Exhibit 10.5

 
 Sempra Energy
 
 
2013 Long-Term Incentive Plan
 
 
(As Amended and Restated Effective December 15, 2015)

 

 

Contents
 
 
 
 
 

Article 1.  Establishment, Purpose, and Duration
Article 2.  Definitions
Article 3.  Administration
Article 4.  Shares Subject to This Plan and Maximum Awards
Article 5.  Eligibility and Participation
Article 6.  Stock Options
Article 7.  Stock Appreciation Rights
Article 8.  Restricted Stock and Restricted Stock Units
Article 9.  Stock Payment Awards
Article 10.  Dividend Equivalent Awards
Article 11.  Cash-Based Awards
Article 12.  Transferability of Awards
Article 13.  Performance Measures
Article 14.  Beneficiary Designation
Article 15.  Rights of Participants
Article 16.  Change in Control
Article 17.  Amendment, Modification, Suspension, and Terminations
Article 18.  Withholding
Article 19.  Successors
Article 20.  General Provisions

 
 
 
 
 
 
 

Sempra Energy
2013 Long-Term Incentive Plan

Article 1.  Establishment, Purpose, and Duration
 
1.1          Establishment.  Sempra Energy, a California corporation, has
established an incentive compensation plan to be known as the Sempra Energy 2013
Long-Term Incentive Plan (the “Plan”), as set forth in this document. This Plan
was previously approved by the Board of Directors of Sempra Energy and the
shareholders of the Sempra Energy.  This Plan became effective on May 10, 2013
(the “Effective Date”) and shall remain in effect as provided in Section 1.3
hereof.
 
This Plan permits the grant of Nonqualified Stock Options, Incentive Stock
Options, Stock Appreciation Rights, Restricted Stock, Restricted Stock Units,
Stock Payment Awards, Dividend Equivalent Awards and Cash-Based Awards.
 

 
The following provisions constitute an amendment, restatement, and continuation
of the Plan as of December 15, 2015 (the “Approval Date”), the date the Board of
Directors of Sempra Energy approved this amendment and restatement.
 
1.2          Purpose of This Plan.  The purpose of this Plan is to provide
compensation awards to Employees and Directors of the Company and its
Subsidiaries that align the interests of such Employees and Directors with the
interests of the Company and its shareholders.  A further purpose of this Plan
is to permit the Company and its Subsidiaries to attract and retain Employees or
Directors and to provide Employees and Directors with an opportunity to acquire
an equity interest in the Company.
 
1.3          Duration of This Plan.  Unless sooner terminated as provided
herein, this Plan shall terminate ten (10) years from the date of shareholder
approval of this Plan.  After this Plan is terminated, no Awards may be granted
but Awards previously granted shall remain outstanding in accordance with their
applicable terms and conditions and this Plan’s terms and conditions.
 
1.4          Prior Plans.  No further grants shall be made under the Prior
Plans, as defined in Article 2, from and after the Effective Date of this Plan.
 
Article 2.  Definitions
 
Whenever used in this Plan, the following terms shall have the meanings set
forth below, and when the meaning is intended, the initial letter of the word
shall be capitalized.
 
2.1  
“Affiliate” has the meaning set forth in Rule 12b-2 promulgated under the
Exchange Act.

 
2.2  
“Annual Award Limit” or “Annual Award Limits” have the meaning set forth in
Section 4.3.

 
2.3  
“Award” means, individually or collectively, a grant under this Plan of
Nonqualified Stock Options, Incentive Stock Options, Stock Appreciation Rights,
Restricted Stock, Restricted Stock Units, Stock Payment Awards, Dividend
Equivalent Awards or Cash-Based Awards, in each case subject to the terms of
this Plan.

 
2.4  
“Award Agreement” means either: (a) a written agreement entered into by the
Company and a Participant setting forth the terms and provisions applicable to
an Award granted under this Plan, or (b) a written statement issued by the
Company to a Participant setting forth the terms and provisions of such Award,
including any amendment or modification thereof.  The Committee may provide for
the use of electronic, Internet, or other non-paper Award Agreements, and the
use of electronic, Internet, or other non-paper means for the acceptance thereof
and actions thereunder by a Participant.

 
2.5  
“Beneficial Owner” or “Beneficial Ownership” shall have the meaning ascribed to
such terms in Rule 13d-3 of the General Rules and Regulations under the
Exchange Act.

 
2.6  
“Board” or “Board of Directors” means the Board of Directors of the Company.

 
2.7  
“Cash-Based Award” means an Award, settled in cash, granted under Article 11.

 
2.8  
“Cause” shall mean, unless otherwise specified in an applicable employment or
severance agreement, change in control severance agreement, change in control
severance plan or Award Agreement,  (i) the willful and continued failure by a
Participant to substantially perform the Participant’s duties with the Company
(other than any such failure resulting from the Participant’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 Participant and/or
(ii) the Participant’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 Section 2.8, no act, or failure to act, on the Participant’s
part shall be deemed “willful” unless done, or omitted to be done, by the
Participant not in good faith and without reasonable belief that the
Participant’s act, or failure to act, was in the best interests of the
Company.  Notwithstanding the foregoing, the Participant shall not be deemed
terminated for Cause pursuant to clause (i) of this Section 2.8 unless and until
the Participant shall have been provided with reasonable notice of and, if
possible, a reasonable opportunity to cure the facts and circumstances claimed
to provide a basis for termination of the Participant’s employment for Cause.

 
2.9  
 “Change in Control” shall mean a change in the ownership of the Company, a
change in the effective control of the Company, or a change in the ownership of
a substantial portion of assets of the Company (each, as defined in subsection
(a) below), except as otherwise provided in subsections (b), (c) and (d) below:

 
      
      (a)(i)
 
a “change in the ownership of the Company” occurs on the date that any one
person, or more than one person acting as a group, acquires ownership of stock
of the Company that, together with stock held by such person or group,
constitutes more than fifty percent (50%) of the total Fair Market Value or
total voting power of the stock of the Company,

 
 
(ii)
a “change in the effective control of the Company” occurs only on either of the
following dates:

 
 
(A)
the date any one person, or more than one person acting as a group, acquires (or
has acquired during the twelve (12) month period ending on the date of the most
recent acquisition by such person or persons) ownership of stock of the Company
possessing thirty percent (30%) or more of the total voting power of the stock
of the Company, or

 
 
(B)
the date a majority of the members of the Board is replaced during any twelve
(12) month period by directors whose appointment or election is not endorsed by
a majority of the members of the Board before the date of appointment or
election, and

 
 
(iii)
a “change in the ownership of a substantial portion of assets of the Company”
occurs on the date any one person, or more than one person acting as a group,
acquires (or has acquired during the twelve (12) month period ending on the date
of the most recent acquisition by such person or persons) assets from the
Company that have a total gross fair market value equal to or more than
eighty-five percent (85%) of the total gross fair market value of all of the
assets of the Company immediately before such acquisition or acquisitions.

 
 
(b)
A “change in the ownership of the Company” or “a change in the effective control
of the Company” shall not occur under clause (a)(i) or (a)(ii) by reason of any
of the following:

 
 
(i)
an acquisition of ownership of stock of the Company directly from the Company or
its Affiliates other than in connection with the acquisition by the Company or
its Affiliates of a business,

 
 
(ii)
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, 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

 
 
(iii)
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 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.

 
 
(c)
A “change in the ownership of a substantial portion of assets of the Company”
shall not occur under clause (a)(iii) by reason of a sale or disposition by the
Company of the assets of the Company 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.

 
 
(d)
This definition of “Change in Control” shall be limited to the definition of a
“change in control event” relating to the Company under Treasury Regulation
Section 1.409A-3(i)(5).  A “Change in Control” shall only occur if there is a
“change in control event” relating to the Company under Treasury Regulation
Section 1.409A-3(i)(5) with respect to the applicable Participant.

 
2.10  
 “Code” means the U.S. Internal Revenue Code of 1986, as amended from time to
time.  For purposes of this Plan, references to sections of the Code shall be
deemed to include references to any applicable regulations thereunder and any
successor or similar provision.

 
2.11  
“Committee” means the Compensation Committee of the Board or a subcommittee
thereof, or any other committee designated by the Board to administer this
Plan.  The members of the Committee shall be appointed from time to time by and
shall serve at the discretion of the Board.  The Committee shall consist solely
of two or more Directors, each of whom shall qualify as both an “outside
director” for purposes of Code Section 162(m) and a “non-employee director” as
defined in Rule 16b-3 promulgated under the Exchange Act.

 
2.12  
“Company” means Sempra Energy, a California corporation, and any successor
thereto as provided in Article 19 herein.

 
2.13  
“Covered Employee” means any Employee who is or may become a “covered employee,”
as defined in the regulations promulgated under Code Section 162(m).

 
2.14  
“Director” means any individual who is a member of the Board of Directors of the
Company.

 
2.15  
“Disability” has the meaning set forth in the long-term disability plan
maintained by the employer of the applicable Participant or a successor entity
to such employer.

 
2.16  
 “Dividend Equivalent” means a right to receive Shares, or cash, granted to a
Participant pursuant to Article 10.

 
2.17  
“Effective Date” has the meaning set forth in Section 1.1.

 
2.18  
“Eligible Individual” means any individual eligible to participate in this Plan,
as set forth in Article 5.

 
2.19  
“Employee” means any officer or other employee (as defined in accordance with
Code Section 3401(c)) of the Company or any Subsidiary.

 
2.20  
“Exchange Act” means the Securities Exchange Act of 1934, as amended from time
to time, or any successor act thereto.  For purposes of this Plan, references to
sections of the Exchange Act shall be deemed to include references to any
applicable regulations thereunder and any successor or similar provision.

 
2.21  
“Fair Market Value” or “FMV” means, as of any date, the value of a Share
determined as follows:

 
        (a)
if Shares are listed on any established stock exchange (such as the New York
Stock Exchange, the NASDAQ Global Market and the NASDAQ Global Select Market) or
any national market system, including without limitation any market system of
The NASDAQ Stock Market, LLC, the value of a Share shall be the closing sales
price for a Share as quoted on the principal exchange or system on which Shares
are listed for such date (or, if there is no closing sales price for a Share on
the date in question, the closing sales price for a Share on the next preceding
trading day for which such information exists), as reported in The Wall Street
Journal or such other source as the Board or the Committee deems reliable;

 
        (b)
if Shares are regularly quoted by a recognized securities dealer but closing
sales prices are not reported, the value of a Share shall be the mean of the
high bid and low asked prices for such date (or, if there are no high bid and
low asked prices for a Share on the date in question, the high bid and low asked
prices for a Share on the next preceding trading day for which such information
exists), as reported in The Wall Street Journal or such other source as the
Board or the Committee deems reliable; or

 
 
(c)
if Shares are neither listed on an established stock exchange or a national
market system nor regularly quoted by a recognized securities dealer, the value
of a Share for such date, as established by the Board or the Committee in good
faith.

 
 
(d)
For purposes of any Nonqualified Stock Option or SAR that is intended to be
exempt from Code Section 409A pursuant to Treasury Regulation Section
1.409A-1(b)(5), FMV shall be not less than the fair market value of a Share
determined in accordance with the requirements of Treasury Regulation Section
1.409A-1(b)(5)(iv).

 
2.22  
“Good Reason” shall mean, unless otherwise specified in an applicable employment
or severance agreement, change in control severance agreement, change in control
severance plan or Award Agreement, the occurrence of any of the following
without the prior written consent of the Participant, unless such act or failure
to act is corrected by the Company prior to the date of termination specified in
a Participant’s notice of termination (which notice of termination must be
provided to the Company within one hundred eighty (180) days of the act or
failure to act that the Participant alleges to constitute Good Reason and shall
identify a date of termination that in no event shall be less than fifteen (15)
days nor more than sixty (60) days after the date such notice of termination is
given):

 
         (a)
an adverse change in the Participant’s title, authority, duties,
responsibilities or reporting lines as in effect immediately prior to the Change
in Control;

 
         (b)
a reduction by the Company in the Participant’s aggregate annualized
compensation opportunities, except for across-the-board reductions in base
salaries, annual bonus opportunities or long-term incentive compensation
opportunities of less than ten percent (10%) similarly affecting all similarly
situated employees (both of the Company and of any Person then in control of the
Company) of comparable rank with the Participant; or the failure by the Company
to continue in effect any material benefit plan in which the Participant
participates immediately prior to the Change in Control, unless an equitable
arrangement (embodied in an ongoing substitute or alternative plan) has been
made with respect to such plan, or the failure by the Company to continue the
Participant’s participation therein (or in such substitute or alternative plan)
on a basis not materially less favorable, both in terms of the amount of
benefits provided and the level of the Participant’s participation relative to
other participants, as existed at the time of the Change in Control;

 
 
(c)
the relocation of the Participant’s principal place of employment immediately
prior to the consummation of the Change in Control (the “Principal Location”) to
a location which is both further away from the Participant’s residence and more
than thirty (30) miles from such Principal Location, or the Company’s requiring
the Participant to be based anywhere other than such Principal Location (or
permitted relocation thereof), or a substantial increase in the Participant’s
business travel obligations outside of the general area of the Principal
Location as of the date of consummation of a Change in Control, other than any
such increase that (A) arises in connection with extraordinary business
activities of the Company of limited duration and (B) is understood not to be
part of the Participant’s regular duties with the Company;

 
 
(d)
the failure by the Company to pay to the Participant any portion of the
Participant’s current compensation and benefits or 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, accounting for any
six-month delay in payment as required to comply with Section 409A of the Code;

 
 
(e)
any purported termination of the Participant’s employment that is not effected
pursuant to a notice of termination that sets forth in reasonable detail the
facts and circumstances for such termination;

 
 
(f)
the failure by the Company to provide any indemnification and/or D&O insurance
protection that it is required to be provided to the Participant under any
agreement between the Company and the Participant; or

 
 
(g)
the failure by the Company to comply with any material provision of any material
agreement between the Company and the Participant.

 
For purposes of this Section 2.22, a Participant’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 the finder of fact pursuant to the
dispute resolution procedure described in Section 16.4 hereof.  The
Participant’s right to terminate the Participant’s employment for Good Reason
shall not be affected by the Participant’s incapacity due to physical or mental
illness.  The Participant’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.
 
2.23  
 “Grant Date” means the date an Award is granted to a Participant pursuant to
the Plan.

 
2.24  
“Incentive Stock Option” or “ISO” means a stock option granted under Article 6
to an Employee that satisfies the requirements of Code Section 422, or any
successor provision, and that is designated as an “Incentive Stock Option.”

 
2.25  
“Nonemployee Director” means a Director who is not an Employee.

 
2.26  
“Nonemployee Director Award” means any NQSO, SAR, or other Award granted,
whether singly, in combination, or in tandem, to a Participant who is a
Nonemployee Director pursuant to such applicable terms, conditions, and
limitations as the Board may establish in accordance with this Plan.

 
2.27  
“Nonqualified Stock Option” or “NQSO” means a stock option that does not meet
the requirements of Code Section 422, or that is designated as a “Nonqualified
Stock Option.”  A stock option that is designated as a “Nonqualified Stock
Option” shall not be treated as an incentive stock option under Code Section
422.

 
2.28  
“Option” means an Incentive Stock Option or a Nonqualified Stock Option, as
described in Article 6.

 
2.29  
“Option Price” means the price at which a Share may be purchased by a
Participant pursuant to an Option.

 
2.30  
“Participant” means any Eligible Individual to whom an Award is granted.

 
2.31  
“Performance-Based Compensation” means compensation under an Award that is
intended to satisfy the requirements for qualified performance-based
compensation under Code Section 162(m) paid to Covered Employees.

 
2.32  
“Performance Measures” means measures as described in Article 11 on which the
performance goals are based and which are approved by the Company’s shareholders
pursuant to this Plan in order to qualify Awards as Performance-Based
Compensation.

 
2.33  
“Performance Period” means the period of time during which the performance goals
must be met in order to determine the degree of exercisability, vesting,
distribution or payment with respect to an Award.

 
2.34  
“Period of Restriction” means the period when Restricted Stock or Restricted
Stock Units are subject to a substantial risk of forfeiture (based on the
performance of services, the achievement of performance goals, or upon the
occurrence of other events as determined by the Committee, in its sole
discretion), as provided in Article 8.

 
2.35  
“Person” shall have the meaning ascribed to such term in Section 3(a)(9) of the
Exchange Act and used in Sections 13(d) and 14(d) thereof, including a “group”
as defined in Section 13(d) thereof.

 
2.36  
“Plan” means the Sempra Energy 2013 Long-Term Incentive Plan, as amended from
time to time.

 
2.37  
“Plan Year” means the calendar year.

 
2.38  
“Prior Plans” means, collectively, the Sempra Energy 2008 Long-Term Incentive
Plan, the 2008 Long-Term Incentive Plan for EnergySouth, Inc. Employees and
other Eligible Individuals, the Sempra Energy 1998 Long Term Incentive Plan, the
Sempra Energy 1998 Non-Employee Directors’ Stock Plan, and the Sempra Energy
Employee Stock Incentive Plan, in each case, as amended from time to time.

 
2.39  
“Restricted Stock” means Shares awarded to a Participant pursuant to Article 8
that are subject to restrictions and may be subject to forfeiture or repurchase.

 
2.40  
“Restricted Stock Unit” means a right to receive Shares, or cash, granted to a
Participant pursuant to Article 8.

 
2.41  
“Retirement” means a Participant’s termination of employment at age 55 or older
with five (5) years or more years of continuous service with the Company and its
Subsidiaries.

 
2.42  
“Rule 16b-3” means Rule 16b-3 of the General Rules and Regulations under the
Exchange Act, as such Rule may be amended from time to time.

 
2.43  
“SAR Grant Price” means the per Share price established for a SAR pursuant to
Article 7, used to determine whether there is any payment due upon exercise of
the SAR.

 
2.44  
“Share” means a share of common stock of the Company, no par value per share.

 
2.45  
“Stock Appreciation Right” or “SAR” means a stock appreciation right granted to
a Participant pursuant to Article 7.

 
2.46  
“Stock Payment Award” means a grant of Shares, or a right to receive Shares,
granted to a Participant pursuant to Article 9.

 
2.47  
“Subsidiary” means:  (a) any corporation or other entity (other than the
Company), whether domestic or foreign, in which the Company has or obtains,
directly or indirectly, a proprietary interest of more than fifty percent (50%)
by reason of stock ownership or otherwise, or (b) any corporation or other
entity (including, but not limited to, a partnership or a limited liability
company), that is affiliated with the Company through stock or equity ownership
or otherwise, and is designated as a Subsidiary for purposes of this Plan by the
Committee.

 
2.48  
“Subsidiary Corporation” shall mean any corporation in an unbroken chain of
corporations beginning with the Company if each of the corporations other than
the last corporation in the unbroken chain then owns stock possessing fifty
percent (50%) or more of the total combined voting power of all classes of stock
in one of the other corporations in such chain.

 
2.49  
“Ten Percent Shareholder” or “10% Shareholder” means the owner of stock (as
determined under Code Section 424(d)) possessing more than ten percent (10%) of
the total combined voting power of all classes of stock of the Company, or any
parent corporation (as defined in Code Section 424(e)) of the Company or any
Subsidiary Corporation.

 
Article 3.  Administration
 
3.1    General.  The Committee shall be responsible for administering this Plan,
subject to this Article 3 and the other provisions of this Plan.  The Committee
may employ attorneys, consultants, accountants, agents, and other individuals,
any of whom may be an Employee and the Committee, the Company, and its officers
and Directors shall be entitled to rely upon the advice, opinions, or valuations
of any such individuals.  No member of the Committee shall be liable for any
action or determination made in good faith with respect to the Plan or any grant
made hereunder.  Determinations by the Committee under this Plan need not be
uniform and may be made selectively among Participants.  All actions taken and
all interpretations and determinations made by the Committee shall be final,
conclusive and binding upon the Participants, the Company, and all other
interested parties. For the avoidance of doubt, a Participant’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 the finder of
fact pursuant to the dispute resolution procedure described in Section 16.4
hereof.
 
3.2          Authority of the Committee.  The Committee shall have full and
exclusive discretionary power to interpret the terms and the intent of this Plan
and any Award Agreement or other agreement or document ancillary to or in
connection with this Plan, to determine eligibility for Awards, and to adopt
such rules, regulations, forms, instruments, and guidelines for administering
this Plan as the Committee may deem necessary or proper.  Such authority shall
include, but not be limited to, selecting Award recipients, establishing all
Award terms and conditions, including the terms and conditions set forth in
Award Agreements, granting Awards in lieu of, or in satisfaction of,
compensation earned or to be paid under other compensation plans or agreements
of the Company or any Subsidiary, construing any provision of the Plan or any
Award Agreement, and, subject to Article 16, adopting modifications and
amendments to this Plan or any Award Agreement, including without limitation,
any that are necessary to comply with the laws of the countries and other
jurisdictions in which the Company and/or its Subsidiaries operate.
 
3.3          Delegation.  This Committee may delegate to one or more of its
members or to one or more officers of the Company and/or its Subsidiaries, or to
one or more agents or advisors such administrative duties or powers as it may
deem advisable, and the Committee or any individuals to whom it has delegated
duties or powers as aforesaid may employ one or more individuals to render
advice with respect to any responsibility the Committee or such individuals may
have under this Plan.  The Committee may authorize one or more officers of the
Company to do one or both of the following on the same basis as can the
Committee, to the extent permitted by applicable law:  (a) designate Employees
to be recipients of Awards, and (b) determine the size of any such Awards;
provided, however, that:  (i) the Committee shall not delegate such
responsibilities to any such officer for Awards granted to an Employee who is
subject to the reporting rules as promulgated in accordance with Section 16 of
the Exchange Act; and (ii) the officer(s) shall report periodically to the
Committee regarding the nature and scope of the Awards granted pursuant to the
authority delegated.
 
3.4    Nonemployee Director Awards.  The Board shall be responsible for
administering this Plan with respect to Awards to Nonemployee Directors, subject
to the provisions of this Plan.  With respect to the administration of the Plan
as it relates to Awards granted to Nonemployee Directors, references in this
Plan to the “Committee” shall refer to the Board.
 
Article 4.  Shares Subject to This Plan and Maximum Awards
 
4.1          Number of Shares Available for Awards.  Subject to adjustment as
provided in Section 4.4 herein:
 
 
(a)
The maximum number of Shares available for issuance to Participants under this
Plan (the “Share Authorization”) shall be the sum of:

 
 
(i)
 
Five Million Nine Hundred Thousand (5,900,000) Shares (the “Initial Authorized
Shares”), plus

 
 
(ii)
 
the number of Shares not issued or subject to outstanding awards under (a) the
Sempra Energy 2008 Long-Term Incentive Plan and (b) the 2008 Long-Term Incentive
Plan for EnergySouth, Inc. Employees and other Eligible Individuals, in each
case as of the Effective Date, plus

 
 
(iii)
the number of Shares subject to outstanding awards as of the Effective Date
under the Prior Plans that on or after the Effective Date cease for any reason
to be subject to such awards (other than the vested and nonforfeitable Shares
that are issued pursuant to such awards and are not withheld or surrendered in
satisfaction of the exercise price or taxes relating to such awards) (the
“Cancelled Prior Award Shares”).

 
         (b)   
The maximum number of Shares of the Share Authorization that may be issued
pursuant to ISOs under this Plan shall be Five Million Nine Hundred Thousand
(5,900,000) Shares.

 
4.2          Share Usage.  Any Shares related to Awards under this Plan which
terminate by expiration, forfeiture, cancellation, or otherwise, without the
issuance of such Shares, shall be available again for grant under this Plan.
Shares withheld or surrendered in satisfaction of the exercise price or taxes
relating to an award under this Plan shall not constitute shares issued to
Participants and shall be available for grant under this Plan; provided that in
no event for Option and SAR grants made on or after the Approval Date shall
shares withheld or surrendered in payment of the exercise price of an option or
SAR or to satisfy tax withholding liabilities arising from the exercise or
settlement of an option or SAR be available again for grant under this
Plan.    Furthermore, if a SAR is exercised and settled in Shares under this
Plan, the difference between the total Shares exercised and the net Shares
delivered shall be available again for grant under this Plan, with the result
being that only the number of Shares issued upon exercise of a SAR will be
counted against the Shares available; provided, however, that  for SAR grants
made on or after the Approval Date, upon stock settlement of SARs, the gross
number of SARs originally granted shall be counted as issued for purposes of
determining whether the shares authorization has been reached, regardless of the
number of SARs actually issued upon such stock settlement. Notwithstanding
anything to the contrary in this Section 4.2, the full number of Shares subject
to an Option, SAR or other Award shall be counted for purposes of determining
compliance with the Annual Award Limits set forth in Section 4.3.  The payment
of dividend equivalents in cash in conjunction with any outstanding Award shall
not be counted against the Shares available for issuance under the
Plan.  Notwithstanding the provisions of this Section 4.2, no Shares may again
be optioned, granted or awarded if such action would cause an Incentive Stock
Option to fail to qualify as an incentive stock option under Code Section 422.
 
4.3          Annual Award Limits.  The following limits (each an “Annual Award
Limit,” and collectively, “Annual Award Limits”), as adjusted pursuant to
Section 4.4, shall apply to grants of Awards under this Plan:
 
 
(a)
Awards (other than Option, SAR and Cash-Based Awards).  The maximum aggregate
number of Shares subject to Restricted Stock, Restricted Stock Units, Stock
Payment Awards and Dividend Equivalent Awards granted in any Plan Year to any
Participant other than a Nonemployee Director shall be Five Hundred Thousand
(500,000).

 
 
(b)
Option and SAR Awards.  The maximum aggregate number of Shares subject to Option
and SAR Awards granted in any Plan Year to any Participant other than a
Nonemployee Director shall be Five Hundred Thousand (500,000).

 
 
(c)
Cash-Based Awards: The maximum aggregate amount awarded with respect to
Cash-Based Awards to any Participant other than a Nonemployee Director in any
Plan Year shall be Ten Million dollars ($10,000,000).

 
 
(d)
Nonemployee Director Awards.  The maximum number of Shares subject to Options,
SAR Awards, Restricted Stock, Restricted Stock Units, Stock Payment Awards and
Dividend Equivalent Awards granted in any Plan Year to any Participant who is a
Nonemployee Director shall be Fifteen Thousand (15,000).  The maximum aggregate
amount awarded with respect to Cash-Based Awards to any Participant who is a
Nonemployee Director in any Plan Year shall be Five Hundred Thousand dollars
($500,000).

 
4.4          Adjustments in Authorized Shares.  In the event of any corporate
event or transaction (including, but not limited to, a change in the Shares or
the capitalization of the Company) such as a merger, consolidation,
reorganization, recapitalization, separation, partial or complete liquidation,
stock dividend, special cash dividend, stock split, reverse stock split, split
up, spin-off, or other distribution of stock or property of the Company,
combination of Shares, exchange of Shares, dividend in-kind, or other like
change in capital structure, number of outstanding Shares or distribution (other
than normal cash dividends) to shareholders of the Company, or any similar
corporate event or transaction, the Committee shall, in order to prevent
dilution or enlargement of Participants’ rights under this Plan and outstanding
awards, substitute or adjust, as applicable, the number and kind of Shares (or
other securities) that may be issued under this Plan or under particular forms
of Awards, the number and kind of Shares (or other securities) subject to
outstanding Awards, the Option Price or SAR Grant Price applicable to
outstanding Awards, the Annual Award Limits and the terms and conditions of
outstanding Awards.  Notwithstanding anything herein to the contrary, the
Committee may not take any such action as described in this Section 4.4 that
would cause an Award that is otherwise exempt from Code Section 409A to become
subject to Code Section 409A, or cause an Award that is subject to the
requirements of Code Section 409A to fail to comply with such requirements, or
cause an Award that is Performance-Based Compensation to fail to satisfy the
requirements for qualified performance-based compensation under Code Section
162(m).  The determination of the Committee as to the foregoing adjustments, if
any, shall be final, conclusive and binding on the Company and all Participants
and other parties having any interest in an Award under this Plan.
 
Subject to the provisions of Article 17 and notwithstanding anything else herein
to the contrary, without affecting the number of Shares reserved or available
hereunder, the Committee may authorize the grant of substitute Awards under this
Plan in connection with any merger, consolidation, acquisition of property or
stock, or reorganization upon such terms and conditions as it may deem
appropriate, subject to compliance with the rules under Code Sections 162(m),
409A, 422, and 424, as and where applicable.
 
Article 5.  Eligibility and Participation
 
5.1          Eligibility.  Individuals eligible to participate in this Plan
include all Employees and Directors.
 
5.2          Actual Participation.  Subject to the provisions of this Plan, the
Committee may, from time to time, select from all Eligible Individuals, those to
whom Awards shall be granted and shall determine, in its sole discretion, the
nature of, any and all terms permissible by law, and the amount of each Award.
 
Article 6.  Stock Options
 
6.1          Grant of Options.  Subject to the terms and conditions of this
Plan, Options may be granted to any Eligible Individual in such number, and upon
such terms, and at any time and from time to time as shall be determined by the
Committee, in its sole discretion; provided that ISOs may be granted only to
Employees of the Company or any Subsidiary Corporation.
 
6.2          Stock Option Agreement.  Each Option grant shall be evidenced by an
Award Agreement that shall specify the Option Price, the maximum duration of the
Option, the number of Shares to which the Option pertains, the conditions upon
which an Option shall become vested and exercisable, the extent to which the
Participant shall have the right to exercise the Option following termination of
the Participant’s employment with or provision of services to the Company and/or
its Subsidiaries, and such other provisions as the Committee shall determine
which are not inconsistent with the terms of this Plan.  The Award Agreement
also shall specify whether the Option is intended to be an ISO or a NQSO.
 
6.3          Option Price.  The Option Price for each grant of an Option under
this Plan shall be determined by the Committee in its sole discretion and shall
be specified in the Award Agreement; provided, however, the Option Price must be
at least equal to one hundred percent (100%) of the FMV of the Shares as
determined on the Grant Date.
 
6.4          Term of Options.  Each Option granted to a Participant shall expire
at such time as the Committee shall determine at the time of grant; provided,
however, no Option shall be exercisable on or after the tenth (10th) anniversary
date of its grant.
 
6.5          Exercise of Options.  Options granted under this Article 6 shall be
exercisable at such times and be subject to such restric­tions and conditions as
the Committee shall in each instance approve, which terms and restrictions need
not be the same for each grant or for each Participant.  On the expiration date
of any outstanding, vested Option, if the aggregate Fair Market Value of the
Shares subject to the unexercised Option exceeds the aggregate exercise price of
the unexercised Option by at least $50.00, such Option shall automatically be
exercised at the Fair Market Value of a Share on such day, with the number of
Shares, less the number of Shares withheld to pay the exercise price and taxes,
delivered to the Participant, provided that such Option shall not be so
exercised if the Option Price equals or exceeds the Fair Market Value of a Share
on such day.
 
6.6          Payment.  Options granted under this Article 6 shall be exercised
by the delivery of a notice of exercise to the Company or an agent designated by
the Company in a form specified or accepted by the Committee, or by complying
with any alternative procedures which may be authorized by the Committee,
setting forth the number of Shares with respect to which the Option is to be
exercised, accompanied by full payment for the Shares.
 
A condition of the issuance of the Shares as to which an Option shall be
exercised shall be the payment of the Option Price.  The Option Price of any
Option shall be payable to the Company in full, in cash or its equivalent or by
a cashless (broker-assisted) exercise (with such cashless exercise to be subject
to any terms and conditions as the Committee may impose, in its sole direction),
or under such other methods as are authorized by the Committee, in its sole
discretion, including, without limitation: (a) by tendering (either by actual
delivery or attestation) previously acquired Shares having an aggregate Fair
Market Value at the time of exercise equal to the Option Price; (b) by
surrendering Shares then issuable upon exercise of the Option having an
aggregate Fair Market Value at the time of exercise equal to the Option Price;
or (c) by a combination of the foregoing, subject to such terms and conditions
as the Committee, in its sole discretion, may impose; provided, however, that in
the case of an ISO, the payment methods shall be set forth in the Award
Agreement.
 
Subject to any governing rules or regulations, as soon as practicable after
receipt of written notification of exercise and full payment (including
satisfaction of any applicable tax withholding), the Company shall deliver to
the Participant evidence of book entry Shares, or upon the Participant’s
request, Share certificates in an appropriate amount based upon the number of
Shares purchased under the Option.
 
Unless otherwise determined by the Committee, all payments under all of the
methods indicated above shall be paid in United States dollars.
 
6.7          Restrictions.  The Committee may impose such restrictions on any
Shares acquired pursuant to the exercise of an Option granted under this Article
6 as it may deem advisable, including, without limitation, minimum holding
period requirements, restrictions under the policies of the Company or any
Subsidiary, restrictions under applicable federal, state and foreign laws or
under the requirements of any stock exchange or market upon which such Shares
are then listed and/or traded.
 
6.8          Termination of Employment. Each Participant’s Award Agreement shall
set forth the extent to which the Participant shall have the right to exercise
the Option following termination of the Participant’s employment with or
provision of services to the Company and/or its Subsidiaries, as the case may
be.  Such provisions shall be determined in the sole discretion of the
Committee, shall be included in the Award Agreement entered into with each
Participant, need not be uniform among all Options issued pursuant to this Plan,
and may reflect distinctions based on the reasons for termination.
 
6.9          Notification of Disqualifying Disposition.  If any Participant
shall make any disposition of Shares issued pursuant to the exercise of an ISO
under the circumstances described in Code Section 421(b) (relating to certain
disqualifying dispositions), such Participant shall notify the Company of such
disposition within ten (10) days thereof.
 
6.10       10% Shareholder.  If any Employee to whom an Incentive Stock Option
is granted is a 10% Shareholder, then the Option Price shall be at least equal
to one hundred ten percent (110%) of the FMV of the Shares as determined on the
Grant Date and the term of the Option shall not exceed five (5) years measured
from the Grant Date.
 
6.11      $100,000 Limitation.  To the extent that the aggregate fair market
value of Shares and other stock with respect to which Incentive Stock Options or
other “incentive stock options” (within the meaning of Code Section 422, but
without regard to Code Section 422(d)) granted under the Plan and all other
plans of the Company and any Subsidiary Corporation or any parent corporation
thereof (as defined in code Section 424(e)) are exercisable for the first time
by a Participant during any calendar year exceeds $100,000, the Incentive Stock
Options or other “incentive stock options” shall be treated as Nonqualified
Stock Options to the extent required by Code Section 422.  The rule set forth in
the preceding sentence shall be applied by taking Incentive Stock Options and
other “incentive stock options” into account in the order in which they were
granted.  For purposes of this Section 6.11, the fair market value of shares or
other stock shall be determined as of the time the Incentive Stock Option or
other “incentive stock options” with respect to such shares or other stock is
granted.
 
Article 7.  Stock Appreciation Rights
 
7.1          Grant of SARs.  Subject to the terms and conditions of this Plan,
SARs may be granted to Eligible Individuals at any time and from time to time as
shall be determined by the Committee.
 
Subject to the terms and conditions of this Plan, the Committee shall have
complete discretion in determining the number of SARs granted to each
Participant and in determining the terms and conditions pertaining to such SARs
which are not inconsistent with the terms of this Plan.
 
The SAR Grant Price for each grant of a SAR shall be determined by the Committee
and shall be specified in the Award Agreement; provided, however, the SAR Grant
Price must be at least equal to one hundred percent (100%) of the FMV of the
Shares as determined on the Grant Date.
 
7.2          SAR Agreement.  Each SAR Award shall be evidenced by an Award
Agreement that shall specify the SAR Grant Price, the term of the SAR, the
number of Shares to which the SAR pertains, the form of the SAR payout, the
conditions upon which any SAR shall become vested and exercisable, the extent to
which the Participant shall have the right to exercise the SAR following
termination of the Participant’s employment with or provision of services to the
Company and/or its Subsidiaries and such other provisions as the Committee shall
determine which are not inconsistent with the terms of this Plan.
 
7.3          Term of SAR.  Each SAR granted to a Participant shall expire at
such time as the Committee shall determine at the time of grant; provided,
however, no SAR shall be exercisable on or after the tenth (10th) anniversary
date of its grant.
 
7.4          Exercise of SARs.  SARs granted under this Article 7 shall be
exercised at such times and be subject to such restrictions and conditions as
the Committee shall in each instance approve, which terms and restrictions need
not be the same for each grant or for each Participant.
 
7.5          Settlement of SARs.  Upon the exercise of a SAR, a Participant
shall be entitled to receive payment from the Company in an amount determined by
multiplying:
 
 
(a)
The excess of the Fair Market Value of a Share on the date of exercise over the
SAR Grant Price; by

 
 
(b)
The number of Shares with respect to which the SAR is exercised.

 
At the discretion of the Committee, the payment upon SAR exercise may be in
cash, Shares, or any combination thereof.  The Committee’s determination
regarding the form of SAR payout shall be set forth in the Award Agreement
pertaining to the grant of the SAR.
 
7.6          Termination of Employment.  Each Participant’s Award Agreement
shall set forth the extent to which the Participant shall have the right to
exercise the SAR following termination of the Participant’s employment with or
provision of services to the Company and/or its Subsidiaries, as the case may
be.  Such provisions shall be determined in the sole discretion of the
Committee, shall be included in the Award Agreement entered into with each
Participant, need not be uniform among all SARs issued pursuant to this Plan,
and may reflect distinctions based on the reasons for termination.
 
7.7          Restrictions.  The Committee may impose such restrictions on any
Shares acquired pursuant to the exercise of a SAR granted under this Article 7
as it may deem advisable, including, without limitation, minimum holding period
requirements, restrictions under applicable federal, state and foreign
securities laws or under the requirements of any stock exchange or market upon
which such Shares are then listed and/or traded.
 
Article 8.  Restricted Stock and Restricted Stock Units
 
8.1          Grant of Restricted Stock or Restricted Stock Units.  Subject to
the terms and conditions of this Plan, the Committee, at any time and from time
to time, may grant Shares of Restricted Stock and/or Restricted Stock Units to
Participants in such number of Shares as the Committee shall
determine.  Restricted Stock Units shall be similar to Restricted Stock except
that no Shares are issued to the Participant on the Grant Date and any Shares
that are to be issued shall be issued to the Participant after the Grant Date,
subject to the terms and conditions of the Award.
 
8.2          Restricted Stock or Restricted Stock Unit Agreement.  Each
Restricted Stock or Restricted Stock Unit grant shall be evidenced by an Award
Agreement that shall specify the Period(s) of Restriction, the number of Shares
of Restricted Stock or the number of Restricted Stock Units granted, the extent
to which the Participant shall have the right to retain Restricted Stock and/or
Restricted Stock Units following termination of the Participant’s employment
with or provision of services to the Company and/or its Subsidiaries, and such
other provisions as the Committee shall determine which are not inconsistent
with the terms of this Plan.
 
8.3          Restrictions.  The Committee shall impose such other conditions
and/or restrictions on any Shares of Restricted Stock or Restricted Stock Units
granted pursuant to this Plan as it may deem advisable including, without
limitation, a requirement that Participants pay a stipulated purchase price for
each Share of Restricted Stock or each Restricted Stock Unit, restrictions based
upon the achievement of specific performance goals, service-based restrictions
on vesting following the attainment of the performance goals, service-based
restrictions, and/or restrictions under applicable laws or under the
requirements of any stock exchange or market upon which such Shares are listed
or traded, or holding requirements or sale restrictions placed on the Shares by
the Company upon vesting of such Restricted Stock or Restricted Stock Units.
 
To the extent deemed appropriate by the Committee, the Company may retain the
certificates representing Shares of Restricted Stock in the Company’s possession
until such time as all conditions and/or restrictions applicable to such Shares
have been satisfied or lapse.
 
Except as otherwise provided in this Article 8, Shares of Restricted Stock
subject to each Restricted Stock Award shall become freely transferable by the
Participant after all conditions and restrictions applicable to such Shares have
been satisfied or lapse (including satisfaction of any applicable tax
withholding obligations), and Restricted Stock Units shall be paid in cash,
Shares, or a combination of cash and Shares as the Committee, in its sole
discretion, shall determine.
 
8.4          Certificate Legend.  In addition to any legends placed on
certificates pursuant to Section 8.3, each certificate representing Shares of
Restricted Stock granted pursuant to this Plan may bear a legend such as the
following or as otherwise determined by the Committee in its sole discretion:
 
THE SHARES OF STOCK REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO CERTAIN
RESTRICTIONS UPON TRANSFER AND FORFEITURE OR REPURCHASE PROVISIONS SET FORTH IN
THE SEMPRA ENERGY 2013 LONG-TERM INCENTIVE PLAN, AND IN THE ASSOCIATED AWARD
AGREEMENT BETWEEN THE HOLDER OF THE SHARES AND SEMPRA ENERGY, A COPY OF EACH OF
WHICH IS ON FILE AT THE PRINCIPAL OFFICE OF SEMPRA ENERGY.
 
8.5          Voting Rights.  Unless otherwise determined by the Committee in its
sole discretion, during the Period of Restriction, Participants holding Shares
of Restricted Stock granted hereunder shall be granted the right to exercise
full voting rights with respect to those Shares.  A Participant shall have no
voting rights with respect to any Restricted Stock Units granted hereunder.
 
8.6          Dividends and Other Distributions.  Unless otherwise determined by
the Committee in its sole discretion, during the Period of Restriction,
Participants holding Shares of Restricted Stock granted hereunder shall be
credited with dividends paid with respect to the underlying Shares while they
are so held in a manner determined by the Committee, in its sole
discretion.  The Committee may apply any restrictions to the dividends that the
Committee deems appropriate.  The Committee, in its sole discretion, may
determine the form of payment of dividends, including cash, Shares, or
Restricted Stock.  Notwithstanding anything to the contrary in this Section 8.6,
any dividends that become payable with respect to Shares of Restricted Stock
that remain subject to performance vesting conditions shall be subject to the
same performance vesting conditions as apply to the underlying Shares of
Restricted Stock.
 
8.7          Termination of Employment.  Each Award Agreement shall set forth
the extent to which the Participant shall have the right to retain Restricted
Stock and/or Restricted Stock Units following termination of the Participant’s
employment with or provision of services to the Company and/or its Subsidiaries,
as the case may be.  Such provisions shall be determined in the sole discretion
of the Committee, shall be included in the Award Agreement entered into with
each Participant, need not be uniform among all Shares of Restricted Stock or
Restricted Stock Units issued pursuant to this Plan, and may reflect
distinctions based on the reasons for termination.
 
8.8          Section 83(b) Election.  The Committee may provide in an Award
Agreement that the Award of Restricted Stock is conditioned upon the Participant
making or refraining from making an election with respect to the Award under
Code Section 83(b).  If a Participant makes an election pursuant to Code Section
83(b) concerning a Restricted Stock Award, the Participant shall be required to
file promptly a copy of such election with the Company.
 
Article 9.  Stock Payment Awards
 
9.1          Grant of Stock Payment Awards.  Subject to the terms and provisions
of this Plan, the Committee, at any time and from time to time, may grant Stock
Payment Awards to Participants in such number of Shares as the Committee shall
determine.  A Stock Payment Award shall provide for:  (a) the distribution of
Shares to the Participant on the Grant Date; or (b) the distribution of Shares,
or the payment of cash, after the Grant Date, in each case, subject to the terms
and conditions of such Award.  A Stock Payment Award that provides for a
deferred distribution of Shares shall specify the dates or events upon which the
Shares shall be distributed and such other terms and conditions as the Committee
determines.
 
9.2          Stock Payment Award Agreement.  Each Stock Payment Award shall be
evidenced by an Award Agreement that shall specify the number of Shares granted,
the extent to which the Participant shall have the right to retain the Stock
Payment Award evidenced thereby following termination of the Participant’s
employment with or provision of services to the Company and/or its Subsidiaries,
and such other provisions as the Committee shall determine which are not
inconsistent with the terms of this Plan.
 
9.3          Form and Timing of Distribution or Payment of Stock Payment
Awards.  Distribution of the Shares pursuant to Stock Payment Awards shall be as
determined by the Committee and as evidenced in the Award Agreement.  Subject
to the terms of this Plan, (a) a Stock Payment Award distributed on the Grant
Date shall be distributed in the form of Shares, and (b) in the case of a Stock
Payment Award that is distributed or paid after the Grant Date, the Committee,
in its sole discretion, may distribute or pay such Stock Payment Award in the
form of cash or in Shares (or in a combination thereof); provided that any cash
paid in lieu of Shares in settlement of any such Stock Payment Award (or portion
thereof) shall be equal to the Fair Market Value of such Shares, as determined
as of the date of payment.  Any Shares issued pursuant to Stock Payment Awards
may be granted subject to any restrictions deemed appropriate by the Committee.
 
9.4          Termination of Employment.  Each Award Agreement shall set forth
the extent to which the Participant shall have the right to retain the Stock
Payment Award evidenced thereby following termination of the Participant’s
employment with or provision of services to the Company and/or its Subsidiaries,
as the case may be.  Such provisions shall be determined in the sole discretion
of the Committee, shall be included in the Award Agreement entered into with
each Participant, need not be uniform among all Stock Payment Awards issued
pursuant to this Plan, and may reflect distinctions based on the reasons for
termination.
 
9.5          Voting Rights.  A Participant shall have no voting rights with
respect to a Stock Payment Award granted hereunder until the Shares subject to
the Award have been distributed to the Participant.
 
Article 10.  Dividend Equivalent Awards
 
10.1          Grant of Dividend Equivalent Awards.  Subject to the terms and
provisions of this Plan, the Committee, at any time and from time to time, may
grant Dividend Equivalent Awards to Participants with respect to:  (a) the
Shares subject to another Award, or (b) such number of Shares as the Committee
shall specify.  A Dividend Equivalent Award shall represent the right to receive
Shares, or cash, determined based on the dividends that a Participant would have
received, had the Participant held the number of Shares subject to such other
Award, or the number of Shares specified by the Committee, for all or any
portion of the period from the Grant Date of the Dividend Equivalent Award to
the date of the exercise, vesting, distribution or expiration of such other
Award, as determined by the Committee, or the date specified under the Dividend
Equivalent Award, and, to the extent such Divided Equivalents are not
distributed or paid currently, assuming that the dividends were reinvested in
Shares (and any dividends on such Shares were reinvested in Shares) during such
period.  The dividends shall be deemed reinvested in Shares in the manner
specified under the terms of the Award.
 
10.2          Dividend Equivalent Award Agreement.  Each Dividend Equivalent
Award shall be evidenced by an Award Agreement that shall designate the other
Award to which such Dividend Equivalent Award relates, or shall specify the
number of Shares with respect to which dividends shall be determined, the form
of payout with respect to the Dividend Equivalent Award, the extent to which the
Participant shall have the right to retain the Dividend Equivalent Award
evidenced thereby following termination of the Participant’s employment with or
provision of services to the Company and/or its Subsidiaries, and such other
provisions as the Committee shall determine which are not inconsistent with the
terms of this Plan.
 
10.3          Form and Timing of Distribution or Payment of Dividend Equivalent
Awards.  Distribution or payment of the Shares, or payment of the cash value of
the Shares, earned pursuant to Dividend Equivalent Awards shall be as determined
by the Committee and as evidenced in the Award Agreement.  Subject to the terms
of this Plan, the Committee, in its sole discretion, may determine whether the
Dividend Equivalents under an Award shall be distributed or paid as dividends or
Shares are paid, or distributed or paid on a deferred basis.  Subject
to the terms of this Plan, the Committee, in its sole discretion, may distribute
or pay any earned portion of a Dividend Equivalent Award in the form of cash or
in Shares (or in a combination thereof); provided that any cash paid in lieu of
Shares in settlement of any Dividend Equivalent Award (or portion thereof) shall
be equal to the Fair Market Value of such Shares, determined as of the date of
payment.  Any Shares issued pursuant to Dividend Equivalent Awards may be
granted subject to any restrictions deemed appropriate by the Committee.  The
determination of the Committee with respect to the form of payout of such Awards
shall be set forth in the Award Agreement pertaining to the grant of the
Award. Notwithstanding anything to the contrary in this Section 10.3, any
Dividend Equivalent Awards that are made with respect to an outstanding Award
that is subject to performance vesting conditions shall vest and become payable
subject to the performance vesting conditions as apply to the underlying Award.
 
10.4          Termination of Employment.  Each Award Agreement shall set forth
the extent to which the Participant shall have the right to retain the Dividend
Equivalent Award evidenced thereby following termination of the Participant’s
employment with or provision of services to the Company and/or its Subsidiaries,
as the case may be.  Such provisions shall be determined in the sole discretion
of the Committee, shall be included in the Award Agreement entered into with
each Participant, need not be uniform among all Dividend Equivalent Awards
issued pursuant to this Plan, and may reflect distinctions based on the reasons
for termination.
 
Article 11.  Cash-Based Awards
 
11.1          Grant of Cash-Based Awards.  Subject to the terms and provisions
of the Plan, the Committee, at any time and from time to time, may grant
Cash-Based Awards to Participants in such dollar amounts as the Committee may
determine.
 
11.2          Cash-Based Award Agreement.  Each Cash-Based Award shall be
evidenced by an Award Agreement that shall specify the payment amount or
amounts, the performance goals, the Performance Period, the time and form of
payment,  the extent to which the Participant shall have the right to receive
payment under any Cash-Based Award following termination of the Participant’s
employment with or provision of services to the Company and/or its Subsidiaries,
and such other provisions as the Committee shall determine which are not
inconsistent with the terms of this Plan.
 
11.3          Value of Cash-Based Awards.  Each Cash-Based Award shall specify a
payment amount or amounts as determined by the Committee.  The Committee may
establish performance goals in its sole discretion.  If the Committee exercises
its discretion to establish performance goals, the value of Cash-Based Awards
that will be paid out to the Participant will depend on the extent to which the
performance goals are met.
 
11.4          Payment of Cash-Based Awards.  Payment, if any, with respect to a
Cash-Based Award shall be made in accordance with the terms of the Award, in
cash.
 
11.5          Termination of Employment.  The Committee shall determine the
extent to which the Participant shall have the right to receive payment under
any Cash-Based Award following termination of the Participant’s employment with
or provision of services to the Company and/or its Subsidiaries, as the case may
be.  Such provisions shall be determined in the sole discretion of the
Committee, shall be included in the Award Agreement entered into with each
Participant, need not be uniform among all Awards of Cash-Based Awards issued
pursuant to the Plan, and may reflect distinctions based on the reasons for
termination.
 
Article 12.  Transferability of Awards
 
12.1          Transferability of Incentive Stock Options.  No ISO (or Award that
results in a deferral of compensation as defined in Code Section 409A) granted
under this Plan may be sold, transferred, pledged, assigned, or otherwise
alienated or hypothecated, other than by will or by the laws of descent and
distribution.  Further, all ISOs granted to a Participant shall be exercisable
during his or her lifetime only by such Participant.
 
12.2        All Other Awards.  Except as otherwise provided in a Participant’s
Award Agreement or otherwise determined at any time by the Committee, no Award
granted under this Plan may be sold, transferred, pledged, assigned, or
otherwise alienated or hypothecated, other than by will or by the laws of
descent and distribution; provided that the Board or Committee may permit
further transferability, on a general or a specific basis, and may impose
conditions and limitations on any permitted transferability, but in no event may
an Award be transferred for value (as defined in the General Instructions to
Form S-8 registration statement under the Securities Act of 1933, as amended
from time to time).  Further, except as otherwise provided in a Participant’s
Award Agreement or otherwise determined at any time by the Committee, or unless
the Board or Committee decides to permit further transferability, all Awards
(other than ISOs) granted to a Participant under this Plan shall be exercisable
during his or her lifetime only by such Participant.  With respect to those
Awards (other than ISOs), if any, that are permitted to be transferred to
another individual, references in this Plan to exercise or payment related to
such Awards by or to the Participant shall be deemed to include, as determined
by the Committee, the Participant’s permitted transferee.
 
Article 13.  Performance Measures
 
13.1          Performance Measures. The performance goals upon which the
exercisability, vesting, distribution or payment of an Award to a Covered
Employee that is intended to qualify as Performance-Based Compensation shall be
limited to one or more of the following Performance Measures:
 
 
(a)
Net revenue;

 
(b)
Net earnings (before or after taxes);

 
(c)
Operating earnings or income;

 
(d)
Absolute and/or relative return on assets, capital, invested capital, equity,
sales, or revenue;

 
(e)
Earnings per share;

 
(f)
Cash flow (including, but not limited to, operating cash flow, free cash flow,
cash flow return on equity, and cash flow return on investment);

 
(g)
Net operating profits;

 
(h)
Earnings before or after any one or more of taxes, interest, depreciation, and
amortization;

 
(i)
Earnings growth;

 
(j)
Gross, operating, or net margins;

 
(k)
Revenue growth;

 
(l)
Book value per share;

 
(m)
Stock price or shareholder return;

 
(n)
Economic value added;

 
(o)
Customer satisfaction;

 
(p)
Market share;

 
(q)
Working capital;

 
(r)
Productivity ratios;

 
(s)
Operating goals (including, but not limited to, safety, reliability, maintenance
expenses, capital expenses, customer satisfaction, operating efficiency, and
employee satisfaction); and

 
(t)
Performance relative to one or more peer companies or one or more operating
units, divisions, acquired businesses, minority investments, partnerships or
joint ventures thereof.

Any Performance Measure may be used to measure the performance of the Company
and/or any Subsidiary, as a whole or any business unit of the Company and/or any
Subsidiary, or any combination thereof, as the Committee may deem appropriate,
or any of the above Performance Measures as compared to the performance of a
group of comparable companies, or published or special index that the Committee,
in its sole discretion, deems appropriate, or the Company may select the
Performance Measures in subsection (m) above as compared to various stock market
indices.  The Committee also has the authority to provide for accelerated
vesting of any Award based on the achievement of performance goals pursuant to
the Performance Measures specified in this Article 13.
 
13.2          Performance Goals.  The Committee shall, within the time
prescribed by Code Section 162(m), designate the performance goal or goals with
respect to any Award that is intended to qualify as Performance-Based
Compensation.  Each such performance goal shall define the objectively
determinable manner of calculating the extent to which the performance goals for
a Performance Period have been achieved.  The Committee may provide in any Award
that any performance goal may include or exclude objectively determinable
adjustments, including for any one or more of the following events that occur
during a Performance Period: (a) asset write-downs; (b) litigation or claim
judgments or settlements; (c) the effect of changes in tax laws, accounting
principles, or other laws or provisions affecting reported results; (d) any
reorganization and restructuring programs; (e) extraordinary nonrecurring items
as described in Financial Accounting Standards Board, Accounting Standards
Codification Subtopic 225-20-45; (f) acquisitions or divestitures; and (g)
foreign exchange gains and losses.  To the extent such adjustments apply to the
performance goals of Awards to Covered Employees, they shall be prescribed in a
form and at a time that meets the requirements of Code Section 162(m) for
deductibility.
 
13.3          Adjustment of Performance-Based Compensation.  Awards that are
intended to qualify as Performance-Based Compensation may not be adjusted
upward.  The Committee may retain the discretion to adjust such Awards downward,
either on a formula or discretionary basis or any combination, as the Committee
determines.
 
13.4          Committee Discretion.  In the event that the Committee determines
that it is advisable to grant Awards that shall not qualify as Performance-Based
Compensation, the Committee may make such grants without satisfying the
requirements of Code Section 162(m) and base vesting on Performance Measures
other than those set forth in Section 13.1.
 
Article 14.  Beneficiary Designation
 
Each Participant under this Plan may, from time to time, name any beneficiary or
beneficiaries (who may be named contingently or successively) to whom any
benefit under this Plan is to be paid in case of his death before he receives
any or all of such benefit.  Each such designation shall revoke all prior
designations by the same Participant, shall be in a form prescribed by the
Committee, and will be effective only when filed by the Participant in writing
with the Company during the Participant’s lifetime.  In the absence of any such
beneficiary designation, benefits remaining unpaid or rights remaining
unexercised at the Participant’s death shall be paid to or exercised by the
Participant’s executor, administrator, or legal representative.
 
Article 15.  Rights of Participants
 
15.1          Employment.  Nothing in this Plan or an Award Agreement shall
interfere with or limit in any way the right of the Company and/or its
Subsidiaries to terminate any Participant’s employment or service on the Board
or to the Company or any Subsidiary at any time or for any reason not prohibited
by law, nor confer upon any Participant any right to continue his employment or
service as a Director for any specified period of time.
 
Neither an Award nor any benefits arising under this Plan shall constitute an
employment contract with the Company and/or its Subsidiaries and, accordingly,
subject to Articles 3 and 16, this Plan and the benefits hereunder may be
terminated at any time in the sole and exclusive discretion of the Committee
without giving rise to any liability on the part of the Company and/or its
Subsidiaries.
 
15.2          Participation.  No individual shall have the right to be selected
to receive an Award under this Plan, or, having been so selected, to be selected
to receive a future Award.
 
15.3          Rights as a Shareholder.  Except as otherwise provided herein, a
Participant shall have none of the rights of a shareholder with respect to
Shares covered by any Award until the date a certificate has been delivered to
the Participant or book entries evidencing such Shares have been recorded by the
Company or its transfer agent.
 
Article 16.  Change in Control
 
Notwithstanding any other provision of this Plan to the contrary, the provisions
of this Article 16 shall apply in the event of a Change in Control, unless
otherwise determined by the Committee in connection with the grant of an Award
as reflected in the applicable Award Agreement, or as provided in an individual
severance or employment agreement to which a Participant is a party.
 
16.1          Upon a Change in Control, each then-outstanding Award may be
adjusted or substituted in accordance with Section 4.4 (subject to the
limitations set forth therein) with an award that meets the criteria set forth
in this Section 16.1 (each, a “Replacement Award,” and each adjusted or
substituted Award, a “Replaced Award”).  An adjusted or substituted award meets
the conditions of this Section 16.1 (and hence qualifies as a Replacement Award)
if (a) it is of the same type (e.g., stock option for Option, restricted stock
for Restricted Stock, restricted stock unit for Restricted Stock Unit, etc.) as
the Replaced Award, (b) it has a value at least equal to the value of the
Replaced Award, (c) it relates to publicly traded equity securities of the
Company or its successor in the Change in Control or another entity that is
affiliated with the Company or its successor following the Change in Control,
(d) if the Participant holding the Replaced Award is subject to U.S. federal
income tax under the Code, the tax consequences to such Participant under the
Code of the Replacement Award are not less favorable to such Participant than
the tax consequences of the Replaced Award, and (e) its other terms and
conditions are not less favorable to the Participant holding the Replaced Award
than the terms and conditions of the Replaced Award (including the provisions
that would apply in the event of a subsequent Change in Control).  Without
limiting the generality of the foregoing, the Replacement Award may take the
form of a continuation of the Replaced Award if the requirements of the
preceding sentence are satisfied. The determination of whether the conditions of
this Section 16.1 are satisfied will be made by the Committee, as constituted
immediately before the Change in Control, in its sole discretion.  Without
limiting the generality of the foregoing, the Committee may determine the value
of Awards and Replacement Awards that are stock options by reference to either
their intrinsic value or their fair value.
 
16.2          In the event that a Participant does not receive a Replacement
Award that meets the conditions set forth in Section 16.1 with respect to any of
his or her outstanding Awards upon a Change in Control, each such outstanding
Award will become fully vested and exercisable (as applicable) and any
restrictions applicable to such Award will lapse, with any applicable
performance goals deemed to have been achieved at the greater of target level as
of the date of such vesting or the actual performance level had the performance
period ended on the date of the Change in Control.  For the avoidance of doubt,
if all Awards hereunder are terminated without any Replacement Awards, then the
Company  or its successor in the Change in Control may terminate all Awards
whose exercise price is less than or equal to the value per Share realized in
connection with the Change in Control (without any consideration therefor).
 
16.3          If a Participant terminates his or her employment for Good Reason,
the Participant is involuntarily terminated for reasons other than for Cause, or
the Participant’s employment terminates due to the Participant’s death,
Disability or Retirement during the three year period commencing on the date of
a Change in Control, then (A) all Replacement Awards held by the Participant
will become fully vested and, if applicable, exercisable and free of
restrictions (with any applicable performance goals deemed to have been achieved
at a target level as of the date of such vesting), and (B) all Options and Stock
Appreciation Rights held by the Participant immediately before such termination
of employment that the Participant also held as of the date of the Change in
Control or that constitute Replacement Awards will remain exercisable for not
less than three years following such termination of employment or until the
expiration of the stated term of such Option or Stock Appreciation Rights,
whichever period is shorter (provided, however, that if the applicable Award
Agreement provides for a longer period of exercisability, that provision will
control).
 
16.4          Unless a Participant is subject to a dispute resolution provision
in an individual agreement (other than an Award Agreement) to which a
Participant and the Company or any of its Affiliates are parties, any
disagreement, dispute, controversy or claim arising out of or relating to the
existence of Cause or Good Reason shall be settled pursuant to the dispute
resolution provision set forth in the Participant’s applicable Award
Agreement(s).
 
16.5          No action shall be taken under this Article 16 which shall cause
an Award to fail to comply with Code Section 409A or the Treasury Regulations
thereunder, to the extent applicable to such Award.  In addition, if an Award is
subject to Code Section 409A, Article 16 of the Plan will be applicable only to
extent specifically provided in the Award Agreement and permitted pursuant to
Section 20.12 of the Plan.
 
Article 17.  Amendment, Modification, Suspension, and Termination
 
17.1          Amendment, Modification, Suspension, and Termination.  Subject to
Section 17.2, the Board or Committee may, at any time and from time to time,
alter, amend, modify, suspend, or terminate this Plan and any Award Agreement
in whole or in part; provided, however, that without the prior approval of the
Company’s shareholders, Options or SARs granted under this Plan will not be
repriced, replaced, or regranted through cancellation, or by reducing the Option
Price of a previously granted Option or the SAR Grant Price of a previously
granted SAR, nor will any outstanding Option or SAR having an exercise price per
Share less than the then current FMV be purchased for cash or other
consideration, and no amendment of this Plan shall be made without shareholder
approval if (a) such amendment would increase the maximum number of Shares
available for issuance to Participants under this Plan (except as otherwise
permitted under Section 4.4), or (b) shareholder approval is required by law,
regulation, or stock exchange rule, including, but not limited to, the Exchange
Act, the Code, and if applicable, the New York Stock Exchange Listed Company
Manual.
 
17.2          Awards Previously Granted.  Notwithstanding any other provision of
this Plan to the contrary (other than Section 17.3), no termination, amendment,
suspension, or modification of this Plan or an Award Agreement shall adversely
affect in any material way any Award previously granted under this Plan without
the written consent of the Participant holding such Award.
 
17.3          Amendment to Conform to Law.  Notwithstanding any other provision
of this Plan to the contrary, the Board or the Committee may amend the Plan or
an Award Agreement pursuant to the following:
 
 
(a)
The Board or the Committee may amend the Plan or an Award Agreement to take
effect retroactively or otherwise, as deemed necessary or advisable for the
purpose of conforming the Plan or an Award Agreement to any present or future
law relating to plans of this or similar nature, and to the administrative
regulations and rulings promulgated thereunder.  By accepting an Award under
this Plan, a Participant agrees to any amendment made pursuant to this Section
17.3 to any Award granted under the Plan without further consideration or
action.

 
 
(b)
The Board or the Committee may amend the Plan or an Award Agreement to (i)
exempt the Award from the requirements of Code Section 409A or preserve the
intended tax treatment of the benefits provided with respect to the Award, or
(ii) comply with the requirements of Section 409A of the Code and the Treasury
Regulations and other interpretive guidance thereunder.

 
Article 18.  Withholding
 
18.1          Tax Withholding.  The Company shall have the power and the right
to deduct or withhold, or require a Participant to remit to the Company, the
minimum amount necessary to satisfy federal, state, local and foreign taxes
required by law or regulation to be withheld with respect to any taxable event
relating to an Award.
 
18.2          Share Withholding.  With respect to withholding required upon the
exercise of Options or SARs, upon the lapse of restrictions on Restricted Stock
and Restricted Stock Units, or upon the achievement of performance goals related
to Awards, or any other taxable event arising as a result of an Award granted
hereunder, Participants may elect to satisfy the withholding requirement, in
whole or in part, by having the Company withhold Shares  and/or Restricted Stock
Units having a Fair Market Value on the date the tax is to be determined equal
to the minimum amount necessary to satisfy the federal, state, local and foreign
taxes required by law or regulation to be withheld with respect to such
transaction.  All such elections shall be irrevocable and, with respect to
elections made by any Participant other than an “officer” within the meaning of
Rule 16a-1 promulgated under the Exchange Act, such elections may be subject to
any restrictions or limitations that the Committee may impose.
 
Article 19.  Successors
 
All obligations of the Company under this Plan with respect to Awards granted
hereunder shall be binding on any successor to the Company, whether the
existence of such successor is the result of a direct or indirect purchase,
merger, consolidation, or otherwise, of all or substantially all of the business
and/or assets of the Company.
 
Article 20.  General Provisions
 
20.1          Legend.  The certificates for Shares may include any legend which
the Committee deems appropriate to reflect any restrictions on transfer of such
Shares.
 
20.2          Gender and Number.  Except where otherwise indicated by the
context, any masculine term used herein also shall include the feminine, the
plural shall include the singular, and the singular shall include the plural.
 
20.3          Severability. In the event any provision of this Plan shall be
held illegal or invalid for any reason, the illegality or invalidity shall not
affect the remaining parts of this Plan, and this Plan shall be construed and
enforced as if the illegal or invalid provision had not been included.
 
20.4          Requirements of Law. The granting of Awards and the issuance of
Shares under this Plan shall be subject to all applicable laws, rules, and
regulations, and to such approvals by any governmental agencies or national
securities exchanges as may be required.
 
20.5          Delivery of Title. The Company shall have no obligation to issue
or deliver evidence of title for Shares issued under this Plan prior to:
 
(a)  
Obtaining any approvals from governmental agencies that the Company determines
are necessary or advisable; and

 
(b)  
Completion of any registration or qualification of the Shares under any
applicable federal, state or foreign law or ruling of any governmental body that
the Company determines to be necessary or advisable.

 
20.6          Inability to Obtain Authority. The inability of the Company to
obtain authority from any regulatory body having jurisdiction, which authority
is deemed by the Company’s counsel to be necessary to the lawful issuance or
sale of any Shares hereunder, shall relieve the Company of any liability in
respect of the failure to issue or sell such Shares as to which such requisite
authority shall not have been obtained.
 
20.7          Investment Representations. The Committee may require any
individual receiving Shares pursuant to an Award under this Plan to represent
and warrant in writing that the individual is acquiring the Shares for
investment and without any present intention to sell or distribute such Shares.
 
20.8          Employees Based Outside of the United States.  Notwithstanding any
provision of this Plan to the contrary, in order to comply with the laws and/or
practices in other countries in which the Company and its Subsidiaries operate
or have Employees or Directors or to enact provisions desirable for
administration or necessary to obtain favorable tax or accounting treatment in
such other countries, the Committee, in its sole discretion, shall have the
power and authority to: (i) determine which Subsidiaries shall be covered by
this Plan; (ii) determine which Employees or Directors outside the United States
are eligible to participate in this Plan; (iii) subject to Section 17.2, modify
the terms and conditions of any Award granted to Employees or Directors outside
the United States; (iv) establish subplans and modify exercise procedures, in
each case with respect to Employees and Directors outside of the United States
(any such subplans and/or modifications shall be attached to this Plan as
appendices), provided, however, that no such subplans and/or modifications shall
increase the share limitations contained in Article 4, except as otherwise
permitted under Section 4.4; and (v) take any action, before or after an Award
is made to an Employee or Director outside of the United States, that it deems
advisable to obtain approval or comply with any necessary local governmental
regulatory exemptions, approvals or practices.  Notwithstanding the foregoing,
the Committee may not take any actions hereunder, and no Awards shall be granted
(and the Company shall have no obligation to deliver any Shares), that would
violate the Exchange Act, the Code, any applicable federal, state or foreign
securities law or governing statute or any other applicable law.
 
20.9             Uncertificated Shares.  To the extent that this Plan provides
for issuance of certificates to reflect the transfer of Shares, the transfer of
such Shares may be effected on a noncertificated basis, to the extent not
prohibited by applicable law or the rules of any stock exchange.
 
20.10           Unfunded Plan. Participants shall have no right, title, or
interest whatsoever in or to any investments that the Company and/or its
Subsidiaries may make to aid it in meeting its obligations under this
Plan.  Nothing contained in this Plan, and no action taken pursuant to its
provisions, shall create or be construed to create a trust of any kind, or a
fiduciary relationship between the Company and any Participant, beneficiary,
legal representative, or any other individual.  To the extent that any
individual acquires a right to receive payments from the Company and/or its
Subsidiaries under this Plan, such right shall be no greater than the right of
an unsecured general creditor of the Company or a Subsidiary, as the case may
be.  All payments to be made hereunder shall be paid from the general funds of
the Company or a Subsidiary, as the case may be, and no special or separate fund
shall be established and no segregation of assets shall be made to assure
payment of such amounts.
 
20.11           Retirement and Welfare Plans.  Neither Awards made under this
Plan nor Shares or cash paid pursuant to such Awards, may be included as
“compensation” for purposes of computing the benefits payable to any Participant
under the Company’s or any Subsidiary’s retirement plans (both qualified and
non-qualified) or welfare benefit plans unless such other plan expressly
provides that such compensation shall be taken into account in computing a
Participant’s benefit.
 
20.12           Code Section 409A.  It is intended that any Award made under
this Plan that results in the deferral of compensation (as defined under Code
Section 409A) complies with the requirements of Code Section 409A.
 
 
(a)
To the extent applicable, the Plan and any Award Agreement shall be interpreted
in accordance with Code Section 409A and the Treasury Regulations and other
guidance promulgated thereunder, including, without limitation, any such
regulations or other guidance that may be issued after the Effective Date. For
purposes of the foregoing, with respect to any Award that results in a deferral
of compensation as defined in Code Section 409A and that is subject to
settlement or payment upon a Participant’s termination of employment shall be
settled or paid, as applicable, only if such termination of employment qualifies
as a separation from service within the meaning of Code Section 409A.

 
 
 (b)
Neither a Participant nor any of a Participant’s creditors or beneficiaries will
have the right to subject any Award that results in a deferral of compensation
as defined in Code Section 409A to any anticipation, alienation, sale, transfer,
assignment, pledge, encumbrance, attachment, or garnishment.  Except as
permitted under Code Section 409A, any Award that results in a deferral of
compensation as defined in Code Section 409A may not be reduced by, or offset
against, any amount owing by a Participant to the Company or any of its
affiliates.

 
 
(c)
If, at the time of a Participant’s separation from service (within the meaning
of Code Section 409A), (i) the Participant is a specified employee (within the
meaning of Code Section 409A and using the identification methodology selected
by the Company from time to time) and (ii) the Company makes a good faith
determination that an amount payable hereunder constitutes deferred compensation
(within the meaning of Code Section 409A), the payment of which is required to
be delayed pursuant to the six-month delay rule set forth in Code Section 409A
in order to avoid taxes or penalties under Code Section 409A, then the Company
will not pay such amount on the otherwise scheduled payment date but, unless
otherwise provided in the Award Agreement, will instead pay it on the first
business day of the seventh month after such separation from service.

 
 
(d)
The time or schedule of payment with respect to any Award that results in the
deferral of compensation may be accelerated as permitted by Treasury Regulation
Section 1.409A-3(j)(4)(ii) to the extent necessary to fulfill a domestic
relations order as defined in Section 414(p)(1)(B) of the Code.

 
 
(e)
Notwithstanding any provision of the Plan and grants hereunder to the contrary,
in light of the uncertainty with respect to the proper application of Code
Section 409A, the Company reserves the right to make amendments to the Plan and
grants hereunder as the Company deems necessary or desirable to avoid the
imposition of taxes or penalties under Code Section 409A.  In any case, a
Participant is solely responsible and liable for the satisfaction of all taxes
and penalties that may be imposed on a Participant or for a Participant’s
account in connection with the Plan and grants hereunder (including any taxes
and penalties under Code Section 409A), and neither the Company nor any of its
affiliates have any obligation to indemnify or otherwise hold a Participant
harmless from any or all of such taxes or penalties.

 
20.13           Nonexclusivity of this Plan.  The adoption of this Plan shall
not be construed as creating any limitations on the power of the Board or
Committee to adopt such other compensation arrangements as it may deem desirable
for any Participant.
 
20.14           No Constraint on Corporate Action.  Nothing in this Plan shall
be construed to: (a) limit, impair, or otherwise affect the Company’s or a
Subsidiary’s right or power to make adjustments, reclassifications,
reorganizations, or changes of its capital or business structure, or to merge or
consolidate, or dissolve, liquidate, sell, or transfer all or any part of its
business or assets; or (b) limit the right or power of the Company or a
Subsidiary to take any action which such entity deems to be necessary or
appropriate.
 
20.15           Governing Law; Exclusive Jurisdiction and Venue.  The Plan and
each Award Agreement shall be governed by the laws of the State of California,
excluding any conflicts or choice of law rule or principle that might otherwise
refer construction or interpretation of this Plan to the substantive law of
another jurisdiction.  Unless otherwise provided in the Award Agreement,
recipients of an Award under this Plan are deemed to submit to the exclusive
jurisdiction and venue of the federal or state courts of California, to resolve
any and all issues that may arise out of or relate to this Plan or any Award
Agreement.