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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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San Diego Gas & Electric Company
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(Name of Registrant As Specified in its Charter)
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SAN DIEGO GAS & ELECTRIC 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.
San Diego Gas & Electric Company ("SDG&E") 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.
SDG&E is a subsidiary of Enova Corporation. Shareholder approval of the
bylaw amendment will be obtained from Enova Corporation and no further
shareholder approval is required or is being sought.
THE BYLAW AMENDMENT
SDG&E'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
SDG&E is a subsidiary of Enova Corporation which owns all of SDG&E's Common
Stock. Historically, the Boards of Directors of SDG&E and Enova Corporation have
been identical or substantially identical in both structure and membership.
On June 26, 1998, Sempra Energy became the parent corporation of both
Pacific Enterprises (the parent corporation of Southern California Gas Company)
and Enova Corporation. This reorganization was effected as part of a business
combination of Enova Corporation and Pacific Enterprises in which their
respective holders of Common Stock became holders of Common Stock of Sempra
Energy. As a consequence of the business combination, SDG&E is now an indirect
subsidiary of Sempra Energy as well as a direct subsidiary of Enova Corporation.
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 Enova Corporation and eight were
directors of Pacific Enterprises at the time the business combination was
completed.
SDG&E, through Enova Corporation, contributes a very substantial portion of
the consolidated assets, revenues and income of Sempra Energy. Consequently,
SDG&E and Enova Corporation have determined that it is in the best interests of
their respective shareholders that the structure and membership of the Boards of
Directors of SDG&E and Sempra Energy be substantially identical. The bylaw
amendment will further the attainment of this result.
Accordingly, SDG&E's Board of Directors has approved the bylaw amendment
and authorized its submission to Enova Corporation for shareholder approval. The
Board of Directors has also taken several additional actions to establish
substantially identical Boards of Directors for SDG&E and Sempra Energy.
Effective with the completion of the business combination of Enova
Corporation and Pacific Enterprises on July 26, 1998, SDG&E's Board of Directors
increased the authorized number of directors to thirteen (the maximum number
currently permitted by SDG&E's bylaws); elected seven additional directors (Hyla
H. Bertea, Herbert L. Carter, Wilford D. Godbold, Jr., Ignacio E. Lozano, Jr.,
Warren I. Mitchell, Richard J. Stegemeier and Diana L. Walker), all of whom are
also directors of Sempra Energy; and approved the bylaw amendment subject to
shareholder approval by Enova Corporation. And, effective immediately upon Enova
Corporation's 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.
SDG&E'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 Enova Corporation's
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 Enova Corporation's approval of the bylaw amendment as
the majority shareholder of SDG&E, the Boards of Directors of SDG&E 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
SDG&E. Warren I. Mitchell, who is Chairman of SDG&E (as well as a Group
President of Sempra Energy and Chairman and President of Southern California Gas
Company), will also continue to be a director of SDG&E. 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.
Corresponding similar actions have been or are being taken by Enova
Corporation, Pacific Enterprises and Southern California Gas Company.
Consequently, upon the completion of these actions, the Boards of
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Directors of Sempra Energy and each of its principal direct and indirect
subsidiaries (including SDG&E) will be substantially identical in structure and
membership.
SHAREHOLDER APPROVAL
Under the California General Corporation Law to which SDG&E is subject,
approval of the bylaw amendment requires the favorable vote of (or the written
consent of shareholders holding) a majority of the votes entitled to be cast on
approval of the amendment. SDG&E's shares entitled to vote on the amendment
consist of 116,583,358 shares of Common Stock having one vote per share and
1,373,770 shares of Preferred Stock having two votes per share. All of the
Common Stock, representing approximately 98% of the votes entitled to be cast on
the amendment, is owned by Enova Corporation.
Enova Corporation has advised SDG&E 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 Enova Corporation 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 SDG&E following shareholder approval of the bylaw
amendment are set forth below. Other than Mr. Goldsmith and Dr. Ouchi, each
director 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 Southern California Gas Company. None of the
directors is additionally compensated for services as a director of SDG&E.
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, became a director of SDG&E in 1998. 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, has been a director of SDG&E since 1993. Ms. Burr is
President of Time Warner Communications.
Committees: Audit Sempra Energy
Corporate Governance Shares: 2,200
HERBERT L. CARTER, 65, became a director of SDG&E in 1998. 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, has been a director of SDG&E since 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, has been a director of SDG&E since 1983. 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, became a director of SDG&E in 1998. 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 SDG&E following
shareholder approval of the bylaw amendment by Sempra Energy. He also served as
director of SDG&E from 1992 to 1998 when he temporarily resigned pending
shareholder approval of the bylaw amendment. Mr. Goldsmith is a Management
Consultant.
Committees: Audit Sempra Energy
Corporate Governance Shares: 2,297
WILLIAM D. JONES, 43, has been a director of SDG&E since 1994. 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, became a director of SDG&E in 1998. 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 SDG&E in 1998. Mr. Mitchell is
Chairman of the SDG&E; Chairman and President of Southern California Gas
Company; and Group President -- Regulated Business Units of Sempra Energy.
Committee: Executive (Chair) Sempra Energy
Shares: 79,500*
RALPH R. OCAMPO, 67, has been a director of SDG&E since 1983. 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 SDG&E following approval of
the bylaw amendment by Sempra Energy. 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, became a director of SDG&E in 1998. 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, has been a director of SDG&E since 1994. 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, became a director of SDG&E in 1998. Mrs. Walker is a
partner in the law firm of O'Melveny & Myers LLP which, among other firms,
provides legal services to SDG&E.
Committees: Audit Sempra Energy
Finance Shares: 862
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This Information Statement is being distributed to all shareholders of
SDG&E 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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