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SCHEDULE 14C INFORMATION
INFORMATION STATEMENT PURSUANT TO SECTION 14(C)
OF THE SECURITIES EXCHANGE ACT OF 1934 (AMENDMENT NO. )
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Southern California Gas Company
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(Name of Registrant As Specified in its Charter)
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SOUTHERN CALIFORNIA GAS COMPANY
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INFORMATION STATEMENT
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August 14, 1998
WE ARE NOT ASKING YOU FOR A PROXY AND
YOU ARE REQUESTED NOT TO SEND US A PROXY.
Southern California Gas Company (the "Gas Company") is providing this
Information Statement to shareholders in connection with approval of an
amendment to its bylaws to provide that the Board of Directors shall consist of
not less than nine nor more than seventeen directors. The exact number of
directors would be fixed and may be altered, within these limits, by resolution
of the Board of Directors.
The Gas Company is a subsidiary of Pacific Enterprises. Shareholder
approval of the bylaw amendment will be obtained from Pacific Enterprises and no
further shareholder approval is required or is being sought.
THE BYLAW AMENDMENT
The Gas Company's bylaws currently provide that the Board of Directors
shall consist of not less than seven nor more than thirteen directors. The exact
number of directors (currently thirteen) is fixed and may be altered, within
these limits, by resolution of the Board of Directors. The bylaw amendment will
increase the range of the authorized number of directors to a minimum of nine
and a maximum of seventeen.
BACKGROUND, PURPOSE AND EFFECT
The Gas Company is a subsidiary of Pacific Enterprises which owns over 99%
of the Gas Company's voting shares. In recent years, the Boards of Directors of
the Gas Company and Pacific Enterprises have been identical or substantially
identical in membership.
On June 26, 1998, Sempra Energy became the parent corporation of both Enova
Corporation (the parent corporation of San Diego Gas & Electric Company) and
Pacific Enterprises. This reorganization was effected as part of a business
combination of Pacific Enterprises and Enova Corporation in which their
respective holders of Common Stock became holders of Common Stock of Sempra
Energy. As a consequence of the business combination, the Gas Company is now an
indirect subsidiary of Sempra Energy as well as a direct subsidiary of Pacific
Enterprises.
Sempra Energy was formed solely for the purpose of effecting the business
combination of Enova Corporation and Pacific Enterprises and to serve as a
holding company for the two corporations and their
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subsidiaries. The Board of Directors of Sempra Energy is comprised of sixteen
members, of whom eight were directors of Pacific Enterprises and eight were
directors of Enova Corporation at the time the business combination was
completed.
The Gas Company, through Pacific Enterprises, contributes a very
substantial portion of the consolidated assets, revenues and income of Sempra
Energy. Consequently, the Gas Company and Pacific Enterprises have determined
that it is in the best interests of their respective shareholders that the
structure and membership of the Boards of Directors of the Gas Company and
Sempra Energy be substantially identical. The bylaw amendment will further the
attainment of this result.
Accordingly, the Gas Company's Board of Directors has approved the bylaw
amendment and authorized its submission to Pacific Enterprises for shareholder
approval. The Board of Directors has also taken several additional actions to
establish substantially identical Boards of Directors for the Gas Company and
Sempra Energy.
Effective with the completion of the business combination of Pacific
Enterprises and Enova Corporation on July 26, 1998, the Gas Company's Board of
Directors increased the authorized number of directors to thirteen (the maximum
number currently permitted by the Gas Company's bylaws); elected six additional
directors (Ann Burr, Richard A. Collato, Daniel W. Derbes, William D. Jones,
Ralph R. Ocampo and Thomas C. Stickel), all of whom are also directors of Sempra
Energy; and approved the bylaw amendment subject to shareholder approval by
Pacific Enterprises. And, effective immediately upon Pacific Enterprises'
approval of the bylaw amendment, the Board of Directors further increased the
authorized number of directors to fifteen and elected two additional directors
(Robert H. Goldsmith and William G. Ouchi, both of whom are also directors of
Sempra Energy) to fill the vacancies created by the increase.
The Gas Company's Board of Directors has also created six committees of the
Board that are substantially identical in function to the identically named
committees of Sempra Energy's Board of Directors. And, upon the election of the
two additional directors that will become effective upon Pacific Enterprises'
approval of the bylaw amendment, the membership of these committees will also be
substantially identical to the identically named committees of Sempra Energy.
Consequently, upon Pacific Enterprises' approval of the bylaw amendment as
the majority shareholder of the Gas Company, the Boards of Directors of the Gas
Company and Sempra Energy will be substantially identical in both structure and
membership. Fourteen of the sixteen directors of Sempra Energy (including all of
the directors who are not also officers of Sempra Energy) will also be directors
of the Gas Company. Warren I. Mitchell, who is Chairman and President of the Gas
Company (as well as a Group President of Sempra Energy and Chairman of San Diego
Gas & Electric Company), will also continue to be a director of the Gas Company.
The identically-named committees of the two boards will also be substantially
identical in function and membership (and identical in membership of non-officer
directors) to the identically-named committees of Sempra Energy.
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Corresponding similar actions have been or are being taken by Pacific
Enterprises, Enova Corporation and SDG&E. Consequently, upon the completion of
these actions, the Board of Directors of Sempra Energy and each of its principal
direct and indirect subsidiaries (including the Gas Company) will be
substantially identical to that of Sempra Energy in structure and membership.
SHAREHOLDER APPROVAL
Under the California General Corporation Law to which the Gas Company is
subject, approval of the bylaw amendment requires the favorable vote or written
consent of the holders of a majority of the Gas Company's outstanding shares.
These shares consist of 91,300,000 shares of Common Stock and 862,043 shares of
Preferred Stock. All of the Common Stock and 50,477 shares of the Preferred
Stock, together representing approximately 99% of the outstanding shares, are
owned by Pacific Enterprises.
Pacific Enterprises has advised the Gas Company that it intends to approve
the bylaw amendment by written consent as permitted by the California General
Corporation Law. Accordingly, no other shareholder approval will be required for
the approval of the bylaw amendment and none is being sought.
EFFECTIVENESS
The bylaw amendment is expected to be approved by Pacific Enterprises and
become effective on September 1, 1998.
BOARD OF DIRECTORS
The names and additional information regarding each of the fifteen persons
who will be directors of the Gas Company following shareholder approval of the
bylaw amendment are set forth below. Other than Mr. Goldsmith and Dr. Ouchi,
each is currently a director.
Each director (other than Mr. Mitchell) is also a director of Sempra
Energy. Mr. Mitchell is a Group President of Sempra Energy, Chairman of SDG&E
and Chairman and President of the Gas Company. None of the directors is
additionally compensated for services as a director of the Gas Company.
Unless otherwise noted, each director has held the position indicated or
various positions with the same or related organizations for at least the last
five years.
HYLA H. BERTEA, 58, has been a director of the Gas Company since 1993. Mrs.
Bertea is a realtor with Prudential California.
Committees: Compensation Sempra Energy
Corporate Governance (Chair) Shares: 9,085
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ANN BURR, 51, became a director of the Gas Company in 1998. Ms. Burr is
President of Time Warner Communications.
Committees: Audit Sempra Energy
Corporate Governance Shares: 2,200
HERBERT L. CARTER, 65, has been a director of the Gas Company since 1993.
Dr. Carter is Executive Vice Chancellor Emeritus and Trustee Professor of Public
Administration of the California State University System. He is also a director
of Golden State Mutual Insurance Company.
Committees: Executive Sempra Energy
Public Policy (Chair) Shares: 1,492
RICHARD A. COLLATO, 55, became a director of the Gas Company in 1998. Mr.
Collato is President and Chief Executive Officer of the YMCA of San Diego
County.
Committees: Audit (Chair) Sempra Energy
Finance Shares: 3,790
DANIEL W. DERBES, 68, became a director of the Gas Company in 1998. Mr.
Derbes is President of Signal Ventures. He is also a director of Oak Industries,
Inc. and WD-40 Co.
Committees: Corporate Governance Sempra Energy
Finance (Chair) Shares: 4,790
WILFORD D. GODBOLD, JR., 60, has been a director of the Gas Company since
1993. Mr. Godbold is President and Chief Executive Officer of ZERO Corporation.
He is also a director of Santa Fe Pacific Pipelines, Inc.
Committees: Audit Sempra Energy
Finance Shares: 3,006
ROBERT H. GOLDSMITH, 68, will become a director of the Gas Company
following shareholder approval of the bylaw amendment by Pacific Enterprises.
Mr. Goldsmith is a Management Consultant.
Committees: Audit Sempra Energy
Corporate Governance Shares: 2,297
WILLIAM D. JONES, 43, became a director of the Gas Company in 1998. Mr.
Jones is President and Chief Executive Officer of CityLink Investment
Corporation. He is also a director of The Price Real Estate Investment Trust.
Committees: Finance Sempra Energy
Public Policy Shares: 1,771
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IGNACIO E. LOZANO, JR., 71, has been a director of the Gas Company since
1993. Mr. Lozano is Chairman of the Board of La Opinion. He is also a director
of The Walt Disney Company and Pacific Mutual Life Insurance Company.
Committees: Compensation Sempra Energy
Executive Shares: 2,209
WARREN I. MITCHELL, 61, became a director of the Gas Company in 1997. Mr.
Mitchell is Chairman and President of the Gas Company; Chairman of San Diego Gas
& Electric Company; and Group President -- Regulated Business Units of Sempra
Energy.
Committee: Executive (Chair) Sempra Energy
Shares: 79,500*
RALPH R. OCAMPO, 67, became a director of the Gas Company in 1998. Dr.
Ocampo is a physician and surgeon.
Committees: Compensation Sempra Energy
Public Policy Shares: 14,469
WILLIAM G. OUCHI, 55, will become a director of the Gas Company following
shareholder approval of the bylaw amendment by Pacific Enterprises. Dr. Ouchi is
a Vice Dean and Faculty Director of Executive Education Programs and Professor
of Management in the Anderson Graduate School of Management at UCLA. He is also
co-chair of the UCLA School Management Program. He is also a director of
Allegheny-Teledyne and First Federal Bank of California.
Committees: Audit Sempra Energy
Public Policy Shares: 10,000
RICHARD J. STEGEMEIER, 70, has been a director of the Gas Company since
1995. Mr. Stegemeier is Chairman Emeritus of the Board of Unocal Corporation. He
is also a director of Foundation Health Systems, Inc.; Halliburton Company;
Montgomery Watson, Inc.; Northrop Grumman Corporation; and Wells Fargo Bank.
Committees: Compensation (Chair) Sempra Energy
Corporate Governance Shares: 1,503
THOMAS C. STICKEL, 49, became a director of the Gas Company in 1998. Mr.
Stickel is Chairman and Chief Executive Officer of University Venture Network.
He is also a director of Onyx Acceptance Corporation; Blue Shield of California;
O'Connor R.P.T.; and Scripps International, Inc.
Committees: Compensation Sempra Energy
Executive Shares: 1,995
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DIANA L. WALKER, 57, has been a director of the Gas Company since 1993.
Mrs. Walker is a partner in the law firm of O'Melveny & Myers LLP which, among
other firms, provides legal services to the Gas Company.
Committees: Audit Sempra Energy
Finance Shares: 862
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This Information Statement is being distributed to all shareholders of the
Gas Company commencing August 14, 1998.
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* Includes 71,429 shares issuable upon exercise of employee stock options that
may be exercised on or before October 15, 1998.
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