the Participant was active in the
Plan.
Notwithstanding the above, if a Participant was a
Participant as of the first day of the first Limitation Year
beginning after December 31, 1986, in one or more defined
benefit plans maintained by the Company which were in existence
on May 6, 1986, the denominator of the fraction will not be less
than 125 percent of the sum of the annual benefits under such
44
plans which the Participant had accrued as of the close of the
last Limitation Year beginning before January 1, 1987,
disregarding any changes in the terms and conditions of the
plans after May 5, 1986. The preceding sentence applies only if
the defined benefit plans individually and in the aggregate
satisfied the requirements of Code Section 415 for all
Limitation Years beginning before January 1, 1987.
6.5 Treatment of Excess Allocations: If the Annual
Additions to a Participant's Accounts would otherwise exceed the
limitations described in Sections 6.1 or 6.3, the aggregate of
the Annual Additions to this Plan shall be reduced, to the
extent necessary ("Excess Amount"), until the applicable
limitations are satisfied, as follows:
(a) First, After-tax Contributions shall be returned
to the Participant;
(b) If after the application of (a), above, an Excess
Amount exists, and the Participant is covered by the Plan
at the end of the Limitation Year, the Excess Amount shall
be placed in a suspense account and used to reduce Matching
Contributions for such Participant in the next Limitation
Year, and each succeeding Limitation Year, if necessary;
(c) If, after the application of (a), above, an
Excess Amount exists and the Participant is not covered by
the Plan at the end of the Limitation Year, the Excess
Amount will be held unallocated in a suspense account. The
suspense account will be used to reduce Matching
Contributions for all remaining Participants in the next
45
Limitation Year, and each succeeding Limitation Year, if
necessary. If a suspense account is in existence at any
time during the Limitation Year pursuant to this Section it
will participate in the allocation of the Trust's
investment gains and losses. In the event of the Plan's
termination, any amounts in such suspense account shall be
repaid to the Company.
6.6 Limitation Compensation: For purposes of this
Section 6, Limitation Compensation shall mean a Participant's
earned income, wages, salaries, fees for professional service
and other amounts received (without regard to whether or not
amount is paid in cash) for personal services actually rendered
in the course of employment with the Company maintaining the
plan (including, but not limited to, commissions paid salesmen,
compensation for services on the basis of percentage of profits,
commissions on insurance premiums, tips, bonuses, fringe
benefits, reimbursement, and expense allowances) and excluding
the following:
(a) Company contributions to a plan of deferred
compensation to the extent contributions are not includable
in gross income of the Employee for the taxable year in
which contributed, or on behalf of an Employee to a
simplified employee pension plan to the extent such
contributions are deductible by the Employee or any
distributions from a plan of deferred compensation;
46
(b) amounts realized from the exercise of a
nonqualified stock option, or when restricted stock (or
property) held by an Employee either becomes freely
transferable or is no longer subject to a substantial risk
of forfeiture;
(c) amounts realized from the sale, exchange or other
disposition of stock acquired under a qualified stock
option; and
(d) other amounts which receive special tax benefits,
or contributions made by an Company (whether or not under a
salary reduction agreement) towards the purchase of a Code
Section 403(b) annuity contract (whether or not the amounts
are actually excludable from the gross income of the
Employee).
For purposes of applying the limitations of this
Section 6.6, amounts included as Limitation Compensation are
amounts actually paid within the Limitation Year.
Notwithstanding the preceding sentence, Limitation Compensation
for a Participant who is permanently and totally disabled (as
defined in Section 22(e)(3) of the Code) is the Limitation
Compensation such Participant would have received for the
Limitation Year if the Participant was paid at the rate of the
Limitation Compensation paid immediately before becoming
permanently and totally disabled.
47
7. VESTING OF COMPANY CONTRIBUTIONS
7.1 Vesting of Participant's Company Matching
Contributions Account: A Participant shall be fully vested in
his or her Company Matching Contributions Account in the event
of his or her Early Retirement or attainment of Normal
Retirement Date under the Pension Plan (age 65) while an
Employee, upon death while an Employee, by reason of his or her
total and permanent disability while an Employee or, effective
July 1, 1995, if the Participant is an Employee other than an
Employee whose terms of employment are governed by a collective
bargaining agreement. Except as provided in the previous
sentence, a Participant's Company Matching Contributions Account
shall vest in accordance with the following schedule:
Years of Service Percentage of Account Vested
Less than five 0%
Five or more 100%
For purposes of this schedule, all Years of Service with a
Company or a member of the Controlled Group or a predecessor of
the Company (to the extent required by regulations issued under
Code Section 414(a)(2)) shall be taken into account.
7.2 Vesting of Stock Dividends, Stock Splits and Stock
Rights: Stock received by the Trustee as a Stock dividend or
from a Stock split or bought with cash obtained from the sale of
a Stock right, warrant or option is allocated in the same manner
as a cash dividend. It is unconditionally vested in a Partici-
48
pant if it is attributable to Stock that is unconditionally
vested in him or her, and it is conditionally credited to the
Participant if it is attributable to Stock that is conditionally
credited to him or her.
7.3 Participants and Beneficiaries Who Cannot Be Located:
The entire amount otherwise payable to a Participant or
Beneficiary who cannot be located shall be subject to forfeiture
and restoration in accordance with the procedures specified in
Section 8.4(e)(ii).
7.4 Amendment to Vesting Schedule:
(a) Vested Interest Not Diminished: If the Plan is
amended to provide for a change to the vesting schedule, then
with respect to any Employee who is a Participant on (i) the
date the amendment is adopted or (ii) the date the amendment is
effective, whichever is later, the nonforfeitable percentage of
such Employee's right to his or her Company-derived account
balance (determined as of such date) shall not be less than his
or her nonforfeitable percentage computed under the Plan without
regard to such amendment.
(b) Participant's Election: In the event of an
amendment to the vesting schedule, each Participant whose
nonforfeitable percentage of his or her account balance derived
from Company contributions was determined under the vesting
schedule prior to the amendment and who has completed at least
three Years of Service with the Company may elect, during the
election period, to have the nonforfeitable percentage of his or
her account balance derived from Company contributions
49
determined without regard to such amendment. Each Employee
eligible for such election shall make such election during the
period commencing on the date the Plan amendment is adopted and
ending no earlier than the latest of the following dates:
(i) The date which is 60 days after the
date that the Plan amendment is adopted;
(ii) The date which is 60 days after the
date that the Plan amendment becomes effective; or
(iii) The date which is 60 days after the
date that the Participant is issued written notice of
the Plan amendment by either the Company or the Plan
Administrator. A Participant shall be considered to
have completed three Years of Service if such
Participant has completed three Years of Service with
the Company prior to the expiration of the election
period described above in this Section 7.4.
8. WITHDRAWAL AND DISTRIBUTIONS OF ACCOUNTS
8.1 Withdrawal of Accounts During Employment:
(a) Withdrawal from After-Tax Contributions Accounts.
During his or her participation, a Participant may elect to
withdraw all or any part of his or her After-tax Basic
Contributions Account and After-tax Optional Contributions
Account by giving ten (10) days Notice at any time except
during the calendar quarter in which he or she Terminates
his or her Service.
If the Participant withdraws any part of his or her
After-Tax Contributions Accounts, such withdrawal shall be
deemed to be withdrawn from his or her After-tax Optional
Contributions Account, if any. If his or her withdrawal
exceeds the amount attributable to his or her After-tax
Optional Contributions Account, such excess withdrawal
shall be deemed to have been made from the After-tax Basic
Contributions first made.
(b) Withdrawal of Pretax Contributions. A
Participant may, while employed by the Company, apply to
the Company for a hardship distribution in an amount equal
to all or a portion of his or her Pretax Contributions (but
not earnings on such Pretax Contributions attributable to
Plan Years commencing after December 31, 1988) to meet an
immediate and heavy financial need which constitutes a
hardship for the Participant where the Participant has no
other financial resources to meet such need. The amount of
the hardship distribution may be increased to consider the
taxes which are payable (including any withholding that may
apply) on such distribution.
A hardship distribution shall be made only in the
following circumstances: (1) for medical expenses of the
Participant, the Participant's spouse or dependents; (2)
for the purchase (excluding mortgage payments) of a
principal residence for the Participant; (3) for the
payment of tuition for the next twelve months of
51
post-secondary education for the Participant or the
Participant's spouse, children or dependents; and (4) for
payment of amounts to prevent eviction from, or foreclosure
on the mortgage of, the Participant's principal residence.
The application shall state all facts and circumstances
necessary for the Company to determine the existence and
extent of the Participant's hardship and shall state the
amount the Participant needs. The Company shall be
entitled to rely on the truthfulness of the facts set forth
by the Participant without requiring independent
certification. The Company shall treat all requests
uniformly and shall establish rules and circumstances under
which a hardship withdrawal may be granted.
Generally, to receive a hardship distribution, a
Participant may not contribute on a pre- or post-tax basis
to this or any other qualified plan maintained by the
Company for at least 12 months. In addition, the
Participant may not make Pretax Contributions for the
Participant's taxable year immediately following the
taxable year of distribution in excess of the applicable
limit under Section 402(g) of the Code for such year less
the amount of Pre-tax Contributions made in the year of the
distribution. Hardship withdrawals shall be made from such
Fund or Funds as the Company shall determine as soon as
administratively practical after the date following the
Company's grant of a request for a withdrawal.
52
If a withdrawal is made of Basic Contributions by a
Participant who is not vested in his or her Company
Matching Contributions Account, an amount shall be
forfeited from such Participant's Company Matching
Contributions Account which bears the same ratio to the
total value of the Participant's Company Matching
Contributions Account as the amount withdrawn from his or
her Basic Contributions Account bears to the total value of
his or her Basic Contributions Account. However, if,
within five years of the date of such withdrawal, the
Participant repays all amounts so withdrawn, the amount
that was forfeited upon such withdrawal (unadjusted by any
subsequent gains or losses) shall be restored to such
Participant's Company Matching Contributions Account at the
time of the repayment. Any amount which is repaid by the
Participant may not again be withdrawn under this Section
8.1 for a period of five years from the date of repayment.
Fund transactions required to effect a withdrawal
shall occur in accordance with procedures established by
the Company. Withdrawals shall be made on a proportionate
basis from a Participant's Fund interests. For purposes of
withdrawal, Accounts are valued in accordance with
procedures established by the Company. Actual payment
shall be made as soon as administratively practicable, but
within 60 days following the end of the month in which: (i)
a withdrawal request is received, with respect to
withdrawals from After-tax Contributions Accounts, or (ii)
53
a withdrawal request is granted, with respect to
withdrawals from Pretax Contributions Accounts.
(c) Distribution of Stock Dividends: Any cash
dividend paid with respect to Stock allocated to an
Employee Participant's Accounts and held by the Plan as of
a record date on or after such date as determined by the
Committee shall be payable as provided in Section 8.4(h).
8.2 No Withdrawal of Company Matching Contributions
Account during Employment: Except as otherwise provided in
sections 5.5 or 8.1(c) above, a Participant may not withdraw any
portion of his or her Company Matching Contributions Account
while employed by the Company or a member of the Controlled
Group. Non-vested Company Matching Contribution Accounts may
not be withdrawn or distributed at any time.
8.3 Distribution At Or After Cessation of Employment:
When a Participant's employment with the Company ceases for any
of the following reasons, the Participant becomes entitled to
receive his or her Basic and Optional Contributions Accounts
plus the Participant's Company Matching Contributions Account in
which he or she has a Vested Right. The Participant's
employment ceases upon:
(a) Retirement under Pension Plan.
(b) Death.
54
(c) Total and Permanent Disability.
"Total and Permanent Disability" (or
"Totally and Permanently Disabled") is
defined as having occurred if a
Participant's illness or injury:
(i) prevents him or her from
performing the duties assigned and
required of him or her for the
Company's job classification or job
description as of the date of illness
or injury; or
(ii) after 24 months of continuous
disability prevents the Participant
from engaging in any substantially
gainful occupation for wages or profit
for which he or she is reasonably
qualified by education, training or
experience.
Provided, however:
a. If, following a period of
total disability due to illness or
injury, the Participant resumes
his or her regular employment with
the Company and performs all the
important duties thereof for a
continuous period of six months or
more, any subsequent total
disability will be considered as a
55
new period of total disability;
but if the period during which the
Participant resumes his or her
regular employment shall be less
than six months, a subsequent
total disability shall be deemed a
continuation of the same total
disability.
b. Regardless of cause, total
disability shall not be deemed to
have occurred, unless where
reasonably appropriate the
Participant is receiving treatment
to heal the illness or injury so
that the Participant may perform
his or her prescribed duties or
responsibilities, or if total
disability results from: (1) War
or any act thereof whether
declared or not; (2) Service in
the Armed Forces of any country or
international authority; (3) The
commission or attempted commission
by the Participant of an assault,
battery, or felony.
(d) Termination of Service.
56
(e) Distribution of Stock Dividends. Any cash
dividend paid with respect to Stock allocated to a
Participant's Accounts and held by the Plan as of a record
date on or after December 1, 1994 (or such other effective
date as applicable to a particular classification of
Participants), shall be payable as provided in
Section 8.4(h).
8.4 Form and Timing of Distributions:
(a) General Rule Regarding Timing of Distributions.
All distributions under the Plan shall be made in accordance
with section 401(a)(9) of the Code and the regulations
thereunder, including section 1.401(a)(9)-2 of such regulations
and, effective December 1, 1994, no later than required by
section 409(o) of the Code.
(b) Distribution in Kind or in Cash: Except as
hereafter provided in Sections 8.4(c), 8.4.(d) or 8.4.(e), as
soon as administratively practicable within the 60 day period
commencing with the first day of the month following the
Participant's termination of employment, the Trustee will
distribute the Accounts to which a Participant is then entitled.
The value of the Participant's Accounts may be made fully in
Stock (with cash in lieu of fractional shares), fully in cash,
or a combination thereof, as elected in writing by the
Participant and delivered to the Trustee. Where the Participant
has died, his or her Beneficiary (or executor or administrator
of the Participant's estate if applicable) may make the same
election available in the previous sentence. Fund transactions
57
required to effect a distribution shall occur in accordance with
procedures established by the Company. The determination of the
value of a Participant's Accounts shall also be made based upon
procedures established by SDG&E.
The failure of the Participant to elect to receive a
distribution of the Participant's Accounts will be considered to
be an election to defer payment of benefits to the date set
forth in Section 8.4(g).
(c) Retirement Under Pension Plan: If a Participant
Retires under the Pension Plan, any distribution to which he or
she is entitled will be paid at the time described in Section
8.4(b); provided, however, if the amounts in the Participant's
Accounts is more than $3,500, the Participant must voluntarily
elect in writing to receive such amounts, subject to Section
8.4(e)(i)(b.).
(d) Total and Permanent Disability: Any distribution
payable because of Total and Permanent Disability shall be made
at the time described in Section 8.4(b); provided, however, if
the amounts in the Participant's Accounts is more than $3,500,
the Participant must voluntarily elect in writing to receive
such amounts, subject to Section 8.4(g).
The failure of the Participant to elect to
receive a distribution of the Participant's Accounts will be
considered to be an election to defer payment of benefits to the
date set forth in Section 8.4(g).
58
(e) Termination of Service:
(i) When a Participant Terminates his or
her Service, the Company will make a distribution to
the Participant of the vested balance in his or her
Accounts at the time described in Section 8.4(b)
provided, however, that the Company shall make no such
distribution unless the Company determines that either
of the following conditions have been satisfied:
a. The amount in the
Participant's Accounts is not more
than $3,500;
b. If the amount in the
Participant's Accounts is more
than the amount specified in
Section 8.4(e)(i)(a.), the
Participant voluntarily elects in
writing to receive distribution of
the amounts in his or her Accounts
in which the Participant has a
Vested Right. The failure of the
Participant to elect to receive a
distribution of the Participant's
Accounts will be considered to be
an election to defer payment of
benefits to the date set forth in
Section 8.4(g).
59
(ii) A Participant whose distribution has
been received pursuant to Section 8.4(e)(i) shall have
the right to repay the full amount of the distribution
received by him or her at any time before the earlier
of: (1) the Participant's sixth consecutive One-Year
Break in Service following his or her Termination of
Service, or (2) the fifth anniversary of the date of
reemployment of the Participant. If the Participant
is reemployed by the Company, and if he or she repays
the full amount of such distribution within the time
specified in the preceding sentence, the Company shall
restore to the Participant's Company Matching
Contributions Account an amount equal to the balance
in such Account at the date of the distribution,
unadjusted by any subsequent gains or losses.
Provided, however, that
vesting in the Company Matching Contributions Account
shall not continue or occur during any period in which
the Employee is not employed by the Company, or is not
on authorized Leave of Absence or service with the
Armed Forces of the United States, except as otherwise
provided in this Section 8.4(e)(ii).
60
(iii) In the event that neither of the
conditions of Section 8.4(e)(i) are satisfied, then no
distribution of a Participant's Accounts shall be made
any earlier than the time described in Section 8.4(g).
(iv) When a distribution is made to a
Participant following the Participant's Termination of
Service, that portion of the Participant's Company
Matching Contributions Account which is not vested
shall be treated as a Forfeiture. Such Forfeitures
shall reduce Company Matching Contributions to the
Plan, as provided in Section 4.1.
(f) Death: If the Participant's participation in the
Plan terminates because of death or, if payment of the
Participant's benefits has not commenced at the time a former
Participant dies, the Participant's benefits shall be paid to
the Participant's beneficiary at the time described in
Section 8.4(b).
(i) Designation of Beneficiary: Each
Participant shall have the right to designate, on forms
provided by the Company, a Beneficiary or Beneficiaries to
receive the benefits herein provided in the event of his or
her death and shall have the right at any time to revoke
such designation or to substitute another such Beneficiary
or Beneficiaries. Notwithstanding the foregoing, however,
any Participant designation of a Beneficiary other than the
Participant's surviving spouse shall be invalid unless such
surviving spouse consents to, and acknowledges the effect
61
of, such designation in a writing which is witnessed by a
notary public or a Plan representative; provided, however,
no such consent shall be required if it is established to
the satisfaction of the Company that the consent required
hereunder may not be obtained because there is no spouse,
or because the spouse cannot be located, or because of such
other circumstances as may be prescribed by regulations
under Code Section 417(a)(2). Any change in the
designation of Beneficiary shall require consent of the
Participant's surviving spouse in accordance with the
requirements set forth in this Section 8.4(f)(i).
(ii) Absence of Valid Designation of
Beneficiaries: If, upon the death of a Participant, Former
Participant or Beneficiary, there is no valid designation
of Beneficiary on file with a Company, the Company shall
designate as the Beneficiary, in order of priority:
1. The surviving spouse;
2. Children, including adopted
children, in accordance with the
principle of representation;
3. Surviving parent; or
4. The Participant's estate.
The determination of the Company as to which persons,
if any, qualify within the aforementioned categories shall
be final and conclusive upon all persons.
62
(g) Required Time of Commencement of Benefits: The
amounts credited to the Accounts of a Participant shall be
distributed no later than 60 days after the latest of the close
of the Plan Year in which the Participant terminates his or her
employment, reaches Normal Retirement Date or reaches the tenth
anniversary of the commencement of Plan participation; provided,
however, if the amount in the Participant's Accounts is greater
than $3,500, and the Participant is entitled to receive his or
her Accounts under Section 8.4, a distribution shall be made to
such Participant only with his or her consent, with respect to
any distribution prior to the time set forth in the following
sentence. Notwithstanding any provision in this Plan to the
contrary, a Participant's benefits shall be distributed to him
or her not later than April 1 of the calendar year following the
calendar year in which the Participant attains age seventy and
one-half (70-1/2).
(h) Election and Payment of Stock Dividends.
(i) Election to Pay Dividends to Employed
Participants; Form of Payment. Each Plan Year, the Board
of Directors shall determine whether Participants who are
Employees will mandatorily receive cash dividends payable
subsequently during the Plan Year or whether such
Participants will have the opportunity to elect whether
such dividends will be distributed to the Participants or
held in the Plan.
63
Participants who are Employees as of the last day of
the Plan Year which includes the record date for the
payment of the dividends may elect to have cash dividends
payable as described above paid to the payroll department
of the Company or San Diego Gas & Electric Company which
shall act as agent for the Participant. Within 90 days of
the close of the Plan Year which includes the record date
for the payment of dividends, the payroll department shall
then include the cash dividend distribution in the paycheck
of the Participant. If the Participant does not elect to
have the Company or San Diego Gas & Electric Company act as
his or her agent, the dividends shall be paid to the
Trustee, who shall make a distribution of the dividends to
the Participant within 90 days of the close of the Plan
Year in which the dividends are actually paid.
(ii) Automatic Payment of Stock Dividends to Former
Employees: With regard to Participants who are not
Employees (including alternate payees pursuant to a
qualified domestic relations order) as of the last day of
the Plan Year which includes the record date for the
payment of the dividends, the Company shall pay any
dividends on behalf of the former Employee to the former
Employee. Such dividends shall be paid to the Trustee, who
shall make payment to the former Employee (or alternate
payee) within 90 days of the close of that Plan Year.
64
8.5 Distribution of Amounts Transferred from TRESOP:
Amounts transferred from the TRESOP and allocated to a
Participant's TRESOP Company Contribution Account shall be
distributed pursuant to the same rules applicable to Company
Matching Contributions (except that amounts allocated to a
Participant's TRESOP Company Contribution Account shall be fully
vested at all times). Amounts transferred from the TRESOP and
allocated to a Participant's TRESOP Employee Contribution
Account shall be distributed pursuant to the same rules
applicable to After-tax Optional Contributions.
8.6 Distribution of Excess Deferrals:
(a) In General: Notwithstanding any other provision
of the Plan, Excess Elective Deferrals plus any income and minus
any loss allocable thereto shall be distributed as soon as
practical after they are contributed to the Plan and no later
than the April 15 following the calendar year in which such
amounts are contributed to the Plan.
(b) Definitions: For purposes of this Section 8.6,
"Excess Elective Deferrals" shall mean the amount of Pre-tax
Contributions to this Plan for a calendar year that exceeds the
limit imposed by Section 402(g) of the Code for the
Participant's taxable year in which the deferral occurred, but
shall not include any Pretax Contributions properly distributed
as excess Annual Additions.
65
(c) Determination of Income or Loss: Excess Elective
Deferrals shall be adjusted for any income or loss up to the
date of distribution. The income or loss allocable to Excess
Elective Deferrals is the sum of: (1) income or loss allocable
to the Participant's Pretax Contribution Account for the taxable
year multiplied by a fraction, the numerator of which is such
Participant's Excess Elective Deferrals for the year and the
denominator is the Participant's account balance attributable to
Pretax Contributions without regard to any income or loss
occurring during such taxable year; and (2) ten percent of the
amount determined under (l) multiplied by the number of whole
calendar months between the end of the Participant's taxable
year and the date of distribution, counting the month of
distribution if distribution occurs after the 15th of such
month.
(d) Coordination With Excess Contributions: Excess
Deferrals to be distributed for a taxable year will be reduced
by Excess Contributions previously distributed for the Plan Year
beginning in such taxable year.
8.7 Distribution of Excess Contributions:
(a) In General: Notwithstanding any other provision
of this Plan, Excess Contributions, plus any income and minus
any loss allocable thereto, shall be distributed no later than
the last day of each Plan Year to Participants to whose accounts
such Excess Contributions were allocated for the preceding Plan
Year. Such distributions shall be made to Highly Compensated
Employees on the basis of the respective portions of the Excess
66
Contributions attributable to each of such Employees. Excess
Contributions of Participants who are subject to the Family
Member aggregation rules shall be allocated among the Family
Members in proportion to the Pretax Contributions (and amounts
treated as Pretax Contributions) of each family member that is
combined to determine the combined ADP. Excess Contributions
shall be treated as Annual Additions under the Plan.
(b) Determination of Income or Loss: Excess
Contributions shall be adjusted for any income or loss up to the
date of distribution. The income or loss allocable to Excess
Contributions is the sum of: (l) income or loss allocable to
the Participant's Pretax Contributions Account for the Plan Year
multiplied by a fraction, the numerator of which is such
Participant's Excess Contributions for the year and the
denominator is the Participant's account balance attributable to
Pretax Contributions without regard to any income or loss
occurring during such Plan Year; and (2) ten percent of the
amount determined under (1) multiplied by the number of whole
calendar months between the end of the Plan Year and the date of
distribution, counting the month of distribution if distribution
occurs after the 15th of such month.
67
(c) Definitions:
"Excess Contributions" shall mean,
with respect to any Plan Year, the excess of:
(i) The aggregate amount of Company
contributions actually taken into account in computing
the ADP of Highly Compensated Employees for such Plan
Year, over
(ii) The maximum amount of such
contributions permitted by the ADP test (determined by
reducing contributions made on behalf of Highly
Compensated Employees in order of the ADPs, beginning
with the highest of such percentages).
(d) Coordination With Excess Deferrals: The amount
of Excess Contributions to be distributed shall be reduced by
Excess Deferrals previously distributed for the taxable year
ending in the same Plan Year.
8.8 Distribution of Excess Aggregate Contributions:
(a) In General: Notwithstanding any other provision
of this plan, Excess Aggregate Contributions, plus any income
and minus any loss allocable thereto, shall be forfeited, if
forfeitable, or if not forfeitable, distributed no later than
the last day of each Plan Year to Participants to whose Accounts
such Excess Aggregate Contributions were allocated for the
preceding Plan Year. Excess Aggregate Contributions of
Participants who are subject to the Family Member aggregation
rules shall be allocated among the Family Members in proportion
to the After-tax and Matching Contributions (or amounts treated
68
as Matching Contributions) of each family member that is
combined to determine the combined ACP. Excess Aggregate
Contributions shall be treated as Annual Additions under the
plan.
(b) Determination of Income or Loss: Excess
Aggregate Contributions shall be adjusted for any income or loss
up to the date of distribution. The income or loss allocable to
Excess Aggregate Contributions is the sum of: (1) income or loss
allocable to the Participant's After-tax Contributions Account,
Matching Contribution Account and Pretax Contributions Account
for the Plan Year multiplied by a fraction, the numerator of
which is such Participant's Excess Aggregate Contributions for
the Plan Year and the denominator is the Participant's account
balance(s) attributable to Contribution Percentage Amounts
without regard to any income or loss occurring during such Plan
Year; and (2) ten percent of the amount determined under (1)
multiplied by the number of whole calendar months between the
end of the Plan Year and the date of distribution, counting the
month of distribution if distribution occurs after the 15th of
such month.
(c) Forfeitures of Excess Aggregate Contributions:
Forfeitures of Excess Aggregate Contributions will be applied to
reduce Matching Contributions.
69
(d) Definitions:
(i) "Excess Aggregate Contributions" shall
mean, with respect to any Plan Year, the excess of:
a. The aggregate Contribution
Percentage Amounts taken into account in
computing the numerator of the Contribution
Percentage actually made on behalf of Highly
Compensated Employees for such Plan Year, over
b. The maximum Contribution
Percentage Amounts permitted by the ACP test
(determined by reducing contributions made on
behalf of Highly Compensated Employees in order
of their Contribution Percentages beginning with
the highest of such percentages).
Such determination shall be made after first
determining Excess Elective Deferrals and then determining
Excess Contributions.
8.9 Deferral of Payment of Benefits During Period of
Consideration of Domestic Relations Order; Distribution to
Alternate Payee Before Event Permitting Distribution to
Participant: Notwithstanding any other provision of the Plan,
to the extent permitted by Section 414(p) of the Code and other
applicable law, the Company may defer payment of a Participant's
benefits beyond the date otherwise provided in the Plan in the
event that the Company, in its discretion, determines that such
deferral is necessary for it to consider whether a domestic
relations order is a qualified domestic relations order (under
70
Code Section 414(p)) or when the Company becomes informed that
an "alternate payee" (as defined in Code Section 414(p)) is
seeking such an order with respect to the Participant's
benefits.
A distribution may be made to an alternate payee prior to a
Participant's Termination of Service, if provided in a qualified
domestic relations order.
8.10 Direct Rollovers.
(a) Distributee Election. This Section 8.10 applies
to distributions made on or after January 1, 1993.
Notwithstanding any provision of the Plan to the contrary
that would otherwise limit a Distributee's election under
this Section 8.10, a Distributee may elect, at the time and
in the manner prescribed by the Plan Administrator, to
have any portion of an Eligible Rollover Distribution paid
directly to an Eligible Retirement Plan specified by the
Distributee in a Direct Rollover. If Distributee consent
to a distribution is not required because the amount in a
Distributee's Accounts is less than $3,500, the Distributee
will be deemed not to have made a Direct Rollover election,
unless such an affirmative election is made within the
period required by the Plan Administrator in accordance
with applicable Treasury Regulations.
71
(b) Definitions.
(i) Eligible Rollover Distribution: An Eligible
Rollover Distribution is any distribution of all or
any portion of the balance to the credit of the
Distributee, except that an Eligible Rollover
Distribution does not include: any distribution to the
extent such distribution is required under Section
401(a)(9) of the Code and the portion of any
distribution that is not includable in gross income
(determined without regard to the exclusion for net
unrealized appreciation with respect to employer
securities).
(ii) Eligible Retirement Plan: An Eligible
Retirement Plan is an individual retirement account
described in Section 408(a) of the Code, an individual
retirement annuity described in Section 408(b) of the
Code; an annuity plan described in Section 403(a) of
the Code, or a qualified trust described in Section
401(a) of the Code, that accepts the distributee's
Eligible Rollover Distribution. However, in the case
of an Eligible Rollover Distribution to the surviving
spouse, an Eligible Retirement Plan is an individual
retirement account or individual retirement annuity.
72
(iii) Distributee: A Distributee includes an
Employee or former Employee. In addition, the
Employee's or former Employee's surviving spouse and
the Employee's or former Employee's spouse or former
spouse who is the alternate payee under a qualified
domestic relations order, as defined in Section 414(p)
of the Code, are Distributees with regard to the
interest of the spouse or former spouse.
(iv) Direct Rollover: A Direct Rollover is a
payment by the Plan to the Eligible Retirement Plan
specified by the Distributee.
9. ADMINISTRATION
9.1 Plan Administration. San Diego Gas & Electric Company
("SDG&E") is the named fiduciary that has the discretionary
authority to control and manage the operation and administration
of the Plan, and SDG&E is the "administrator" and "plan sponsor"
of the Plan (as such terms are used in ERISA). SDG&E in its
sole discretion shall make such rules, interpretations and
computations and shall take such other actions to administer the
Plan as it may deem appropriate. Such rules, interpretations,
computations and actions shall be final, conclusive and binding
on all persons. In administering the Plan, SDG&E shall act in a
nondiscriminatory manner to the extent required by section
401(a) and related sections of the Code and shall at all times
discharge its duties in accordance with the standards set forth
in section 404(a)(1) of ERISA.
73
9.2 Employment of Advisers. SDG&E may retain such
attorneys, accountants, consultants or other persons to render
advice or to perform services with regard to its
responsibilities under the Plan as it shall determine to be
necessary or desirable. SDG&E may designate by written
instrument (signed by both parties) one or more persons to carry
out, where appropriate, fiduciary responsibilities under the
Plan including without limitation, a Committee. SDG&E's duties
and responsibilities under the Plan that have not been delegated
to other fiduciaries pursuant to the preceding sentence shall be
carried out by its directors, officers and employees, acting on
behalf and in the name of SDG&E in their capacities as
directors, officers and employees, and not as individual
fiduciaries.
9.3 Service in Several Fiduciary Capacities. Nothing
herein shall prohibit any person or group of persons from
serving in more than one fiduciary capacity with respect to the
Plan.
74
9.4 Bonding. SDG&E shall secure fidelity bonding for the
fiduciaries of the Plan, as required by section 412 of ERISA.
The Company shall indemnify each Employee of the Company against
any personal liability or expense, except such liability or
expense as may result from his own willful misconduct.
10. AMENDMENT OR TERMINATION OF PLAN
10.1 Amendment: The Committee shall have the right at any
time, and from time to amend, in whole or in part, (i) any or
all of the provisions of this Plan as may be necessary to
continue the qualification of the Plan under Code Section 401(a)
or as may otherwise be required under the Internal Revenue Code
or ERISA, and (ii) any or all of the provisions of any trust
agreement as may be established hereunder, in order to carry out
the purposes of the Plan. The Board of Directors of SDG&E shall
have the right at any time, and from time to time, to amend any
or all provisions of the Plan. However, the right to amend the
Plan, or any trust agreements established hereunder, shall be
subject to the provisions of Article 10.3. In addition, SDG&E
may impose limitations on the participation of current or former
Highly Compensated Employees in order to satisfy applicable
nondiscrimination rules.
75
10.2 Termination. Partial Termination or Complete
Discontinuance of Contributions:
(a) The Board of Directors of SDG&E (or any other
Company with respect to its Employees) may terminate,
partially terminate, or completely discontinue
contributions to the Plan at any time in any of which
events, the rights of all affected Participants in their
accounts shall thereupon become nonforfeitable
notwithstanding any other provisions of the Plan. However,
only the Board of Directors of SDG&E may terminate the Plan
in its entirety. The Trust shall continue until all
Participants' Accounts have been completely distributed to
or for the benefit of the Participants in accordance with
the Plan. SDG&E will decide whether (i) distributions
shall be made under the regular Plan provisions or (ii) to
distribute Trust Assets in their entirety.
(b) Upon complete discontinuance of contributions to
the Plan, or partial termination or complete termination of
the Plan, the assets then remaining in the Trust shall be
allocated as provided in Section 403(d)(1) of ERISA.
10.3 Non-reversion:
(a) The Company shall have no power to amend or
terminate the Plan in such manner as would cause or permit
any part of the assets in the Trust to be diverted to
purposes other than for the exclusive benefit of
Participants or their Beneficiaries or as would cause or
76
permit any portion of such assets to revert to or become
the property of the Company.
(b) Contributions to the Plan are conditioned on the
deductibility of the contribution under Section 404 of the
Code, and, notwithstanding any other provision of this
Plan, to the extent such deduction is disallowed, the
Trustee shall, within one year after the date of the
disallowance of the deduction, return to the contributors
the then value of the disallowed portion of the
contribution.
Notwithstanding any other provision of this Plan,
if a contribution is made under a mistake of fact
(including, but not limited to, arithmetical errors in
calculating the amounts to be contributed, errors in
determining the existence or amount of net profits or
accumulated earnings and profits, errors in determining the
eligible Participants whose Compensation may be considered
and the amount of Compensation of eligible Participants),
the Trustee shall, within one year after the payment of the
contribution, return to the contributors the then value of
the mistaken contribution.
11. TOP-HEAVY PLAN RULES
If the Plan is or becomes a Top-Heavy Plan, the provisions
of this Section 11 will supersede any conflicting provisions in
the Plan.
77
11.1 Definitions: For purposes of applying the provisions
of this Section 11:
(a) Key Employee: "Key Employee" shall mean any
Employee or former Employee (and the Beneficiaries of such
Employee or Former Employee) who at any time during the
Determination Period was (i) an officer of the Company whose
annual Compensation exceeds 50% of the dollar limitation under
Code Section 415(b)(1)(A), (ii) an owner (or individual who is
considered an owner under Code Section 318) of both one of the
ten largest interests in the Company and a l/2% interest in the
Company whose Compensation exceeds 100 percent of such dollar
limitation, (iii) a five percent owner of the Company, or (iv) a
one percent owner of the Company whose annual Compensation
exceeds $100,000. The Determination Period is the Plan Year
containing the Determination Date and the four preceding Plan
Years. Determinations regarding Key Employees will be made in
accordance with Section 416(i) of the Code and the regulations
thereunder. Non-key Employees are Employees who are not Key
Employees and include former Key Employees.
(b) Top-Heavy Plan: "Top-Heavy Plan" shall mean, for
any Plan Year, this Plan, if:
(i) The Top-Heavy Ratio for this Plan
exceeds 60 percent and this Plan is not part of a
Required Aggregation Group or Permissive Aggregation
Group of plans; or
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(ii) This Plan is a part of a Required
Aggregation Group of plans (but not part of a
Permissive Aggregation Group) and the Top-Heavy Ratio
for the Required Aggregation Group exceeds 60 percent;
or
(iii) This Plan is a part of a
Permissive Aggregation Group of plans and the
Top-Heavy Ratio for the Permissive Aggregation Group
exceeds 60 percent.
(c) Top-Heavy Ratio: "Top-Heavy Ratio" shall mean
the following:
(i) If the Company maintains one or more
defined contribution plans (including any Simplified
Employee Pension Plan) and the Company has not
maintained any defined benefit plan under which,
during the five-year period ending on the
Determination Date(s), there have existed accrued
benefits, the "Top-Heavy Ratio" for this Plan or for
the Required or Permissive Aggregation Group, as
appropriate, is a fraction, the numerator of which is
the sum of the account balances of all Key Employees
as of the Determination Date(s) (including any part of
any account balances distributed during the five-year
period ending on the Determination Date(s)), and the
denominator of which is the sum of all account
balances (including any part of any account balance
distributed in the five-year period ending on the
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Determination Date(s)), both computed in accordance
with Section 416 of the Code and the regulations
thereunder. Both the numerator and denominator of the
Top-Heavy Ratio shall be increased to reflect any
contribution not actually made as of the Determination
Date, but which is required to be taken into account
on that date under Section 416 of the Code and the
regulations thereunder.
(ii) If the Company maintains one or more
defined contribution plans (including any Simplified
Employee Pension Plan) and the Company also maintains
or has maintained one or more defined benefit plans
under which, during the five year period ending on the
Determination Date(s) there have existed any accrued
benefits, the Top-Heavy Ratio for the Required or
Permissive Aggregation Group, as appropriate, shall be
a fraction, the numerator of which is the sum of
account balances under the aggregated defined
contribution plan(s) for all Key Employees, determined
in accordance with Section 11.1(c)(i) above, and the
present value of accrued benefits under the aggregated
defined benefit plan(s) for all Key Employees as of
the Determination Date(s), and the denominator of
which is the sum of all account balances under the
aggregated defined contribution plan or plans,
determined in accordance with (i) above, and the
present value of all accrued benefits under the
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defined benefit plan(s) as of the Determination
Date(s), all determined in accordance with Section 416
of the Code and the regulations thereunder. The
accrued benefits under a defined benefit plan in both
the numerator and denominator of the Top-Heavy Ratio
shall be increased for any distribution of an accrued
benefit made in the five-year period ending on the
Determination Date. Present value shall be determined
pursuant to the terms of the defined benefit plan(s).
The actuarial assumptions must be the same with
respect to all defined benefit plans described in this
Section 11.1(c)(ii), and such actuarial assumptions
must be specified in all such plans.
(iii) For purposes of Section 11.1(c)(i)
and (ii), above, the value of account balances and the
present value of accrued benefits will be determined
for this Plan as of the Valuation Date that coincides
with the Determination Date and, for other plans, the
most recent Valuation Date that falls within or ends
with the 12-month period ending on the Determination
Date, except as provided in Section 416 of the Code
and the regulations thereunder with respect to the
first and second Plan Years of a defined benefit plan.
The account balances and accrued benefits of a
Participant (1) who is not a Key Employee for a Plan
Year but who was a Key Employee in a prior Plan Year,
or (2) who has not performed any services for any
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Company maintaining the plan at any time during the
five-year period ending on the Determination Date,
will be disregarded. If such an individual returns to
employment with the Company after the end of such
five-year period, such individual's accrued benefit
shall be included in determining the Top-Heavy Ratio.
The computation of the Top Heavy Ratio and the extent
to which distributions, rollovers, and transfers must
be taken into account will be made in accordance with
Sections 416(g)(3) and 416(g)(4)(A) of the Code and
the regulations thereunder. Deductible employee
contributions will not be taken into account for
purposes of computing the Top-Heavy Ratio. When
aggregating plans, the value of account balances and
accrued benefits will be calculated with reference to
the Determination Dates that fall within the same
calendar year. In determining the Top-Heavy Ratio,
distributions from a terminated plan shall be taken
into account in accordance with Code Section
416(g)(3).
(d) Permissive Aggregation Group: "Permissive
Aggregation Group" shall mean the Required Aggregation Group
plus any other plans of the Company which, when considered as a
group with the Required Aggregation Group, would continue to
satisfy the requirements of Code Sections 401(a)(4) and 410.
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(e) Required Aggregation Group: "Required
Aggregation Group" shall mean (i) each qualified plan of the
Company in which at least one Key Employee participates and (ii)
any other qualified plan of the Company which enables a plan
described in (i) to meet the requirements of Sections 401(a)(4)
or 410 of the Code.
(f) Determination Date: "Determination Date" shall
mean, for any Plan Year subsequent to the first Plan Year, the
last day of the preceding Plan Year. For the first Plan Year of
the Plan, Determination Date shall mean the last day of that
Plan Year.
(g) Valuation Date: "Valuation Date" shall mean, for
this Plan, the last day of the Plan Year and, for any other
plan, the date indicated in such plan for valuing account
balances or accrued benefits.
(h) Super Top-Heavy Plan: "Super Top-Heavy Plan"
shall mean a Top-Heavy Plan as defined in Section 11.1(b),
except that "90 percent" shall be substituted for "60 percent"
in such Section.
(i) Compensation: "Compensation," for all purposes
under this Section 11, shall mean "Limitation Compensation," as
defined in Section 6.
11.2 Minimum Allocations: For any Plan Year in which the
Plan is a Top-Heavy Plan, the Plan guarantees a minimum
allocation of Company contributions (including forfeitures) for
a Plan Year on behalf of any Participant who is an Employee on
the last day of the Plan Year and who is not a Key Employee
83
equal to the lesser of: (a) three percent of such Participant's
Compensation or (b) the largest percentage of Company
contributions and forfeitures (as a percentage of Compensation)
of any Key Employee for that Plan Year. The minimum allocation
is determined without regard to any Social Security
contribution. This minimum allocation shall be made even
though, under other Plan provisions, the Participant would not
otherwise be entitled to receive an allocation, or would have
received a lesser allocation for the year because of (A) the
Participant's failure to complete 1,000 Hours of Service (or any
equivalent provided in the Plan) or (B) the Participant's
receipt of Compensation less than a stated amount. If the
highest rate allocated to a Key Employee for a Plan Year in
which the Plan is Top-Heavy is less than three percent, amounts
contributed under a salary reduction agreement must be included
in determining contributions made for Key Employees. If the
Company maintains both a defined contribution plan and a defined
benefit plan, then both the defined contribution plan and the
defined benefit plan must meet its own top heavy minimum unless
the minimum contribution under the defined contribution plan is
five percent or more.
11.3 Change in Computation of Allocation and Benefit
Limitations: If this Plan is a Top-Heavy Plan, with respect to
employees who are Participants in both this Plan and a defined
benefit plan maintained by the Company, the Defined Benefit
Fraction and Defined Contribution Fraction under Section 6 will
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be computed using 100% rather than 125% of the dollar limitation
described therein.
11.4 Special Vesting Schedule: Notwithstanding the
provisions of Section 7.1, if this Plan is or becomes a Top-
Heavy Plan in any Plan Year, the percentage of a Participant's
Account to which such Participant has a nonforfeitable right,
when a person is subject to the vesting schedule in Section 7.1,
shall be determined under the following table:
Years of Service Percentage of Account Vested
Less than 3 years 0%
3 or more years 100%
12. MISCELLANEOUS PROVISIONS
12.1 Plan Provisions to Govern: To the extent that any
provisions of any Trust Agreement, pursuant to which Plan assets
are held in trust by a Trustee, are inconsistent with any
provisions of the Plan, as stated herein, the provisions of the
Plan shall govern.
12.2 Rights in Trust Fund: No person shall have any
financial interest in or right to the Trust Fund or any part
thereof, except as expressly Provided for in the Plan as
governed by ERISA.
12.3 Non-Alienation of Benefits: No benefit which shall be
Payable under the Plan shall be Subject in any manner to
anticipation, alienation, sale, transfer, voluntary or
involuntary assignment, pledge, garnishment, encumbrance, charge
or any other operation of law; provided, however, the Trustee
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may comply with a court order which the Company determines is a
qualified domestic relations order under Code Section 414(p).
12.4 Treatment of Alternate Payee as Participant: For
purposes of Section 6 and Sections 8.1 and 8.2, an alternate
payee under a qualified domestic relations order (as defined in
Code Section 414(p)) shall be treated as a Participant with
respect to the portion of Participant's Accounts assigned to the
alternate payee by such order.
12.5 Limitation on Rights of Employees; Employment
Relationship: The Plan is strictly a voluntary undertaking on
the part of the Company and shall not constitute a contract
between the Company and any Employee, or consideration for, or
an inducement or condition of, the employment of an Employee.
Except as otherwise required by law, nothing contained in the
Plan shall give any Employee the right to be retained in the
service of the Company or to interfere with or restrict the
right of the Company, which is hereby expressly reserved, to
discharge or retire any Employee at any time, with or without
cause. Except as otherwise required by law, inclusion under the
Plan will not give any Employee any right or claim to any
benefit hereunder except to the extent such right has
specifically become fixed under the terms of the Plan and there
are funds available therefor in the hands of the Trustee. The
doctrine of substantial performance shall have no application to
Employees, Participants, or Beneficiaries. Each condition and
provision, including numerical items, has been carefully
86
considered and constitutes the minimum limit on performance
which will give rise to the applicable right.
12.6 Transfer of Assets of Plan: In no event shall this
Plan be merged or consolidated with any other Plan, nor shall
there be any transfer of assets or liabilities from this Plan to
any other plan, unless immediately after such merger,
consolidation or transfer, each Participant's benefits, if such
other plan were then to terminate, are at least equal to or
greater than the benefits which the Participant would have been
entitled to had this Plan been terminated immediately before
such merger, consolidation, or transfer.
12.7 Claims Procedure: Any Participant or Beneficiary who
believes that he or she has been denied benefits under the Plan
to which he or she believes he or she is entitled may file a
written claim with the Company setting forth the nature of the
benefit claimed, the amount thereof and the basis for his or her
claiming to be entitled to such benefit. The Company shall
determine the validity of such claim and notify the Participant
or Beneficiary of the Company's determination by first class
mail within 90 days of the receipt of the written claim. In the
case of a denial of a claim, the notice shall set forth in
understandable language:
(a) The specific reasons for the denial;
(b) Specific references to pertinent Plan provisions
on which the denial is based;
87
(c) A description of any additional material or
information necessary for the claimant to perfect the claim
and an explanation of why such material or information is
necessary;
(d) An explanation of the Plan's claim review
procedure.
Within 60 days of the receipt of a denial of
his or her claim, a Participant or his or her authorized
representative may file a written request for a full review
by the Company of his or her claim for benefits. The
Company shall fully review the Participant's claim for
benefits and the prior denial of the claim and shall
provide an opportunity for the Participant or his or her
authorized representative to review pertinent documents and
submit issues and comments in writing. A decision upon
review of the claim shall be made by the Company within 60
days of receipt of the request for review. The decision on
review shall be in writing, and in understandable language
shall state the specific reasons for the decision and
include specific references to the pertinent Plan
provisions on which the decision is based. The decision of
such Company after review shall be final, except as
appropriate judicial actions may be afforded.
12.8 Gender and Number: As used in this Plan, the
masculine, feminine or neuter gender, the singular or plural
number and the use of the collective or the separate shall each
88
be deemed to include the others whenever the context so
indicates.
12.9 Construction: The Plan hereby created shall be
construed, administered and governed in all respects in
accordance with ERISA and other pertinent Federal laws, and the
laws of the State of California; provided, however, that if any
provision is susceptible of more than one interpretation, such
interpretation shall be given thereto as is consistent with the
Plan being a qualified defined contribution plan within the
meaning of the Internal Revenue Code. If any provision of this
Plan shall be held by a court of competent jurisdiction to be
invalid or unenforceable, the remaining provisions of the Plan
shall continue to be fully effective.
12.10 Procedures if Participant or Beneficiary Cannot be
Located: If a Participant or Beneficiary entitled to any
benefit under the Plan cannot be located after reasonable
inquiry by the Company within a period of seven (7) years from
and after the date that such person first became entitled to
payment of such benefit, then the full amount of such benefit
shall be forfeited. Provided, however, that the full amount of
such benefit, but without further increment by way of interest
or otherwise, shall be restored and paid to such Participant or
Beneficiary who thereafter properly claims such benefit and
makes proof of identity to the reasonable satisfaction of the
Company.
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12.11 Transfer from TRESOP: The Trustee shall accept
amounts transferred to it by the trustee of the TRESOP. Such
amounts shall be allocated to the TRESOP Company Contribution
Account to the extent attributable to Company contributions to
the TRESOP and to the TRESOP Employee Contribution Account to
the extent attributable to the Participant's employee
contributions to the TRESOP. A Participant shall be fully
vested at all times in amounts allocated to his or her TRESOP
Accounts in the Plan.
12.12 No Guarantee of Benefits: Neither SDG&E, any Company,
the Committee nor the Trustee guarantees the Trust Fund, the
Participants, former Participants or their Beneficiaries against
loss of or depreciation in value of any right or benefit than
any of them may acquire under the terms of this Plan. All of
the benefits payable hereunder shall be paid or provided for
solely from the Trust Fund, and SDG&E, any Company and the
Committee do not assume any liability or responsibility
therefor.
12.13 Rollover Contributions; Transfers From Other Plans:
Notwithstanding any other provisions hereof, the Company may, in
its discretion, direct the Trustee to accept cash from a person
who is or is about to become a Participant of this Plan;
provided, that the rollover of such assets to this Plan
qualifies as a rollover contribution within the meaning of
either Section 402(a)(5) or Section 403(a)(4) of the Code. The
Company may, in its discretion, also direct the Trustee to
accept transfers of assets from other plans qualified under
90
Section 401(a) of the Code. The discretion of the Company to
accept a rollover or transfer of assets to this Plan shall be on
a non-discriminatory basis. In each case where a transfer or
rollover has been made, a Rollover Contribution Account shall be
established. Such Rollover Contribution Account in the same
manner as After-tax Contributions for purposes of distribution
and withdrawal. Investment of such accounts shall be made in
the same manner as for other accounts.
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