EXHIBIT 10.1

EMPLOYMENT AGREEMENT

THIS EMPLOYMENT AGREEMENT ("Agreement") made and entered into as of the 17th day
of September, 2002 (the "Effective Date"), by and between Sempra Energy (the
"Company"), a California corporation, and Stephen L. Baum (the "Executive");

WHEREAS, the Company and the Executive are parties to that certain Employment
Agreement, dated as of October 12, 1996 and amended from time to time (the
"Prior Employment Agreement"), pursuant to which the Company currently employs
the Executive;

WHEREAS, the Company and the Executive each have determined that it would be to
the advantage and best interest of the Company and the Executive to enter into a
new employment agreement upon the terms set forth in this Agreement; and

WHEREAS, the Company and the Executive desire to have this Agreement govern the
terms of the Executive's employment during the Employment Period (as defined
below).

NOW, THEREFORE, IN CONSIDERATION of the mutual premises, covenants and
agreements set forth below, it is hereby agreed as follows:

    Employment and Term
    .
    Employment
    . The Company agrees to employ the Executive, and the Executive agrees to be
    employed by the Company, in accordance with the terms and provisions of this
    Agreement during the term thereof (as described below).
    Term
    . The term of the Executive's employment under this Agreement shall commence
    on the Effective Date and shall continue until January 31, 2006 (the
    "Retirement Date"), subject to earlier termination as provided herein (such
    term being referred to hereinafter as the "Employment Period").

    Duties and Powers of Executive
    .
    Position
    . During the Employment Period, the Executive shall be nominated to the
    position of, and if elected shall serve as, Chairman of the Board of
    Directors of the Company (the "Board"), Chief Executive Officer and
    President of the Company with such authority, duties and responsibilities
    with respect to such position as set forth below;
    provided, however,
    that if any law or regulation applicable to the Company prohibits an
    executive officer from holding the title of both (i) Chairman of the Board
    and (ii) Chief Executive Officer or President, then the Executive shall
    serve only as Chief Executive Officer and President of the Company;
    provided, further,
    that in such event, the Executive may elect to retire by notifying the
    Company no later than 180 days following the election of a new Chairman of
    the Board and receive the benefits described in Section 5(d). The Executive
    shall report only to the Board. The senior-most person in charge of the
    Company's regulated and nonregulated businesses and the senior-most person
    in charge of each of the Company's policy units shall report directly to the
    Executive.
    Duties
    .
    Chief Executive Officer
    . The duties of the Chief Executive Officer of the Company shall include but
    not be limited to directing the overall business, affairs and operations of
    the Company, through its officers, all of whom shall report directly or
    indirectly to the Chairman of the Board.
    Chairman of the Board
    . The Chairman of the Board shall be a director and shall preside at
    meetings of the Board and meetings of the shareholders. The Chairman of the
    Board shall have such duties and responsibilities as are customarily
    assigned to such positions.
    President
    . The President of the Company shall report to the Chief Executive Officer
    whom the President shall assist in directing the overall business, affairs
    and operations of the Company and by undertaking other efforts or activities
    requested by the Chief Executive Officer.
    Successor Planning
    . Notwithstanding the foregoing, during a reasonable period prior to the
    Expiration Date, the Executive agrees to cooperate with, and assist, the
    Company in its efforts to transition a new successor to the Executive's
    position, and the Board may appoint a Chief Operating Officer or other
    executive officer with a different title to assist the Executive in
    directing the overall business, affairs and operations of the Company under
    the Executive's supervision, without violating the terms of this Agreement.
    
    Board Membership
    . The Executive shall be a member of the Board as of the Effective Date, and
    the Board shall propose the Executive for re-election to the Board
    throughout the Employment Period.
    Attention
    . During the Employment Period, and excluding any periods of vacation and
    sick leave to which the Executive is entitled, the Executive shall devote
    full attention and time during normal business hours to the business and
    affairs of the Company and, to the extent necessary to discharge the
    responsibilities assigned to the Executive under this Agreement, use the
    Executive's best efforts to carry out such responsibilities faithfully and
    efficiently. It shall not be considered a violation of the foregoing for the
    Executive to serve on corporate, industry, civic or charitable boards or
    committees, so long as such activities do not interfere with the performance
    of the Executive's responsibilities as an employee of the Company in
    accordance with this Agreement.

    Compensation
    .

    It is the Board's intention to provide the Executive with compensation
    opportunities that, in total, are at a level that is consistent with that
    provided by comparable companies to executive officers of similar levels of
    responsibility, expertise and corporate and individual performance as
    determined by the compensation committee of the Board. In this regard, the
    Executive shall receive the following compensation for his services
    hereunder to the Company:

    Base Salary
    . During the Employment Period, the Executive's annual base salary ("Annual
    Base Salary") shall be payable in accordance with the Company's general
    payroll practices. During the Employment Period, the Executive's Annual Base
    Salary shall in no event be less than $1,019,000. Subject to Section
    4(d)(ii), the Board in its discretion may from time to time direct such
    upward adjustments in the Executive's Annual Base Salary as the Board deems
    to be necessary or desirable, including, without limitation, adjustments in
    order to reflect increases in the cost of living and the Executive's
    performance. Any increase in Annual Base Salary shall not serve to limit or
    reduce any other obligation of the Company under this Agreement. For
    purposes of Sections 3(b), 4(d)(ii), 5(a)(i), 5(a)(ii), 5(a)(v) and 10(c),
    reference to Annual Base Salary shall mean the highest Annual Base Salary
    payable to the Executive at any time during the term of this Agreement.
    Incentive Compensation
    . Subject to Section 4(d)(ii), during the Employment Period, the Executive
    shall participate in annual incentive compensation plans and long-term
    incentive compensation plans of the Company and, to the extent appropriate,
    the Company's subsidiaries (which long-term incentive compensation plans may
    include plans offering stock options, restricted stock and other long-term
    incentive compensation and all such annual and long-term plans to be
    hereinafter referred to as the "Incentive Compensation Plans") and will be
    granted awards thereunder providing him with the opportunity to earn, on a
    year-by-year basis, annual and long-term incentive compensation (the
    "Incentive Compensation Awards") at least equal (in terms of target, maximum
    and minimum award levels expressed as a percentage of Annual Base Salary) to
    the Executive's opportunities that were in effect immediately prior to the
    Effective Date. The target award level opportunities in effect immediately
    prior to the Effective Date were 100% of Annual Base Salary for annual
    incentive awards and 345% of Annual Base Salary for long term incentive
    awards. Any equity awards granted to the Executive may be granted, at the
    Executive's election, to trusts established for the benefit of members of
    the Executive's family.
    Retirement and Welfare Benefit Plans
    . In addition to the benefits provided under Section 3(b), during the
    Employment Period and so long as the Executive is employed by the Company,
    he shall be eligible to participate in all other savings, retirement and
    welfare plans, practices, policies and programs applicable generally to
    employees and/or senior executive officers of the Company and its domestic
    subsidiaries, at a level and on terms and conditions no less favorable than
    those available to the Executive immediately prior to the Effective Date,
    except with respect to any benefits under any plan, practice, policy or
    program to which the Executive has waived his rights in writing. The
    Executive shall participate in the Sempra Energy Supplemental Executive
    Retirement Plan (the "SERP") which permanently adopted and incorporated by
    reference the San Diego Gas and Electric Supplemental Executive Retirement
    Plan and notwithstanding anything to the contrary in the SERP, his SERP
    benefit shall be determined as if the Executive was at least age 62.
    Expenses
    . The Company shall reimburse the Executive for all expenses, including
    those for travel and entertainment, properly incurred by him in the
    performance of his duties hereunder in accordance with policies established
    from time to time by the Board.
    Fringe Benefits and Perquisites
    . During the Employment Period and so long as the Executive is employed by
    the Company, he shall be entitled to receive fringe benefits and perquisites
    in accordance with the plans, practices, programs and policies of the
    Company and, to the extent appropriate, the Company's subsidiaries from time
    to time in effect, commensurate with his position.
    Sarbanes-Oxley Act of 2002
    . Notwithstanding anything herein to the contrary, if the Company
    determines, in its good faith judgment, that any provision of this Agreement
    is likely to be interpreted as a personal loan prohibited by the
    Sarbanes-Oxley Act of 2002 and the rules and regulations promulgated
    thereunder (the "Act"), then such provision shall be modified as necessary
    or appropriate so as to not violate the Act and if this cannot be
    accomplished, then the Company shall use its reasonable efforts to provide
    the Executive with similar, but lawful, substitute benefits at a cost to the
    Company not to significantly exceed the amount the Company would have
    otherwise paid to provide such benefit(s) to the Executive.

    Termination of Employment
    .
        Death or Disability
        . The Executive's employment shall terminate upon the Executive's death
        or, at the election of the Board or the Executive, by reason of
        Disability (as herein defined) during the Employment Period;
        provided, however
        , that the Board may not terminate the Executive's employment hereunder
        by reason of Disability unless (i) at the time of such termination there
        is no reasonable expectation that the Executive will return to work
        within the next ninety (90) day period and (ii) such termination is
        permitted by all applicable disability laws. For purposes of this
        Agreement, disability ("Disability") shall have the same meaning as set
        forth in the Company's long-term disability plan or its successor.
        By the Company for Cause
        . The Company may terminate the Executive's employment during the
        Employment Period for Cause (as herein defined). For purposes of this
        Agreement, "Cause" shall mean (i) the willful and continued failure by
        the Executive to substantially perform the Executive's duties with the
        Company (other than any such failure resulting from the Executive's
        incapacity due to physical or mental illness or any such actual or
        anticipated failure after the issuance of a Notice of Termination for
        Good Reason by the Executive pursuant to Section 4(d)) or (ii) the
        Executive's commission of one or more acts of moral turpitude that
        constitute a violation of applicable law (including but not limited to a
        felony) which have or result in an adverse effect on the Company,
        monetarily or otherwise or one or more significant acts of dishonesty.
        For purposes of clause (i) of this definition, no act, or failure to
        act, on the Executive's part shall be deemed "willful" unless done, or
        omitted to be done, by the Executive not in good faith and without
        reasonable belief that the Executive's act, or failure to act, was in
        the best interest of the Company.
        By the Company without Cause
        . Notwithstanding any other provision of this Agreement, the Company may
        terminate the Executive's employment other than by a termination for
        Cause during the Employment Period, but only upon the affirmative vote
        of three-fourths (3/4) of the membership of the Board.
        By the Executive for Good Reason
        . The Executive may terminate his employment during the Employment
        Period for Good Reason (as herein defined). For purposes of this
        Agreement, "Good Reason" shall mean the occurrence without the written
        consent of the Executive of any one of the following acts by the
        Company, or failures by the Company to act, unless such act or failure
        to act is corrected (or denied in the event of clause (xi) below) by the
        Company within 30 days after the Company receives the Notice of
        Termination (as hereinafter defined) given in respect thereof:
         i.    an adverse change in the Executive's title, authority, duties,
               responsibilities or reporting lines as specified in Section 2(a)
               and 2(b) of this Agreement; provided, however, that the inability
               of the Executive to serve as Chairman of the Board pursuant to
               Section 2(a) or the appointment of a Chief Operating Officer or
               other executive officer pursuant to Section 2(b) shall not
               constitute Good Reason;
         ii.   a reduction by the Company in (A) the Executive's Annual Base
               Salary as in effect on the date hereof or as the same may be
               increased from time to time or (B) the Executive's aggregate
               annualized compensation and benefits opportunities, except, in
               the case of both (A) and (B), for across-the-board reductions
               similarly affecting all executive officers (both of the Company
               and of any Person (as hereinafter defined) then in control of the
               Company) whose compensation is directly determined by the
               compensation committee of the Board (and the compensation
               committee of the board of directors of any Person (as hereinafter
               defined) then in control of the Company); provided that, the
               exception for across-the-board reductions shall not apply
               following a Change in Control (as hereinafter defined);
         iii.  the relocation of the Executive's principal place of employment
               to a location away from the Company's headquarters or a
               relocation of the Company's headquarters to a location further
               away which is both further away from Executive's residence and
               more than thirty (30) miles from such headquarters or a
               substantial increase in the Executive's business travel
               obligations outside of the Southern California area as of the
               Effective Date other than any such increase that (A) arises in
               connection with extraordinary business activities of the Company
               and (B) is understood not to be part of the Executive's regular
               duties with the Company;
         iv.   the failure by the Company to pay to the Executive any portion of
               the Executive's current compensation and benefits or to pay to
               the Executive any portion of an installment of deferred
               compensation under any deferred compensation program of the
               Company within thirty (30) days of the date such compensation is
               due;
         v.    the failure by the shareholders to elect the Executive to the
               Board during the Employment Period;
         vi.   the failure by the Board to elect the Executive to the positions
               of Chairman of the Board, President and Chief Executive Officer
               during the Employment Period; provided, however, that the failure
               by the Board to elect the Executive to the position of Chairman
               of the Board during the Employment Period as a result of the
               inability of the Executive to serve as Chairman of the Board
               pursuant to Section 2(a) shall not constitute Good Reason;
         vii.  any purported termination of the Executive's employment that is
               not effected pursuant to a Notice of Termination satisfying the
               requirements of Section 4(f); for purposes of this Agreement, no
               such purported termination shall be effective;
         viii. the failure by the Company to obtain a satisfactory agreement
               from any successor of the Company requiring such successor to
               assume and agree to perform the Company's obligations under this
               Agreement, as contemplated in Section 12;
         ix.   the failure by the Company to provide the indemnification and D&O
               insurance protection Section 7 of this Agreement requires it to
               provide;
         x.    the failure by the Company to comply with any material provision
               of this Agreement; or
         xi.   the announcement of the Company's intent to take one of the
               actions or omissions to act, as applicable, described in clauses
               (i) through (x) above.
    
     a. Following a Change in Control (as hereinafter defined), the Executive's
        determination that an act or failure to act constitutes Good Reason
        shall be presumed to be valid unless such determination is deemed to be
        unreasonable by an arbitrator. The Executive's right to terminate the
        Executive's employment for Good Reason shall not be affected by the
        Executive's incapacity due to physical or mental illness. The
        Executive's continued employment shall not constitute consent to, or a
        waiver of rights with respect to, any act or failure to act constituting
        Good Reason hereunder.
        Change in Control
        . Change in Control shall mean the occurrence of any of the following
        events:
         i.   Any Person is or becomes the Beneficial Owner, directly or
              indirectly, of securities of the Company (not including in the
              securities beneficially owned by such Person any securities
              acquired directly from the Company or its affiliates other than in
              connection with the acquisition by the Company or its affiliates
              of a business) representing twenty percent (20%) or more of the
              combined voting power of the Company's then outstanding
              securities; or
         ii.  The following individuals cease for any reason to constitute a
              majority of the number of directors then serving: individuals who,
              on the Effective Date, constitute the Board and any new director
              (other than a director whose initial assumption of office is in
              connection with an actual or threatened election contest,
              including but not limited to a consent solicitation, relating to
              the election of directors of the Company) whose appointment or
              election by the Board or nomination for election by the Company's
              shareholders was approved or recommended by a vote of at least
              two-thirds (2/3) of the directors then still in office who either
              were directors on the date hereof or whose appointment, election
              or nomination for election was previously so approved or
              recommended; or
         iii. There is consummated a merger or consolidation of the Company or
              any direct or indirect subsidiary of the Company with any other
              corporation, other than (A) a merger or consolidation which would
              result in the voting securities of the Company outstanding
              immediately prior to such merger or consolidation continuing to
              represent (either by remaining outstanding or by being converted
              into voting securities of the surviving entity or any parent
              thereof), in combination with the ownership of any trustee or
              other fiduciary holding securities under an employee benefit plan
              of the Company or any subsidiary of the Company, at least sixty
              percent (60%) of the combined voting power of the securities of
              the Company or such surviving entity or any parent thereof
              outstanding immediately after such merger or consolidation, or (B)
              a merger or consolidation effected to implement a recapitalization
              of the Company (or similar transaction) in which no Person is or
              becomes the beneficial owner, directly or indirectly, of
              securities of the Company (not including in the securities
              beneficially owned by such Person any securities acquired directly
              from the Company or its affiliates other than in connection with
              the acquisition by the Company or its affiliates of a business)
              representing twenty percent (20%) or more of the combined voting
              power of the Company's then outstanding securities; or
         iv.  The shareholders of the Company approve a plan of complete
              liquidation or dissolution of the Company or there is consummated
              an agreement for the sale or disposition by the Company of all or
              substantially all of the Company's assets, other than a sale or
              disposition by the Company of all or substantially all of the
              Company's assets to an entity, at least sixty percent (60%) of the
              combined voting power of the voting securities of which are owned
              by shareholders of the Company in substantially the same
              proportions as their ownership of the Company immediately prior to
              such sale.
    
        "Person" shall have the meaning given in section 3(a)(9) of the
        Securities Exchange Act of 1934 (the "Exchange Act"), as modified and
        used in sections 13(d) and 14(d) thereof, except that such term shall
        not include (i) the Company or any of its subsidiaries, (ii) a trustee
        or other fiduciary holding securities under an employee benefit plan of
        the Company or any of its affiliates, (iii) an underwriter temporarily
        holding securities pursuant to an offering of such securities, (iv) a
        corporation owned, directly or indirectly, by the shareholders of the
        Company in substantially the same proportions as their ownership of
        stock of the Company, or (v) a person or group as used in Rule 13d-l(b)
        under the Exchange Act.
    
        "Beneficial Owner" shall have the meaning set forth in Rule 13d-3 under
        the Exchange Act.
    
        Notwithstanding the foregoing, any event or transaction which would
        otherwise constitute a Change in Control (a "Transaction") shall not
        constitute a Change in Control for purposes of this Agreement if, in
        connection with the Transaction, the Executive participates as an equity
        investor in the acquiring entity or any of its affiliates (the
        "Acquiror"). For purposes of the preceding sentence, the Executive shall
        not be deemed to have participated as an equity investor in the Acquiror
        by virtue of (i) obtaining beneficial ownership of any equity interest
        in the Acquiror as a result of the grant to the Executive of an
        incentive compensation award under one or more incentive plans of the
        Acquiror (including, but not limited to, the conversion in connection
        with the Transaction of incentive compensation awards of the Company
        into incentive compensation awards of the Acquiror), on terms and
        conditions not substantially more generous than those applicable to
        other executive officers (of either the Company or the Acquiror)
        immediately prior to the Transaction, after taking into account normal
        differences attributable to job responsibilities, title and the like,
        (ii) obtaining beneficial ownership of any equity interest in the
        Acquiror on terms and conditions substantially equivalent to those
        obtained in the Transaction by all other shareholders of the Company, or
        (iii) obtaining beneficial ownership of any equity interest in the
        Acquiror in a manner unrelated to a Transaction.
    
        Notice of Termination
        . During the Employment Period, any purported termination of the
        Executive's employment (other than by reason of death) shall be
        communicated by written Notice of Termination from one party hereto to
        the other party hereto in accordance with Section 13(b). For purposes of
        this Agreement, a "Notice of Termination" shall mean a notice that shall
        indicate the specific termination provision in this Agreement relied
        upon, if any, and shall set forth in reasonable detail the facts and
        circumstances claimed to provide a basis for termination of the
        Executive's employment under the provision so indicated. Further, a
        Notice of Termination for Cause is required to include a copy of a
        resolution duly adopted by the affirmative vote of not less than
        three-fourths (3/4) of the entire membership of the Board at a meeting
        of the Board that was called and held no more than ninety (90) days
        after the date the Board had knowledge of the most recent act or
        omission giving rise to such breach for the purpose of considering such
        termination (after reasonable notice to the Executive and an opportunity
        for the Executive, together with the Executive's counsel, to be heard
        before the Board and, if possible with respect to clause (i) of the
        definition of Cause herein, to cure the breach that was the basis for
        the Notice of Termination for Cause within a reasonable period) finding
        that, in the good faith opinion of the Board, the Executive was guilty
        of conduct set forth in clause (i) or (ii) of the definition of Cause
        herein, and specifying the particulars thereof in detail. Unless the
        Board determines otherwise, a Notice of Termination by the Executive
        alleging a termination for Good Reason must be made within 180 days of
        the act or failure to act that the Executive alleges to constitute Good
        Reason.
        Date of Termination
        . "Date of Termination," with respect to any purported termination of
        the Executive's employment during the Employment Period, shall mean the
        date specified in the Notice of Termination (which, in the case of a
        termination by the Company, for reasons other than Cause, shall not be
        less than thirty (30) days and, in the case of a termination by the
        Executive, shall not be less than fifteen (15) days (thirty (30) days if
        the termination is with Good Reason) nor more than sixty (60) days),
        from the date such Notice of Termination is given).

    Obligations of the Company Upon Termination
    .
    Termination by the Company Other Than for Cause, Death or Disability or by
    the Executive for Good Reason
    . During the Employment Period, if the Company shall terminate the
    Executive's employment (other than for Cause, death or Disability) or the
    Executive shall terminate his employment for Good Reason (termination in any
    such case being referred to as "Termination"), the Company shall pay to the
    Executive the amounts, and provide the Executive with the benefits,
    described in this Section 5 (hereinafter referred to as the "Severance
    Payments") and any amounts or benefits described in Section 7 of this
    Agreement. The amounts specified in this Section 5(a) shall be paid within
    thirty (30) days after the Date of Termination.
    Lump Sum Payment
    . In lieu of any further payments of Annual Base Salary or annual Incentive
    Compensation Awards to the Executive for periods subsequent to the Date of
    Termination, the Company shall pay to the Executive a lump sum amount in
    cash equal to the product of (X) the sum of (A) the Executive's Annual Base
    Salary and (B) the greater of the Executive's target bonus for the year of
    termination under the Company's Executive Incentive Plan (or any successor
    plan) or the average of the three (3) years' highest gross annual bonus
    awards, not necessarily consecutive, paid by the Company (or its
    predecessor) to the Executive in the five (5) years preceding the year of
    termination, and (Y) the number of years remaining in the Employment Period
    (including fractional years) minus one (1), but in no event shall the net
    multiplier be less than one (1);
    provided, however
    , that in the event of a Termination following a Change in Control such net
    multiplier shall not be less than two (2).
    Accrued Obligations
    . The Company shall pay the Executive a lump sum amount in cash equal to the
    sum of (A) the Executive's Annual Base Salary through the Date of
    Termination to the extent not theretofore paid, (B) an amount equal to any
    annual Incentive Compensation Awards earned with respect to fiscal years
    ended prior to the year that includes the Date of Termination to the extent
    not theretofore paid and (C) an amount equal to the target amount payable
    under any annual Incentive Compensation Awards for the fiscal year that
    includes the Date of Termination or, if greater, the average of the three
    (3) years' highest gross annual bonus awards, not necessarily consecutive,
    paid by the Company (or its predecessor) to the Executive under the
    Company's Executive Incentive Plan (or any predecessor or successor plan) in
    the five (5) years preceding the year of Termination multiplied by a
    fraction the numerator of which shall be the number of days from the
    beginning of such fiscal year to and including the Date of Termination and
    the denominator of which shall be 365, in each case to the extent not
    theretofore paid. (The amounts specified in clauses (A), (B) and (C) shall
    be hereinafter referred to as the "Accrued Obligations.")
    Other
    . The Executive's termination shall be a "Qualifying Termination" as defined
    in the Split Dollar Life Insurance Agreement entered into between the
    Executive and the Company.
    Accelerated Vesting and Payment of Long-Term Incentive Awards
    . Notwithstanding the provisions of any applicable equity-based compensation
    plan or award agreement to the contrary,
    a
    ll equity-based incentive compensation awards (including, without
    limitation, stock options, stock appreciation rights, restricted stock
    awards, restricted stock units, performance share awards, section 162(m)
    awards, and dividend equivalents) held by the Executive under any annual
    incentive compensation plan or long-term incentive compensation plan
    maintained by the Company shall immediately vest and become exercisable or
    payable, as the case may be, as of the Date of Termination, to be exercised
    or paid, as the case may be, in accordance with the terms of the applicable
    plan and award agreement, and any restrictions on any such awards shall
    automatically lapse;
    provided, however
    , that any stock options granted on or after the Effective Date shall remain
    outstanding and exercisable until the earlier of (A) the later of sixty (60)
    months following the date on which the Executive would attain age 65 or the
    period specified in the applicable award agreements or (B) the expiration of
    the original term of such award (it being understood that all awards granted
    prior to the Effective Date shall remain outstanding and exercisable for a
    period that is no less than that provided for in the applicable agreement in
    effect as of the date of grant). Any such equity-based awards tied to
    performance criteria shall be assumed to have been achieved at target
    levels. The Company shall pay to the Executive, with respect to all
    cash-based, long-term Incentive Compensation Awards (excluding those awards
    which constitute an equity award as described above) made to the Executive
    that are outstanding under any long-term Incentive Compensation Plan
    maintained by the Company or any affiliate an amount equal to the target
    amount payable under such long-term Incentive Compensation Awards multiplied
    by a fraction, the numerator of which shall be the number of days from the
    beginning of the award cycle to and including the Date of Termination, and
    the denominator of which shall be the number of days in the cycle as
    originally granted.
    Continuation of Welfare Benefits
    . For a period of three (3) years or until the Executive is eligible for
    retiree medical benefits, whichever is longer, immediately following the
    Date of Termination, the Company shall arrange to provide the Executive and
    his dependents with life, disability, accident and health insurance benefits
    substantially similar to those provided to the Executive and his dependents
    immediately prior to the Date of Termination,
    provided, however
    , that if the Executive becomes employed with another employer and is
    eligible to receive life, disability, accident and health insurance benefits
    under another employer-provided plan, the benefits under the Company's plans
    shall be secondary to those provided under such other plan during such
    applicable period of eligibility, and
    further provided, however
    , that in the event of a termination following a Change in Control such
    period shall not be less than the number of years until the Executive
    reaches normal retirement age as defined under the Company's tax-qualified
    plans. In the event the Executive is ineligible under the terms of such
    benefit plans to continue to be so covered, in such event, the Company shall
    provide the Executive with substantially equivalent coverage through other
    sources or shall provide the Executive with a lump sum payment in such
    amount that, after all taxes on that amount, shall be equal to the cost to
    the Executive of providing the Executive such benefit coverage. Following
    the Date of Termination, the Company shall continue to pay sufficient
    premiums under the Sempra Energy Executive Life Insurance Plan to provide
    (1) a death benefit equal to two times the sum of (A) Annual Base Salary
    plus (B) the average of the three (3) highest bonuses paid under the
    Company's Executive Incentive Plan (or any predecessor or successor plan)
    during the preceding ten years ("pre-age 65 benefit"), and (2) a cash value
    at age 65 sufficient to maintain that insurance in effect thereafter without
    any further premiums and with a death benefit of one-half the pre-age 65
    benefit. All premiums will be grossed up for taxes using the maximum
    marginal federal and state income tax rates.
    Outplacement Services
    . The Executive shall receive outplacement services suitable to his position
    for a period of twenty-four (24) months following the Date of Termination
    (thirty-six (36) months following the Date of Termination in the event of a
    Termination following a Change in Control), in the aggregate amount not to
    exceed $50,000. Notwithstanding the foregoing, the Executive shall cease to
    receive outplacement services on the date the Executive accepts employment
    with a subsequent employer.
    Financial Planning Services
    . The Executive shall receive financial planning services for a period of
    twenty-four (24) months following the Date of Termination (thirty-six (36)
    months following the Date of Termination in the event of a Termination
    following a Change in Control), at a level consistent with the benefits
    provided under the Company's financial planning program for the Executive,
    as in effect immediately prior to the Date of Termination.
    Change in Control
    . Notwithstanding anything contained herein, if a Change in Control occurs
    and if, prior to the date of the Change in Control, the Executive's
    employment is terminated by the Company (other than for Cause, death or
    Disability), or by the Executive for Good Reason, and if such Termination
    (i) was at the request of a third party who has taken steps reasonably
    calculated to effect the Change in Control or (ii) otherwise arose in
    connection with or in anticipation of the Change in Control, then such
    Termination shall be treated as a Termination following a Change in Control
    for purposes of this Agreement (including, without limitation, for purposes
    of determining the amounts of the Severance Payments under this Section 5).
    Deferral of Payments
    . The Executive shall have the right to elect to defer any lump sum payments
    received by the Executive pursuant to this Section 5(a) under the terms and
    conditions of the Company's nonqualified deferred compensation plan.
    
    Termination by the Company for Cause or by the Executive Other than for Good
    Reason
    . If the Executive's employment shall be terminated for Cause during the
    Employment Period, or if the Executive terminates employment during the
    Employment Period other than for Good Reason, the Company shall have no
    further obligations to the Executive under this Agreement other than the
    Accrued Obligations and any amounts or benefits described in Section 7 of
    this Agreement.
    Termination due to Death or Disability
    . If the Executive's employment shall terminate by reason of death or
    Disability, the Company shall pay the Executive or his estate, as the case
    may be, the Accrued Obligations and, solely in the case of termination by
    reason of Disability, the benefit described in Section 5(a)(iii), and any
    amounts or benefits described in Section 7 of this Agreement. Such payments
    shall be in addition to those rights and benefits to which the Executive or
    his estate may be entitled under the relevant Company plans or programs.
    Retirement Date/Expiration of Employment Period
    . If the Executive remains employed with the Company through the Retirement
    Date or the Executive elects to retire early pursuant to Section 2(a), the
    Company shall pay to the Executive the amounts, and provide the Executive
    with the benefits, described in this Section 5(d) and any amounts or
    benefits described in Section 7:
     i.   The Accrued Obligations.
     ii.  The Executive shall continue to participate in the Company's Executive
          Medical Plan with benefits substantially similar to those provided to
          the Executive and his dependents immediately prior to the Retirement
          Date for a period of five (5) years following the Retirement Date. In
          the event the Executive is ineligible under the terms of the Company's
          Executive Medical Plan to continue to be so covered, the Company shall
          provide the Executive with substantially equivalent coverage through
          other sources or shall provide the Executive with a lump sum payment
          in such amount that, after all taxes on that amount, shall be equal to
          the cost to the Executive of providing the Executive such benefit
          coverage.
     iii. Notwithstanding the provisions of any applicable equity-based
          compensation plan or award agreement to the contrary, all equity-based
          incentive compensation awards (including, without limitation, stock
          options, stock appreciation rights, restricted stock awards,
          restricted stock units, performance share awards, section 162(m)
          awards, and dividend equivalents) held by the Executive under any
          annual incentive compensation plan or long-term incentive compensation
          plan maintained by the Company shall immediately vest and become
          exercisable or payable, as the case may be, as of the Date of
          Termination, to be exercised or paid, as the case may be, in
          accordance with the terms of the applicable plan and award agreement,
          and any restrictions on any such awards shall automatically lapse;
          provided, however, that any stock options granted on or after the
          Effective Date shall remain outstanding and exercisable until the
          earlier of (A) the later of sixty (60) months following the date on
          which the Executive would attain age 65 or the period specified in the
          applicable award agreements or (B) the expiration of the original term
          of such award (it being understood that all awards granted prior to
          the Effective Date shall remain outstanding and exercisable for a
          period that is no less than that provided for in the applicable
          agreement in effect as of the date of grant). Any such equity-based
          awards tied to performance criteria shall be assumed to have been
          achieved at target levels. The Company shall pay to the Executive,
          with respect to all cash-based, long-term Incentive Compensation
          Awards (excluding those awards which constitute an equity award as
          described above) made to the Executive that are outstanding under any
          long-term Incentive Compensation Plan maintained by the Company or any
          affiliate an amount equal to the target amount payable under such
          long-term Incentive Compensation Awards multiplied by a fraction, the
          numerator of which shall be the number of days from the beginning of
          the award cycle to and including the Date of Termination, and the
          denominator of which shall be the number of days in the cycle as
          originally granted.
     iv.  The Executive shall be eligible for the administrative support and
          services offered to retiring Chief Executive Officers of the Company
          in accordance with past practices of the Company, including access to
          and use of otherwise available Company facilities (such as offices,
          transportation, part-time secretarial support and other support
          services) as the Executive reasonably requests for a period of five
          (5) years following the Retirement Date.
     v.   If requested by the Executive, the Executive shall continue to receive
          financial planning services following the Retirement Date until the
          first anniversary of the Executive's death.

    Certain Additional Payments by the Company.
    

 1. Anything in this Agreement to the contrary notwithstanding and except as set
    forth below, in the event it shall be determined that any payment or
    distribution in the nature of compensation (within the meaning of Section
    280G(b)(2) of the Code) to or for the benefit of the Executive, whether paid
    or payable pursuant to this Agreement or otherwise (the "Payment") would be
    subject (in whole or in part) to the excise tax imposed by Section 4999 of
    the Code, together with any interest or penalties imposed with respect to
    such excise tax (collectively, "Excise Tax"), then the Executive shall be
    entitled to receive an additional payment (the "Gross-Up Payment") in an
    amount such that, after payment by the Executive of all taxes (and any
    interest or penalties imposed with respect to such taxes), including,
    without limitation, any income taxes (and any interest and penalties imposed
    with respect thereto) and Excise Tax imposed upon the Gross-Up Payment, the
    Executive retains an amount of the Gross-Up Payment equal to the Excise Tax
    imposed upon the Payments. The Company's obligation to make Gross-Up
    Payments under this Section 6 shall not be conditioned upon the Executive's
    termination of employment. For purposes of determining the amount of any
    Gross-Up Payment, the Executive shall be deemed to pay federal income tax at
    the highest marginal rate of federal income taxation in the calendar year in
    which the Gross-Up Payment is to be made and state and local income taxes at
    the highest marginal rate of taxation in the state and locality of the
    Executive's residence on the date on which the Gross-Up Payment is
    calculated for purposes of this Section 6, net of the maximum reduction in
    federal income taxes which could be obtained from deduction of such state
    and local taxes.
 2. Subject to the provisions of Section 6(c), all determinations required to be
    made under this Section 6, including whether and when a Gross-Up Payment is
    required, the amount of such Gross-Up Payment and the assumptions to be
    utilized in arriving at such determination, shall be made by a nationally
    recognized accounting firm as may be agreed by the Company and the Executive
    (the "Accounting Firm"); provided, that the Accounting Firm's determination
    shall be made based upon "substantial authority" within the meaning of
    Section 6662 of the Code. The Accounting Firm shall provide detailed
    supporting calculations both to the Company and the Executive within 15
    business days of the receipt of notice from the Executive that there has
    been a Payment or such earlier time as is requested by the Company. All fees
    and expenses of the Accounting Firm shall be borne solely by the Company.
    Any Gross-Up Payment, as determined pursuant to this Section 6, shall be
    paid by the Company to the Executive within 5 days of the receipt of the
    Accounting Firm's determination. Any determination by the Accounting Firm
    shall be binding upon the Company and the Executive. As a result of the
    uncertainty in the application of Section 4999 of the Code at the time of
    the initial determination by the Accounting Firm hereunder, it is possible
    that Gross-Up Payments that will not have been made by the Company should
    have been made (the "Underpayment"), consistent with the calculations
    required to be made hereunder. In the event the Company exhausts its
    remedies pursuant to Section 6(c) and the Executive thereafter is required
    to make a payment of any Excise Tax, the Accounting Firm shall determine the
    amount of the Underpayment that has occurred and any such Underpayment shall
    be promptly paid by the Company to or for the benefit of the Executive.
 3. The Executive shall notify the Company in writing of any claim by the
    Internal Revenue Service that, if successful, would require the payment by
    the Company of the Gross-Up Payment. Such notification shall be given as
    soon as practicable, but no later than 10 business days after the Executive
    is informed in writing of such claim. The Executive shall apprise the
    Company of the nature of such claim and the date on which such claim is
    requested to be paid. The Executive shall not pay such claim prior to the
    expiration of the 30-day period following the date on which the Executive
    gives such notice to the Company (or such shorter period ending on the date
    that any payment of taxes with respect to such claim is due). If the Company
    notifies the Executive in writing prior to the expiration of such period
    that the Company desires to contest such claim, the Executive shall:
     i.   give the Company any information reasonably requested by the Company
          relating to such claim,
     ii.  take such action in connection with contesting such claim as the
          Company shall reasonably request in writing from time to time,
          including, without limitation, accepting legal representation with
          respect to such claim by an attorney reasonably selected by the
          Company,
     iii. cooperate with the Company in good faith in order effectively to
          contest such claim, and
     iv.  permit the Company to participate in any proceedings relating to such
          claim;

    provided, however

    , that the Company shall bear and pay directly all costs and expenses
    (including additional interest and penalties) incurred in connection with
    such contest, and shall indemnify and hold the Executive harmless, on an
    after-tax basis, for any Excise Tax, income tax or any other taxes
    (including interest and penalties) imposed as a result of such
    representation and payment of costs and expenses. Without limitation on the
    foregoing provisions of this Section 6(c), the Company shall control all
    proceedings taken in connection with such contest, and, at its sole
    discretion, may pursue or forgo any and all administrative appeals,
    proceedings, hearings and conferences with the applicable taxing authority
    in respect of such claim and may, at its sole discretion, either direct the
    Executive to pay the tax claimed and sue for a refund or contest the claim
    in any permissible manner, and the Executive agrees to prosecute such
    contest to a determination before any administrative tribunal, in a court of
    initial jurisdiction and in one or more appellate courts, as the Company
    shall determine;
    provided, however
    , that, if the Company directs the Executive to pay such claim and sue for a
    refund, the Company shall advance the amount of such payment to the
    Executive, on an interest-free basis, and shall indemnify and hold the
    Executive harmless, on an after-tax basis, from any Excise Tax, income tax
    or any other taxes (including interest or penalties) imposed with respect to
    such advance or with respect to any imputed income in connection with such
    advance; and
    provided
    ,
    further
    , that any extension of the statute of limitations relating to payment of
    taxes for the taxable year of the Executive with respect to which such
    contested amount is claimed to be due is limited solely to such contested
    amount. Furthermore, the Company's control of the contest shall be limited
    to issues with respect to which the Gross-Up Payment would be payable
    hereunder, and the Executive shall be entitled to settle or contest, as the
    case may be, any other issue raised by the Internal Revenue Service or any
    other taxing authority.

    

 4. If, after the receipt by the Executive of a Gross-Up Payment or an amount
    advanced by the Company pursuant to Section 6(c), the Executive becomes
    entitled to receive any refund with respect to the Excise Tax to which such
    Gross-Up Payment relates or with respect to such claim, the Executive shall
    (subject to the Company's complying with the requirements of Section 6(c),
    if applicable) promptly pay to the Company the amount of such refund
    (together with any interest paid or credited thereon after taxes applicable
    thereto). If, after the receipt by the Executive of an amount advanced by
    the Company pursuant to Section 6(c), a determination is made that the
    Executive shall not be entitled to any refund with respect to such claim and
    the Company does not notify the Executive in writing of its intent to
    contest such denial of refund prior to the expiration of 30 days after such
    determination, then such advance shall be forgiven and shall not be required
    to be repaid and the amount of such advance shall offset, to the extent
    thereof, the amount of Gross-Up Payment required to be paid.
 5. Notwithstanding any other provision of this Section 6, the Company may, in
    its sole discretion, withhold and pay over to the Internal Revenue Service
    or any other applicable taxing authority, for the benefit of the Executive,
    all or any portion of any Gross-Up Payment, and the Executive hereby
    consents to such withholding. If such payment is made by the Company to the
    Internal Revenue Service or other applicable taxing authority, then the
    Executive shall not be entitled to payment pursuant to Section 6(b) above.
 6. Any other liability for unpaid or unwithheld Excise Taxes shall be borne
    exclusively by the Company, in accordance with Section 3403 of the Code. The
    foregoing sentence shall not in any manner relieve the Company of any of its
    obligations under this Agreement.

Nonexclusivity of Rights.

Nothing in this Agreement shall prevent or limit the Executive's continuing or
future participation in any benefit, plan, program, policy or practice provided
by the Company and for which the Executive may qualify (except with respect to
any benefit to which the Executive has waived his rights in writing), including
without limitation any and all indemnification arrangements in favor of the
Executive (whether under agreements or under the Company's charter documents or
otherwise), and insurance policies covering the Executive, nor shall anything
herein limit or otherwise affect such rights as the Executive may have under any
other contract or agreement entered into after the Effective Date with the
Company. Amounts which are vested benefits or which the Executive is otherwise
entitled to receive under any benefit, plan, policy, practice or program of, or
any contract or agreement entered into with, the Company shall be payable in
accordance with such benefit, plan, policy, practice or program or contract or
agreement except as explicitly modified by this Agreement. At all times during
the Executive's employment with the Company and thereafter until the expiration
of all applicable statutes of limitation, the Company shall provide the
Executive with indemnification and D& O insurance insuring the Executive against
insurable events which occur or have occurred while the Executive was a director
or executive officer of the Company, on terms and conditions that are at least
as generous as that then provided to any other current or former director or
executive officer of the Company or any affiliate.

Full Settlement Mitigation.

The Company's obligation to make the payments provided for in this Agreement and
otherwise to perform its obligations hereunder shall not be affected by any
set-off, counterclaim, recoupment, defense or other claim, right or action which
the Company may have against the Executive or others, provided that nothing
herein shall preclude the Company from separately pursuing recovery from the
Executive based on any such claim. In no event shall the Executive be obligated
to seek other employment or take any other action by way of mitigation of the
amounts (including amounts for damages for breach) payable to the Executive
under any of the provisions of this Agreement and such amounts shall not be
reduced whether or not the Executive obtains other employment.

Dispute Resolution.

Any disagreement, dispute, controversy or claim arising out of or relating to
this Agreement or the interpretation of this Agreement or any arrangements
relating to this Agreement or contemplated in this Agreement or the breach,
termination or invalidity thereof shall be settled by final and binding
arbitration administered by JAMS/Endispute in San Diego, California in
accordance with the then existing JAMS/Endispute Arbitration Rules and
Procedures for Employment Disputes. In the event of such an arbitration
proceeding, the Executive and the Company shall select a mutually acceptable
neutral arbitrator from among the JAMS/Endispute panel of arbitrators. In the
event the Executive and the Company cannot agree on an arbitrator, the
Administrator of JAMS/Endispute will appoint an arbitrator. Neither the
Executive nor the Company nor the arbitrator shall disclose the existence,
content or results of any arbitration hereunder without the prior written
consent of all parties. Except as provided herein, the Federal Arbitration Act
shall govern the interpretation, enforcement and all proceedings. The arbitrator
shall apply the substantive law (and the law of remedies, if applicable) of the
state of California, or federal law, or both, as applicable and the arbitrator
is without jurisdiction to apply any different substantive law. The arbitrator
shall have the authority to entertain a motion to dismiss and/or a motion for
summary judgment by any party and shall apply the standards governing such
motions under the Federal Rules of Civil Procedure. The arbitrator shall render
an award and a written, reasoned opinion in support thereof. Judgment upon the
award may be entered in any court having jurisdiction thereof.

Executive's Covenants.
Confidentiality
. The Executive acknowledges that in the course of his employment with the
Company, he has acquired non-public privileged or confidential information and
trade secrets concerning the operations, future plans and methods of doing
business ("Proprietary Information") of the Company, its subsidiaries and
affiliates; and the Executive agrees that it would be extremely damaging to the
Company, its subsidiaries and affiliates if such Proprietary Information were
disclosed to a competitor of the Company, its subsidiaries and affiliates or to
any other person or corporation. The Executive understands and agrees that all
Proprietary Information has been divulged to the Executive in confidence and
further understands and agrees to keep all Proprietary Information secret and
confidential (except for such information which is or becomes publicly available
other than as a result of a breach by the Executive of this provision or
information the Executive is required by any governmental, administrative or
court order to disclose) without limitation in time. In view of the nature of
the Executive's employment and the Proprietary Information the Executive has
acquired during the course of such employment, the Executive likewise agrees
that the Company, its subsidiaries and affiliates would be irreparably harmed by
any disclosure of Proprietary Information in violation of the terms of this
paragraph and that the Company, its subsidiaries and affiliates shall therefore
be entitled to preliminary and/or permanent injunctive relief prohibiting the
Executive from engaging in any activity or threatened activity in violation of
the terms of this paragraph and to any other relief available to them. Inquiries
regarding whether specific information constitutes Proprietary Information shall
be directed to the Board provided that the Company shall not unreasonably
classify information as Proprietary Information.
Non-Solicitation of Employees
. The Executive recognizes that he possesses and will possess confidential
information about other employees of the Company, its subsidiaries and
affiliates relating to their education, experience, skills, abilities,
compensation and benefits, and inter-personal relationships with customers of
the Company, its subsidiaries and affiliates. The Executive recognizes that the
information he possesses and will possess about these other employees is not
generally known, is of substantial value to the Company, its subsidiaries and
affiliates in developing their business and in securing and retaining customers,
and has been and will be acquired by him because of his business position with
the Company, its subsidiaries and affiliates. The Executive agrees that, during
the Employment Period and for a period of one (1) year thereafter, he will not,
directly or indirectly, solicit or recruit any employee of the Company, its
subsidiaries or affiliates for the purpose of being employed by him or by any
competitor of the Company, its subsidiaries or affiliates on whose behalf he is
acting as an agent, representative or employee and that he will not convey any
such confidential information or trade secrets about other employees of the
Company, its subsidiaries and affiliates to any other person;
provided, however
, that it shall not constitute a solicitation or recruitment of employment in
violation of this paragraph to discuss employment opportunities with any
employee of the Company, its subsidiaries or affiliates who has either first
contacted the Executive or regarding whose employment the Executive has
discussed with and received the written approval of the Chairman of the Board
prior to making such solicitation or recruitment. In view of the nature of the
Executive's employment with the Company, the Executive likewise agrees that the
Company, its subsidiaries and affiliates would be irreparably harmed by any
solicitation or recruitment in violation of the terms of this paragraph and that
the Company, its subsidiaries and affiliates shall therefore be entitled to
preliminary and/or permanent injunctive relief prohibiting the Executive from
engaging in any activity or threatened activity in violation of the terms of
this paragraph and to any other relief available to them.
Release; Lump Sum Payment
. In the event the Executive is terminated during the Employment Period by the
Company other than for Cause, death or Disability or the Executive shall
terminate his employment for Good Reason, if the Executive agrees (i) to the
covenants described in subsections (a) and (b) above, (ii) to execute a release
(the "Release") of all claims substantially in the form attached hereto as
Exhibit A within forty-five days after the applicable Date of Termination and
does not revoke such release in accordance with the terms thereof, and (iii) to
provide the consulting services described in subsection (d), then in
consideration for such covenants, the Company shall pay the Executive a lump sum
amount in cash equal to the sum of (x) the Executive's Annual Base Salary, and
(y) the greater of the Executive's target bonus for the year of termination
under the Company's Executive Incentive Plan (or any successor plan) or the
average of the three (3) years' highest gross annual bonus awards, not
necessarily consecutive, paid by the Company (or its predecessor) to the
Executive under the Company's Executive Incentive Plan (or any predecessor or
successor plan) in the five (5) years preceding the year of termination. The
amount specified in this Section 10(c) shall be paid as soon as practicable
following the Executive's execution of the Release, and the Executive shall have
the right to elect to defer such payment under the terms and conditions of the
Company's nonqualified deferred compensation plan.
Consulting
. If the Executive agrees to the covenants described in subsection (c), then the
Executive shall have the obligation to provide consulting services to the
Company as an independent contractor, commencing on the Date of Termination and
ending on the second anniversary of the Date of Termination (the "Consulting
Period"). The Executive shall hold himself available at reasonable times and on
reasonable notice to render such consulting services as may be so assigned to
him by the Company's Board of Directors or its then Chief Executive Officer;
provided, however
, that unless the parties otherwise agree, the consulting services rendered by
the Executive during the Consulting Period shall not exceed 20 hours each month.
The Company agrees to use its best efforts during the Consulting Period to
secure the benefit of the Executive's consulting services so as to minimize the
interference with the Executive's other activities, including requiring the
performance of consulting services at the Company's offices only when such
services may not be reasonably performed off-site by the Executive.

Legal Fees.

The Company shall pay to the Executive all legal fees and expenses (including
but not limited to fees and expenses in connection with any arbitration)
incurred by the Executive in disputing in good faith any issue arising under
this Agreement relating to the termination of the Executive's employment or in
seeking in good faith to obtain or enforce any benefit or right provided by this
Agreement, but in each case only to the extent the arbitrator or court
determines that the Executive had a reasonable basis for such claim.

Successors.
Assignment by Executive
. This Agreement is personal to the Executive and without the prior written
consent of the Company shall not be assignable by the Executive otherwise than
by will or the laws of descent and distribution. This Agreement shall inure to
the benefit of and be enforceable by the Executive's legal representatives.
Successors and Assigns of Company
. This Agreement shall inure to the benefit of and be binding upon the Company,
its successors and assigns. The Company may not assign this Agreement to any
person or entity (except for a successor described in subsection (c)) without
the Executive's written consent.
Assumption
. The Company shall require any successor (whether direct or indirect, by
purchase, merger, consolidation or otherwise) to all or substantially all of the
business and/or assets of the Company to assume expressly and agree to perform
this Agreement in the same manner and to the same extent that the Company would
be required to perform it if no such succession had taken place. As used in this
Agreement, "Company" shall mean the Company as hereinbefore defined and any
successor to its businesses and/or assets as aforesaid that assumes and agrees
to perform this Agreement by operation of law or otherwise.

Miscellaneous.
Governing Law
. This Agreement shall be governed by and construed in accordance with the laws
of the State of California, without reference to its principles of conflict of
laws. The captions of this Agreement are not part of the provisions hereof and
shall have no force or effect. This Agreement may not be amended, modified,
repealed, waived, extended or discharged except by an agreement in writing
signed by the party against whom enforcement of such amendment, modification,
repeal, waiver, extension or discharge is sought. No person, other than pursuant
to a resolution of the Board or a committee thereof, shall have authority on
behalf of the Company to agree to amend, modify, repeal, waive, extend or
discharge any provision of this Agreement or anything in reference thereto.
Notices
. All notices and other communications hereunder shall be in writing and shall
be given by hand delivery to the other party or by registered or certified mail,
return receipt requested, postage prepaid, addressed, in either case, to the
Company's headquarters or to such other address as either party shall have
furnished to the other in writing in accordance herewith. Notices and
communications shall be effective when actually received by the addressee.
Severability
. The invalidity or unenforceability of any provision of this Agreement shall
not affect the validity or enforceability of any other provision of this
Agreement.
Taxes
. The Company may withhold from any amounts payable under this Agreement such
federal, state or local taxes as shall be required to be withheld pursuant to
any applicable law or regulation.
No Waiver
. The Executive's or the Company's failure to insist upon strict compliance with
any provision hereof or any other provision of this Agreement or the failure to
assert any right the Executive or the Company may have hereunder, including,
without limitation, the right of the Executive to terminate employment for Good
Reason pursuant to Section 4 of this Agreement, or the right of the Company to
terminate the Executive's employment for Cause pursuant to Section 4 of this
Agreement, shall not be deemed to be a waiver of such provision or right or any
other provision or right of this Agreement.
Entire Agreement
. This instrument contains the entire agreement of the Executive, the Company or
any predecessor or subsidiary thereof with respect to the subject matter hereof,
and all promises, representations, understandings, arrangements and prior
agreements are merged herein and superseded hereby including, but not limited
to, the Prior Employment Agreement.
Legal Fees
. The Company agrees to reimburse the Executive for the reasonable attorneys'
fees and costs incurred by the Executive in negotiating and documenting this
Agreement.

IN WITNESS WHEREOF, the Executive and, pursuant to due authorization from its
Board of Directors, the Company have caused this Agreement to be executed as of
the day and year first above written.

SEMPRA ENERGY

G. Joyce Rowland
Senior Vice President, Human Resources

Date

Stephen L. Baum
Chairman, President and Chief Executive Officer

Date

 

 

 

 

EXHIBIT A

GENERAL RELEASE

This GENERAL RELEASE (the "Agreement"), dated ___________, is made by and
between ______________________________, a California corporation (the "Company")
and ___________________________ ("you" or "your").

WHEREAS, you and the Company have previously entered into that certain
Employment Agreement dated September 17, 2002 (the "Employment Agreement"); and

WHEREAS, Section 10(c) of the Employment Agreement provides for the payment of a
benefit to you by the Company in consideration for certain covenants, including
your execution and non-revocation of a general release of claims by you against
the Company and its subsidiaries and affiliates.

NOW, THEREFORE, in consideration of the premises and the mutual covenants herein
contained, you and the Company hereby agree as follows:

ONE: Your signing of this Agreement confirms that your employment with the
Company shall terminate at the close of business on ____________, or earlier
upon our mutual agreement.

TWO: As a material inducement for the payment of the benefit under Section 10 of
that certain Employment Agreement between you and the Company, and except as
otherwise provided in this Agreement, you and the Company hereby irrevocably and
unconditionally release, acquit and forever discharge the other from any and all
Claims either may have against the other. For purposes of this Agreement and the
preceding sentence, the words "Releasee" or "Releasees" and "Claim" or "Claims,"
shall have the meanings set forth below:

(a) The words "Releasee" or "Releasees" shall refer to you and to the Company
and each of the Company's owners, stockholders, predecessors, successors,
assigns, agents, directors, officers, employees, representatives, attorneys,
advisors, parent companies, divisions, subsidiaries, affiliates (and agents,
directors, officers, employees, representatives, attorneys and advisors of such
parent companies, divisions, subsidiaries and affiliates), and all persons
acting by, through, under or in concert with any of them.

(b) The words "Claim" or "Claims" shall refer to any charges, complaints,
claims, liabilities, obligations, promises, agreements, controversies, damages,
actions, causes of action, suits, rights, demands, costs, losses, debts and
expenses (including attorneys' fees and costs actually incurred) of any nature
whatsoever, known or unknown, suspected or unsuspected, which you or the Company
now, in the past or, except as limited by law or regulation such as the Age
Discrimination in Employment Act (ADEA), in the future may have, own or hold
against any of the Releasees; provided, however, that the word "Claim" or
"Claims" shall not refer to any charges, complaints, claims, liabilities,
obligations, promises, agreements, controversies, damages, actions, causes of
action, suits, rights, demands, costs, losses, debts and expenses (including
attorneys' fees and costs actually incurred) arising under [identify severance,
employee benefits, stock option, indemnification and D&O and other agreements
containing duties, rights obligations etc. of either party that are to remain
operative]. Claims released pursuant to this Agreement by you and the Company
include, but are not limited to, rights arising out of alleged violations of any
contracts, express or implied, any tort, any claim that you failed to perform or
negligently performed or breached your duties during employment at the Company,
any legal restrictions on the Company's right to terminate employees or any
federal, state or other governmental statute, regulation, or ordinance,
including, without limitation: (1) Title VII of the Civil Rights Act of 1964
(race, color, religion, sex and national origin discrimination); (2) 42 U.S.C
Sec. 1981 (discrimination); (3) 29 U.S.C. Secs. 621-634 (age discrimination);
(4) 29 U.S.C. Sec.  206(d)(l) (equal pay); (5) 42 U.S.C. Secs. 12101, et seq.
(disability); (6) the California Constitution, Article I, Section 8
(discrimination); (7) the California Fair Employment and Housing Act
(discrimination, including race, color, national origin, ancestry, physical
handicap, medical condition, marital status, religion, sex or age); (8)
California Labor Code Section 1102.1 (sexual orientation discrimination); (9)
Executive Order 11246 (race, color, religion, sex and national origin
discrimination); (10) Executive Order 11141 (age discrimination); (11) Secs. 503
and 504 of the Rehabilitation Act of 1973 (handicap discrimination); (12) The
Worker Adjustment and Retraining Act (WARN Act); (13) the California Labor Code
(wages, hours, working conditions, benefits and other matters); (14) the Fair
Labor Standards Act (wages, hours, working conditions and other matters); the
Federal Employee Polygraph Protection Act (prohibits employer from requiring
employee to take polygraph test as condition of employment); and (15) any
federal, state or other governmental statute, regulation or ordinance which is
similar to any of the statutes described in clauses (1) through (14).

THREE: You and the Company expressly waive and relinquish all rights and
benefits afforded by any statute (including but not limited to Section 1542 of
the Civil Code of the State of California) which limits the effect of a release
with respect to unknown claims. You and the Company do so understanding and
acknowledging the significance of the release of unknown claims and the waiver
of statutory protection against a release of unknown claims (including but not
limited to Section 1542). Section 1542 of the Civil Code of the State of
California states as follows:

"A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES NOT KNOW OR
SUSPECT TO EXIST IN HIS FAVOR AT THE TIME OF EXECUTING THE RELEASE, WHICH IF
KNOWN BY HIM MUST HAVE MATERIALLY AFFECTED HIS SETTLEMENT WITH THE DEBTOR."

Thus, notwithstanding, the provisions of Section 1542 or of any similar statute,
and for the purpose of implementing a full and complete release and discharge of
the Releasees, you and the Company expressly acknowledge that this Agreement is
intended to include in its effect, without limitation, all Claims which are
known and all Claims which you or the Company do not know or suspect to exist in
your or the Company's favor at the time of execution of this Agreement and that
this Agreement contemplates the extinguishment of all such Claims.

FOUR: The parties acknowledge that they might hereafter discover facts different
from, or in addition to, those they now know or believe to be true with respect
to a Claim or Claims released herein, and they expressly agree to assume the
risk of possible discovery of additional or different facts, and agree that this
Agreement shall be and remain effective, in all respects, regardless of such
additional or different discovered facts.

FIVE: You hereby represent and acknowledge that you have not filed any Claim of
any kind against the Company or others released in this Agreement. You further
hereby expressly agree never to initiate against the Company or others released
in this Agreement any administrative proceeding, lawsuit or any other legal or
equitable proceeding of any kind asserting any Claims that are released in this
Agreement.

The Company hereby represents and acknowledges that it has not filed any Claim
of any kind against you or others released in this Agreement. The Company
further hereby expressly agrees never to initiate against you or others released
in this Agreement any administrative proceeding, lawsuit or any other legal or
equitable proceeding of any kind asserting any Claims that are released in this
Agreement.

SIX: You hereby represent and agree that you have not assigned or transferred,
or attempted to have assigned or transfer, to any person or entity, any of the
Claims that you are releasing in this Agreement.

The Company hereby represents and agrees that it has not assigned or
transferred, or attempted to have assigned or transfer, to any person or entity,
any of the Claims that it is releasing in this Agreement.

SEVEN: As a further material inducement to the Company to enter into this
Agreement, you hereby agree to indemnify and hold each of the Releasees harmless
from all loss, costs, damages, or expenses, including without limitation,
attorneys' fees incurred by Releasees, arising out of any breach of this
Agreement by you or the fact that any representation made in this Agreement by
you was false when made.

EIGHT: You and the Company represent and acknowledge that, in executing this
Agreement, neither is relying upon any representation or statement not set forth
in this Agreement or the Severance Agreement.

NINE:

(a) This Agreement shall not in any way be construed as an admission by the
Company that it has acted wrongfully with respect to you or any other person, or
that you have any rights whatsoever against the Company, and the Company
specifically disclaims any liability to or wrongful acts against you or any
other person, on the part of itself, its employees or its agents. This Agreement
shall not in any way be construed as an admission by you that you have acted
wrongfully with respect to the Company, or that you failed to perform your
duties or negligently performed or breached your duties, or that the Company had
good cause to terminate your employment.

(b) If you are a party or are threatened to be made a party to any proceeding by
reason of the fact that you were an officer [or director] of the Company, the
Company shall indemnify you against any expenses (including reasonable attorney
fees provided that counsel has been approved by the Company prior to retention),
judgments, fines, settlements, and other amounts actually or reasonably incurred
by you in connection with that proceeding, provided that you acted in good faith
and in a manner you reasonably believed to be in the best interest of the
Company. The limitations of California Corporations Code Section 317 shall apply
to this assurance of indemnification.

(c) You agree to cooperate with the Company and its designated attorneys,
representatives, and agents in connection with any actual or threatened
judicial, administrative or other legal or equitable proceeding in which the
Company is or may be become involved. Upon reasonable notice, you agree to meet
with and provide to the Company or its designated attorneys, representatives or
agents all information and knowledge you have relating to the subject matter of
any such proceeding.

TEN: This Agreement is made and entered into in California. This Agreement shall
in all respects be interpreted, enforced and governed by and under the laws of
the State of California. Any dispute about the validity, interpretation, effect
or alleged violation of this Agreement (an "arbitrable dispute") must be
submitted to arbitration in [Los Angeles][San Diego], California. Arbitration
shall take place before an experienced employment arbitrator licensed to
practice law in such state and selected in accordance with the Model Employment
Arbitration Procedures of the American Arbitration Association. Arbitration
shall be the exclusive remedy for any arbitrable dispute. The arbitrator in any
arbitrable dispute shall not have authority to modify or change the Agreement in
any respect. You and the Company shall each be responsible for payment of
one-half the amount of the arbitrator's fee(s). Should any party to this
Agreement institute any legal action or administrative proceeding against the
other with respect to any Claim waived by this Agreement or pursue any
arbitrable dispute by any method other than arbitration, the prevailing party
shall be entitled to recover from the nonprevailing party all damages, costs,
expenses and attorneys' fees incurred as a result of that action. The
arbitrator's decision and/or award will be fully enforceable and subject to an
entry of judgment by the Superior Court of the State of California for the
County of [Los Angeles][San Diego].

ELEVEN: Both you and the Company understand that this Agreement is final and
binding eight days after its execution and return. Should you nevertheless
attempt to challenge the enforceability of this Agreement as provided in
Paragraph TEN or, in violation of that Paragraph, through litigation, as a
further limitation on any right to make such a challenge, you shall initially
tender to the Company, by certified check delivered to the Company, all monies
received pursuant to Section 10(c) of the Employment Agreement, plus interest,
and invite the Company to retain such monies and agree with you to cancel this
Agreement and void the Company's obligations under Section 10(c) of the
Employment Agreement. In the event the Company accepts this offer, the Company
shall retain such monies and this Agreement shall be canceled and the Company
shall have no obligation under Section 10(c) of the Employment Agreement. In the
event the Company does not accept such offer, the Company shall so notify you,
and shall place such monies in an interest-bearing escrow account pending
resolution of the dispute between you and the Company as to whether or not this
Agreement and the Company's obligations under Section 10(c) of the Employment
Agreement shall be set aside and/or otherwise rendered voidable or
unenforceable. Additionally, any consulting agreement then in effect between you
and the Company shall be immediately rescinded with no requirement of notice.

TWELVE: Any notices required to be given under this Agreement shall be delivered
either personally or by first class United States mail, postage prepaid,
addressed to the respective parties as follows:

To Company:

[TO COME]
Attn: [TO COME]

To You:

_________________
_________________
_________________

THIRTEEN: You understand and acknowledge that you have been given a period of 45
days to review and consider this Agreement (as well as statistical data on the
persons eligible for similar benefits) before signing it and may use as much of
this 45-day period as you wish prior to signing. You are encouraged, at your
personal expense, to consult with an attorney before signing this Agreement. You
understand and acknowledge that whether or not you do so is your decision. You
may revoke this Agreement within seven days of signing it. If you wish to
revoke, the Company's Vice President, Human Resources must receive written
notice from you no later than the close of business on the seventh day after you
have signed the Agreement. If revoked, this Agreement shall not be effective and
enforceable and you will not receive payments or benefits under Section 10(c) of
the Employment Agreement.

FOURTEEN: This Agreement constitutes the entire agreement of the parties hereto
and supersedes any and all other agreements (except the Employment Agreement)
with respect to the subject matter of this Agreement, whether written or oral,
between you and the Company. All modifications and amendments to this Agreement
must be in writing and signed by the parties.

FIFTEEN: Each party agrees, without further consideration, to sign or cause to
be signed, and to deliver to the other party, any other documents and to take
any other action as may be necessary to fulfill the obligations under this
Agreement.

SIXTEEN: If any provision of this Agreement or the application thereof is held
invalid, the invalidity shall not affect other provisions or applications of the
Agreement which can be given effect without the invalid provisions or
application; and to this end the provisions of this Agreement are declared to be
severable.

SEVENTEEN: This Agreement may be executed in counterparts.

I have read the foregoing General Release and I accept and agree to the
provisions it contains and hereby execute it voluntarily and with full
understanding of its consequences. I am aware it includes a release of all known
or unknown claims.

DATED: __________

__________________________________________

DATED: __________

__________________________________________

You acknowledge that you first received this Agreement on [date].

_________________________