<PAGE>
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE
SECURITIES EXCHANGE ACT OF 1934
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Section 249.14a-11(c) or Section 240.14a-12
SAN DIEGO GAS & ELECTRIC COMPANY
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(Name of Registrant as Specified In Its Charter)
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(Name of Person(s) Filing Proxy Statement)
Payment of Filing Fee (Check the appropriate box):
[X] $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), or 14a-6(j)(2).
[ ] $500 per each party to the contrary pursuant to Exchange Act Rule
14a-6(i)(3).
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
1) Title of each class of securities to which transaction applies:
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2) Aggregate number of securities to which transaction applies:
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3) Per unit price or other underlying value of transaction computed pursuant
to Exchange Act Rule 0-11:*
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4) Proposed maximum aggregate value of transaction:
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* Set forth the amount on which the filing fee is calculated and state how it
was determined.
[ ] Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing:
1) Amount Previously Paid:__________________________________________________
2) Form, Schedule or Registration No.:______________________________________
3) Filing Party:____________________________________________________________
4) Date Filed:______________________________________________________________
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[CAMERA-READY-ART]
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Tuesday, April 26, 1994
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NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
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and Proxy Statement
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CONTENTS page
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Chairman's Letter
Notice of Annual Meeting
Proxy Statement 1
Meeting Date, Voting, Proxies 1
Election of Directors 1
Nominees 2
Committees 4
Security Ownership of Management and Certain Beneficial Holders 5
Executive Compensation and Transactions with Management and Others 6
Other Business to be Brought Before the Meeting 15
Relationship with Independent Public Accountant 15
Annual Report 15
Shareholder Proposals for 1995 Annual Meeting 15
Proxy Solicitations 15
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SAN DIEGO GAS & ELECTRIC COMPANY
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DEAR SHAREHOLDER:
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You are invited to attend the 1994 Annual Meeting of San Diego Gas & Electric
Company Shareholders at 11 a.m. on Tuesday, April 26, 1994, at the San Diego
Convention Center, 111 West Harbor Drive, Ballroom Section 6A, San Diego,
California.
As is our custom, refreshments will be served before the meeting.
During the meeting, SDG&E's business will be reviewed. A summary of the meeting
will be included in the Spring Investors Report, which will be mailed to you in
May.
Whether or not you plan to attend the meeting, please fill out, sign and return
your proxy card right away. Your vote is very important.
Sincerely yours,
Thomas A. Page
Chairman of the Board, President
and Chief Executive Officer
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Proxy Statement
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Introduction
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MEETING DATE, VOTING, PROXIES
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The enclosed proxy is solicited by the board of directors of San Diego Gas &
Electric Company (the company) for the annual meeting of shareholders, together
with any adjournment thereof (annual meeting), to be held on April 26, 1994 at
11 a.m. The meeting will be held at the San Diego Convention Center, 111 West
Harbor Drive, Ballroom Section 6A, San Diego, California. Mail to the company
should be addressed to the Office of the Secretary, P.O. Box 1831, San Diego,
CA 92112-4150.
The enclosed proxy may be revoked at any time before it is exercised by filing
a written notice of revocation with the company or by presenting an executed
proxy bearing a later date at or before the meeting. A shareholder also may re-
voke a proxy by attending the meeting and voting in person. Attendance at the
annual meeting will not in and of itself constitute revocation of a proxy. All
shares represented by valid proxies will be voted as specified in this state-
ment.
The board of directors has fixed the close of business on March 1, 1994 as the
record date for the determination of shareholders entitled to notice of and to
vote at this meeting or any adjournment of this meeting.
The company has three classes of stock, of which there were issued and out-
standing at the close of business on March 1, 1994, (a) 116,479,027 shares of
common stock, without par value; (b) 1,374,650 shares of cumulative preferred
stock, $20 par value; and (c) 3,190,000 shares of preference stock (cumula-
tive), without par value. A shareholder of record as of the close of business
on March 1, 1994 is entitled to one vote per share for each share of common
stock held and two votes per share for each share of cumulative preferred stock
held. The preference stock (cumulative) has voting rights only in limited cir-
cumstances described in the company's Articles of Incorporation and as allowed
by California law. Unless otherwise indicated herein, shares of common stock
and cumulative preferred stock are referred to as "shares."
Shares represented by properly executed proxies received by the company prior
to or at the annual meeting will be voted at the meeting in accordance with the
instructions specified in the proxies. If no instructions are specified in the
proxies, shares will be voted FOR the election of the board's nominees for di-
rectors, unless authority to vote is withheld as provided in the proxy. Should
any of the board nominees become unavailable (an event which is not anticipat-
ed), and the size of the board is not reduced accordingly, the proxies will be
voted for the remainder of the listed nominees and for such other nominees as
may be designated by the board as replacements for those who become unavaila-
ble. In the event that any other matters properly come before the meeting, the
holders of proxies solicited by the board of directors will vote on those mat-
ters in accordance with their judgment. Discretionary authority to do so is in-
cluded in the proxy.
This proxy statement and the enclosed proxy were first mailed on or about March
8, 1994, to shareholders entitled to vote at the meeting.
Shares represented by proxies which are marked "abstain" with respect to any
proposal will be counted in the number of votes cast, but will not be counted
as votes for or against the proposal. If a broker or other nominee holding
shares for a beneficial owner does not vote on a proposal, the shares will not
be counted in the number of votes cast.
Election of Directors
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(Item 1 on all proxy cards.)
The full board of directors is to be elected at the annual meeting to serve un-
til the end of the ensuing year (or until their successors are duly elected and
qualified).
A shareholder of record as of the close of business on March 1, 1994 is enti-
tled to one vote per share for each share of common stock held and two votes
per share for each share of cumulative preferred stock held.
1
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The eight nominees receiving the highest number of affirmative votes shall be
elected to the board.
The persons named in the enclosed proxy card will vote the number of shares
shown thereon. Proxies given to the persons named will be voted for the elec-
tion of all nominees listed below, unless authority to vote is withheld with
respect to one or more nominees. All of the nominees are now directors of the
company and have been elected previously by the shareholders. Should any of the
nominees become unavailable, the proxies will be voted for the remainder of the
listed nominees and for such other nominees as may be designated by the present
board of directors as replacements of those who become unavailable.
THE BOARD RECOMMENDS THE ELECTION OF THE BOARD'S NOMINEES FOR DIRECTORS.
NOMINEES
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RICHARD C. ATKINSON, PH.D.
Dr. Atkinson has been the chancellor of the
University of California at San Diego since
July, 1980. He is a director of Qualcomm,
Inc. Before joining UCSD, he served as
director of the National Science
Foundation. He is a former long-term member
of the faculty at Stanford University.
Age 64
Director since 1992
Member of the executive and
audit committees
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ANN BURR
Ms. Burr is president of the San Diego
Division of Time Warner Cable, which
includes Southwestern Cable TV and American
Cablevision of Coronado.
Age 47
Director since 1993
Member of the finance and
nominating committees
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RICHARD A. COLLATO
Mr. Collato has been president and chief
executive officer of the YMCA of San Diego
County since January 1981. He is a director
of Y-Mutual Ltd., a reinsurance company,
Springfield College, and the Armed Services
YMCA of the USA.
Age 50
Director since 1993
Member of the audit and nominating
committees
2
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DANIEL W. DERBES
Mr. Derbes is president of Signal Ventures.
From November 1985 until December 31, 1988,
he was president of Allied-Signal
International Inc. and executive vice
president of Allied-Signal Inc., a multi-
national advanced technologies company. He
is a director of Oak Industries, Inc., WD-
40 Co., Pacific Diversified Capital Company
(PDC) and Wahlco Environmental Systems, Inc. (Wahlco
Environmental).
Age 63
Director since 1983
Chairman of the audit committee and
member of the executive committee
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ROBERT H. GOLDSMITH
Mr. Goldsmith is the chairman, president
and chief executive officer of Exten
Industries, Inc. He is the former chairman
and chief executive officer of Rohr, Inc.
He is also a former vice chairman and chief
operating officer of Precision Forge Co.,
senior vice president of Pneumo
Corporation's Aerospace and Industrial
Group and vice president, commercial (aircraft) engine
projects division and the gas turbine division of General
Electric Company.
Age 63
Director since 1992
Member of the executive compensation
and finance committees
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RALPH R. OCAMPO, M.D.
Dr. Ocampo is a San Diego physician and
surgeon.
Age 62
Director since 1983
Chairman of the finance committee
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THOMAS A. PAGE
Mr. Page has been chairman and chief
executive officer of the company since
February 1983. Mr. Page was president of
the company from February 1983 to December
1991 and was re-elected as president
effective January 11, 1994. Mr. Page is a
director of Burnham Pacific Properties
and the chairman of the board and a
director of PDC and Wahlco Environmental.
Age 60
Director since 1979
Chairman of the executive and
nominating committees
3
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CATHERINE FITZGERALD WIGGS
Mrs. Wiggs is executive vice president of
Internationale Nederlanden Group, North
America, a life, health, property and
casualty company. Mrs. Wiggs was formerly
executive vice president, Internationale
Nederlanden Group, America Life Companies,
and a member of the management executive
committee of Security Life of Denver, a
wholly owned subsidiary of Nationale-Nederlanden N.V. Prior
to that Mrs. Wiggs was executive vice president, human
resources and a member of the management executive committee
of Broadway Stores, Inc. Division of Carter Hawley Hale
Stores, Inc., a retail department store chain.
Age 60
Director since 1979
Chairwoman of the executive
compensation committee and member of
the audit committee
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FOOTNOTES
During 1993, ten meetings of the board were held. Each of the directors at-
tended 75% or more of the aggregate of (1) the total number of board meetings
and (2) the total number of meetings held by all board committees on which the
director served, except Dr. Atkinson, who attended 65%. Most of his absences
were due to conflicting business commitments out of the city.
On March 4, 1993, Dr. Ocampo petitioned for protection under Chapter 11 of the
Federal Bankruptcy Code. This filing was made in connection with certain legal
proceedings involving a limited partnership in which Dr. Ocampo is a general
partner. Dr. Ocampo expects to emerge from the bankruptcy through a plan of re-
organization to be filed soon.
COMMITTEES
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In addition to Executive and Finance committees, the board has Audit, Executive
Compensation and Nominating committees.
AUDIT COMMITTEE
Members of this committee are directors R. C. Atkinson, R. A. Collato, D. W.
Derbes, and C. Fitzgerald Wiggs. It held two meetings during 1993. In addition
to recommending an independent auditor for each ensuing year, this committee
reviews (1) the overall plan of the annual independent audit, (2) financial
statements, (3) audit results, (4) the scope of internal audit procedures and
(5) the auditors' evaluation of internal controls. This committee is composed
exclusively of directors who are not salaried employees of the company.
EXECUTIVE COMPENSATION COMMITTEE
Members of this committee are directors R. H. Goldsmith and C. Fitzgerald
Wiggs. It held five meetings during 1993. This committee reviews the salaries
and other forms of compensation of executives of the company and makes compen-
sation recommendations to the full board. This committee is composed exclu-
sively of directors who are not salaried employees of the company.
4
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NOMINATING COMMITTEE
Members of this committee are directors A. Burr, R. A. Collato and T. A. Page.
It held one meeting during 1993. In addition to considering and recommending
nominees to the board, this committee recommends (1) criteria for the board and
committee composition and membership and (2) directors' compensation. It con-
siders any nominees recommended by shareholders by letter to the board. This
committee is composed of two directors who are not salaried employees of the
company and the chief executive officer.
SECURITY OWNERSHIP OF MANAGEMENT AND CERTAIN BENEFICIAL HOLDERS
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The following table sets forth the beneficial ownership of (1) all directors
and the five highest compensated officers individually, (2) all directors and
officers as a group and (3) the only beneficial owners known to the company to
hold more than 5% of any class of the company's voting securities as of March
1, 1994. All holdings listed below are common stock:
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<TABLE>
<CAPTION>
AMOUNT AND
NATURE OF
BENEFICIAL PERCENT
OWNERSHIP OF
BENEFICIAL OWNER (SHARES)(A) CLASS
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<S> <C> <C>
Directors and Named Executive Officers:
R. C. Atkinson 1,000 *
A. Burr 1,000 *
R. A. Collato 1,877 *
D. W. Derbes 1,907 *
R. H. Goldsmith 1,015 *
R. R. Ocampo 13,128 *
C. Fitzgerald Wiggs 2,354 *
T. A. Page 150,023 *
J. E. Thomas 113,428 *
S. L. Baum 39,824 *
D. E. Felsinger 22,807 *
R. L. Haney 15,434 *
All directors and officers as a group (20 persons) 465,632(B) *
Other:
First Interstate Bank of California 13,632,627(C) 11.704%
Trust Securities, W11-4
707 Wilshire Boulevard
Los Angeles, CA 90017
Union Bank Trust Department 10,162,266(D) 8.725%
530 B Street
San Diego, CA 92101
</TABLE>
*less than 1% shares outstanding
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(A) All shares are beneficially owned by the directors and officers, with sole
voting and investment power, except for
. Dr. Atkinson: 1,000 shares held jointly with spouse/children of same
household.
. Mr. Collato: 1,000 shares held jointly with spouse/children of same
household; 877 shares credited to a CSIP account with the shareholders'
agent.
. Mr. Derbes: 400 shares held jointly with spouse/children of the same
household; 1,507 shares credited to a CSIP account with the shareholders'
agent.
. Dr. Ocampo: 13,128 shares held jointly with spouse/children of same
household.
. Mrs. Wiggs: 1,954 shares credited to a CSIP account with the
shareholders' agent.
. Mr. Page: 57,538 shares held jointly with or separately by
spouse/children of same household; 8,557 shares credited to a CSIP ac-
count with the shareholders' agent; 47,778 shares credited as of 2/1/94
to a Savings Plan account with the trustee; 36,150 shares of restricted
stock purchased under the LTIP as to which vesting has not occurred.
. Mr. Thomas: 12,257 shares credited to a CSIP account with the sharehold-
ers' agent; 61,259 shares credited as of 2/1/94 to a Savings Plan account
with the trustee; 14,420 shares of restricted stock purchased under the
LTIP as to which vesting has not occurred.
. Mr. Baum: 8,407 shares credited to a CSIP account with the shareholders'
agent; 1,902 shares credited as of 2/1/94 to a Savings Plan account with
the trustee; 11,370 shares of restricted stock purchased under the LTIP
as to which vesting has not occurred.
. Mr. Felsinger: 4,816 shares credited as of 2/1/94 to a Savings Plan ac-
count with the trustee; 8,015 shares of restricted stock purchased under
the LTIP as to which vesting has not occurred.
. Mr. Haney: 2,044 shares held jointly with spouse/children of same house-
hold; 457 shares credited to a CSIP account with the shareholders' agent;
2,005 shares credited as of 2/1/94 to a Savings Plan account with the
trustee; 7,745 shares of restricted stock purchased under the LTIP as to
which vesting has not occurred.
(B) Excludes 30,956 shares delivered to the company on 1/31/94 to satisfy cer-
tain withholding tax obligations relating to the vesting of shares pursuant
to the LTIP as described below under "1986 Long-Term Incentive Plan."
All shares beneficially owned by the directors and officers, with sole vot-
ing and investment power, except for
5
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. 64,445 shares held jointly with or separately by spouses or children liv-
ing in the same household.
. 148,998 shares credited as of 2/1/94 to the officers' Savings Plan ac-
counts with the trustee.
. 34,815 shares credited to CSIP accounts with the shareholders' agent.
. 120,605 shares of restricted stock purchased by officers in 1990, 1991,
1992, 1993 and 1994 under the LTIP, as to which restrictions for vesting
of shares have not yet been satisfied.
(C) 11,556,513 shares are held by the bank in its capacity as shareholders'
agent for the CSIP. The bank holds 2,051,624 shares of common stock and
24,490 shares of cumulative preferred stock as trustee for various other
trusts.
(D) 10,116,428 shares as of 2/1/94 are held by the bank in its capacity as
trustee under the Savings Plan. The trustee has discretion under the
Savings Plan to vote the shares in the absence of voting directions by the
Savings Plan participants. The agent holds 45,838 shares of common stock
and 100 shares of cumulative preferred stock as trustee for various other
trusts.
Section 16(a) of the Securities Exchange Act of 1934, as amended, requires the
company's directors, executive officers and holders of more than 10% of the
company's common stock to file with the Securities and Exchange Commission ini-
tial reports of ownership and reports of changes in ownership of common stock
and other equity securities of the company. The company believes that during
the fiscal year ended December 31, 1993, its officers, directors and holders of
more than 10% of the company's common stock complied with all Section 16(a)
filing requirements, with the exception of R. Lee Haney, a senior vice presi-
dent of the company, who reported one transaction late on a subsequently filed
Form 4.
EXECUTIVE COMPENSATION AND TRANSACTIONS WITH MANAGEMENT AND OTHERS
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The following table sets forth information as to all compensation awarded,
paid, earned or distributed, by the company during the last three fiscal years
for services in all capacities to or for the benefit of the chief executive of-
ficer and the four highest compensated executive officers whose earned compen-
sation exceeded $100,000.
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SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG TERM
ANNUAL COMPENSATION COMPENSATION
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OTHER ANNUAL LTIP ALL OTHER
NAME AND PRINCIPAL SALARY BONUS COMPENSATION PAYOUTS COMPENSATION
POSITION YEAR (A) (B) (C) (D)(E) (F)
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<S> <C> <C> <C> <C> <C> <C>
T. A. Page 1993 $509,203 $337,000 $9,910 $513,777 $55,161
Chairman and 1992 486,408 265,000 5,079 344,703 48,682
Chief Executive Officer 1991 482,078 242,000 2,493 149,419 48,256
J. E. Thomas 1993 289,481 191,000 7,583 200,718 33,591
President and 1992 274,328 147,000 6,472 134,832 29,458
Chief Operating Officer 1991 249,584 94,000 5,582 58,618 28,721
S. L. Baum 1993 244,307 129,000 1,107 162,006 17,695
Executive Vice President 1992 224,650 90,000 232 110,504 15,496
1991 218,223 81,000 64 43,485 14,872
D. E. Felsinger 1993 216,970 111,000 1,881 96,401 10,755
Executive Vice President 1992 187,731 73,000 668 60,334 9,139
1991 163,847 62,000 127 24,137 8,618
R. L. Haney 1993 188,280 98,000 0 113,100 10,987
Senior Vice President 1992 176,784 70,000 0 72,444 7,418
Customer and Marketing 1991 168,792 64,000 0 30,650 7,464
Services
</TABLE>
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(A) Amounts shown reflect compensation paid and amounts deferred. All officers
may elect to defer bonuses and base salary for periods of time they select.
Restricted stock awarded in 1993 pursuant to the LTIP is reported below in
the Long-Term Incentive Plan table.
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(B) Bonuses are paid pursuant to the Executive Incentive Compensation Plan
(EICP) as described below under "Report of the Executive Compensation
Committee".
(C) Other compensation includes any deferred compensation interest above 120%
of the applicable federal rate.
(D) Long-term incentive payouts relate to restrictions lifted on restricted
stock awarded pursuant to the LTIP. Payouts are based on company perfor-
mance as described below under "1986 Long-Term Incentive Plan."
(E) The aggregate holdings/value of restricted stock held on December 31, 1993,
by the individuals listed in this table, are: T. A. Page, 59,840
shares/$1,338,920; J. E. Thomas, 23,675 shares/$529,728; S. L. Baum, 18,840
shares/$421,545; D. E. Felsinger, 12,460 shares/$278,793; and R. L. Haney,
12,960 shares/$289,980. The value of the aggregate restricted stock hold-
ings at December 31, 1993 is determined by multiplying $24.875, the fair
market value of the company's common stock on December 31, 1993, less the
purchase price of $2.50 per share, by the number of shares held. These De-
cember 31, 1993 share amounts include the March 1, 1994 share amounts shown
in "Security Ownership of Management and Certain Beneficial Holders". The
March 1, 1994 amounts are less due to the vesting of certain shares in Jan-
uary 1994. Regular quarterly dividends are paid on restricted stock held by
these individuals, when declared by the company.
(F) All other compensation includes a cash amount paid to each officer desig-
nated solely for the purpose of paying (a) the premium for an insurance
policy providing death benefits equal to two times such officer's current
compensation; such cash amount includes a gross-up payment such that the
net amount retained by each officer, after deduction for any income tax im-
posed on such payment, will be equal to the gross amount which would have
been paid to such officer had the income tax not been imposed; (b) the com-
pany match under deferred compensation agreements which allow officers who
have exceeded the maximum pretax amount under the Savings Plan to continue
to make pretax deferrals of base compensation to an account in their name
up to a maximum of 15%; up to 6% of base compensation will be matched by a
company contribution of 50 cents per dollar deferred; no amount can be de-
ferred by an officer or matched by the company under this agreement until
the officer contributes to the Savings Plan the maximum amount allowed by
the tax law; and (c) company contributions to the Savings Plan. The respec-
tive amounts paid in fiscal year 1993 for each of the above officers were:
T. A. Page, $39,799, $13,477, and $1,885; J. E. Thomas, $24,713, $6,886 and
$1,992; S. L. Baum, $10,207, $5,530 and $1,958; D. E. Felsinger, $5,444,
$3,723 and $1,588; and R. L. Haney, $8,692, $0, and $2,295.
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COMPENSATION OF DIRECTORS
During 1993, directors not holding salaried positions in the company were paid
an annual retainer of $30,000, payable at the rate of $2,500 per month. No ad-
ditional fees were paid for attendance at any meeting of the board or of any
committee of the board. Non-salaried directors are reimbursed for their out-of-
pocket expenses incurred to attend meetings. All directors except Mr. Page are
non-salaried directors.
D. W. Derbes and T. A. Page are directors of the company who are also directors
of PDC and Wahlco Environmental. As a non-salaried director, D. W. Derbes re-
ceives a $500 fee for attending each meeting of PDC. D. W. Derbes also receives
an annual retainer of $12,000 plus a $1,000 fee for attending each meeting of
Wahlco Environmental.
Mr. Page received no fees or other compensation for serving as a director of
the company or any of its subsidiaries.
Directors may elect to defer their retainers and/or fees for periods of time
they select.
On December 17, 1990, the board adopted a Retirement Plan for Directors appli-
cable to directors serving on the board on or after such date. If a current di-
rector has at least five years of total board service, then, beginning in the
calendar quarter following the later of the director's retirement from the
board or attaining age 65, the director (or a surviving spouse) will receive
during each subsequent 12-month period, a benefit amount equal to the direc-
tor's annual retainer (currently $30,000) for a benefit period equal to the
number of years of the director's total service on the board. The benefit will
end upon the completion of the benefit period or the death of the later to die
of the director and a surviving spouse, whichever occurs first. In computing
the benefit period, periods of service as an employee director shall be disre-
garded.
EMPLOYMENT CONTRACT OF MR. PAGE
On September 12, 1988, Thomas A. Page and the company entered into an employ-
ment agreement dated as of June 15, 1988. Mr. Page's employment agreement pro-
vides that he will serve as chief executive officer and chairman of the board
of directors of the company for a period of two years beginning June 15, 1988,
subject to automatic extensions
7
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for successive two-year periods (unless the contract is terminated as described
below) and that he will receive a salary at a rate of not less than $31,916.66
per month or such greater amount as may, from time to time, be determined by
the board.
The employment agreement also provides that Mr. Page will be entitled to par-
ticipation in the EICP, any other annual bonus plan, the Savings Plan, the LTIP
and any other long-term incentive plan. In addition, Mr. Page is entitled to
participate in the Supplemental Executive Retirement Plan (SERP) and the Pen-
sion Plan. Pursuant to an earlier agreement between Mr. Page and the company,
Mr. Page was credited with years of service under the Pension Plan and the SERP
equal to his years of service with the company plus five extra years.
Under the employment agreement, if Mr. Page's employment is terminated (i) by
the board upon two years' written notice, (ii) upon his death or permanent dis-
ability, (iii) by the company for cause or (iv) by Mr. Page upon 30 days writ-
ten notice to the company, which termination is other than a "Constructive Ter-
mination" (as defined below), he will receive benefits through the last day of
his term of employment and no additional benefits. If Mr. Page's employment is
terminated (i) because of the dissolution, liquidation or winding-up of the
company, (ii) by a majority vote of the company's board without cause upon 30
days written notice or (iii) by Mr. Page as a result of (A) any violation of
the compensation provisions of the employment agreement, (B) any adverse and
significant change in Mr. Page's position, duties, responsibilities or status,
including the failure to be elected to the board and as chief executive officer
of the company or (C) a change in Mr. Page's normal business location to a
point away from the company's main headquarters (each, a Constructive Termina-
tion), he will be entitled to two years' salary paid in a lump sum plus a bonus
equal to 200% of the average of the three highest bonuses paid to him during
the previous five years, continued health and life insurance benefits under
various plans, his SERP benefit (without regard to the limit described therein
relating to Section 280G of the Internal Revenue Code of 1986, as amended (the
Code)) and his LTIP benefit. If any of the payments set forth in the previous
sentence become subject to the excise tax imposed by Section 4999 of the Code,
the company will pay Mr. Page an additional amount such that the net amount re-
tained by Mr. Page after deduction for such excise tax and any income and ex-
cise tax imposed on such additional amount will be equal to the gross amount
which would have been paid to Mr. Page under the agreement had the excise tax
not been imposed. The benefits payable to Mr. Page under the agreement on ac-
count of a change in control are in lieu of any benefits which would have oth-
erwise been payable to Mr. Page under the Executive Severance Allowance Plan.
The term change in control includes such significant events as those described
under "Supplemental Executive Retirement Plan."
1986 LONG TERM INCENTIVE PLAN
LONG TERM INCENTIVE PLAN-
AWARDS IN LAST FISCAL YEAR
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
ESTIMATED
FUTURE
PAYOUTS UNDER
NUMBER OF PERFORMANCE NON-STOCK-
RESTRICTED PERIOD PRICE-BASED
NAME SHARES UNTIL PAYOUT PLANS (A)(B)
- --------------------------------------------------------------------------------
<S> <C> <C> <C>
T. A. Page 13,000 Four Annual Periods $289,250
J. E. Thomas 5,280 Four Annual Periods 117,480
S. L. Baum 4,100 Four Annual Periods 91,225
D. E. Felsinger 3,280 Four Annual Periods 72,980
R. L. Haney 2,740 Four Annual Periods 60,965
</TABLE
- --------------------------------------------------------------------------------
(A) The value (target) of the restricted stock awards is determined by multi-
plying $24.75, the fair market value of the company's common stock on the
date of grant, December 10, 1993, less the purchase price of $2.50 per
share, by the number of shares awarded.
(B) The payout amounts set forth in this column represent both the maximum and
the target amounts payable upon achievement of all performance-vesting
goals. The minimum payout upon failure to achieve any of the performance
vesting goals would be $0. The actual payout will depend upon the achieve-
ment of performance-vesting goals and upon the fair market value of the
company's common stock at the date of vesting.
The LTIP provides that the executive compensation committee may grant to cer-
tain executives any combination of nonqualified stock options, incentive stock
options, restricted stock, stock appreciation rights, performance awards, stock
payments or dividend equivalents. As of December 31, 1993, all grants made un-
der the LTIP have been in the form of restricted stock.
With respect to LTIP shares purchased in 1986 through 1988, all restrictions
have been lifted in prior years.
With respect to LTIP shares purchased in 1989, restrictions on one quarter of
the number of shares originally placed in escrow were to be released and the
shares were to be delivered to the executives for each of the four succeeding
calendar years in which the company's total return to its shareholders was in
the top 25% of comparable utilities. The restrictions on all such shares that
were not so released were to be released and the shares were to be delivered to
the executives if, and only if, the total return to shareholders for the four-
year period ending December 31, 1993, was in the top 40% for comparable utili-
ties. The restrictions have been lifted as to all shares purchased in
1989, and such shares have been delivered to the executives.
8
<PAGE>
- --------------------------------------------------------------------------------
With respect to LTIP shares purchased in 1990, 1991, 1992 and 1993, restric-
tions on one-quarter of the number of shares originally placed in escrow are to
be released and the shares are to be delivered to the executives for each of
the four succeeding calendar years if the company's earnings per share meets or
exceeds the earnings per share target set by the executive compensation commit-
tee or if, at the end of the first, second and third quarters of the following
year, earnings for the twelve months then ending equal or exceed the weighted
average of the targets for the prior year and the current year. In addition, as
to shares purchased in 1990, 1991 and 1992, the restrictions on all remaining
shares that are not released in such manner, will be released and the shares
will be delivered to executives in the fifth succeeding calendar year, if and
only if, a total return to shareholders goal, as determined by the executive
compensation committee or the board, is met.
Since the company's total return to shareholders was in the top 10% of returns
posted by comparable utilities during 1990, and in the top 40% of returns
posted during 1991, 1992 and 1993, and since the earnings per share target was
met in 1991, 1992 and 1993, shares were released from escrow and, after with-
holding thereof at the election of such persons to satisfy withholding tax ob-
ligations, were delivered free of all restrictions under the LTIP to the execu-
tives.
In general, restricted shares may not be sold, transferred or pledged until re-
strictions are removed or expire. Purchasers of restricted stock have voting
rights and will receive dividends prior to the time the restrictions lapse if
and to the extent paid on the company's common stock generally.
All shares of restricted stock purchased are placed in escrow. It is antici-
pated that restricted stock would be forfeited and would be resold to the com-
pany at original cost in the event that vesting is not achieved by virtue of
performance or other criteria.
Under the LTIP, all outstanding incentive awards become fully vested and exer-
cisable without restrictions upon the occurrence of one of two events after a
change in control. The first triggering event is the failure of a successor
corporation or its parent or subsidiary to make adequate provision for continu-
ation of the LTIP by substituting new awards. In the second triggering event,
even if adequate provision for continuation of the LTIP and substitution of new
awards has been made, an executive's incentive awards will become vested and
exercisable if the executive is terminated within three years after a change of
control for reasons other than cause, retirement, death or disability, or vol-
untarily terminates employment due to adverse circumstances.
The term change in control includes such significant events as those described
under "Supplemental Executive Retirement Plan." The adverse circumstances al-
lowing such voluntary termination of employment consist of significant and ad-
verse changes in the executive's position, duties, responsibilities or status,
or the reduction or elimination of the executive's compensation or incentive
compensation opportunities.
The LTIP will expire in January 1996, unless terminated by the board prior to
that date. Outstanding incentive awards will not be affected by such expiration
or termination and will vest or be forfeited in accordance with their terms.
PENSION PLAN AND SUPPLEMENTAL EXECUTIVE
RETIREMENT PLAN
PENSION PLAN TABLE
- --------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
CREDITED YEARS OF SERVICE(1)
------------------------------------------------------------
ASSUMED ANNUAL 10 YEARS
COMPENSATION 5 YEARS AND THEREAFTER
- --------------------------------------------------------------------------------
<S> <C> <C>
$100,000 $ 30,000 $ 60,000
200,000 60,000 120,000
300,000 90,000 180,000
400,000 120,000 240,000
500,000 150,000 300,000
600,000 180,000 360,000
700,000 210,000 420,000
800,000 240,000 480,000
</TABLE>
- --------------------------------------------------------------------------------
(1) Credited years of service under the Pension Plan for the five highest paid
executive officers are: T. A. Page, 16 years; J. E. Thomas, 32 years; S. L.
Baum, 9 years; D. E. Felsinger, 21 years; and R. L. Haney, 21 years.
In addition to the Pension Plan, the Supplemental Executive Retirement Plan
(SERP) provides a supplemental retirement benefit for certain executives. The
aggregate monthly benefit payable under the combined Pension Plan and SERP to
an executive who retires at age 62 and has completed at least five years of
service will be a percentage of the executive's final pay equal to 6% times
years of service (up to a maximum of 10 years). Final pay is defined in the
SERP as the monthly base pay rate in effect during the month immediately pre-
ceding retirement, plus 1/12 of the average of the highest three years' gross
bonus awards. Alternatively, the executive may elect to receive a lump sum cash
payment equal to the actuarially determined present value of the monthly bene-
fits. The SERP also provides reduced benefits to executives who retire between
the
9
<PAGE>
- --------------------------------------------------------------------------------
ages of 55 and 61, if the executive has completed at least five years of em-
ployee service. Benefits may be paid also to executives who retire after age
62, if this additional service is rendered at the request of the board.
The above table shows the aggregate annual retirement benefits payable to exec-
utives under the Pension Plan and the SERP, assuming a straight life annuity
form of pension at the normal retirement age of 62 for specified compensation
and years of service. The benefit amounts listed in the table are not subject
to a deduction for Social Security benefits. SERP payments will be reduced by
benefits payable under the Pension Plan.
The SERP, as amended, provides monthly surviving spouse benefits equal to 3% of
an executive's final pay times years of service (up to a maximum of 10 years)
and disability benefits equal to 60% of final pay.
The SERP also provides enhanced benefits to an executive who is adversely af-
fected within three years after the occurrence of an event constituting a
change in control of the company. If during that period an executive is termi-
nated for reasons other than cause, retirement, death or disability or volun-
tarily leaves employment for reasons specified in the SERP, the executive may
elect either to take early retirement, if otherwise qualified to do so, or to
receive a lump sum cash payment equal to the actuarially determined present
value of normal retirement benefits based on ten years of service. Some or all
of the amounts to be paid will be funded out of the cash value of a life insur-
ance policy paid for by the company on behalf of the executive.
The lump sum payment under the SERP is limited. If that payment alone, or when
added together with other payments that the executive has the right to receive
from the company in connection with a change in control of the company, becomes
subject to the excise tax imposed by Section 4999 of the Code, the payment must
be reduced until no such payment is subject to the excise tax. The effect of
this limitation is that total severance payments made to an executive in con-
nection with a change in control of the company may not exceed approximately
2.99 times the executive's average W-2 income for the five years preceding the
change of control.
Certain significant events described in the SERP constitute a change in con-
trol, such as the dissolution of the company, the sale of substantially all the
assets of the company, a merger or the acquisition by one person or group of
the beneficial ownership of more than 25% of the voting power of the company,
coupled with the election of a new majority of the board. A company-initiated
merger in which the company is the surviving entity is not a change in control.
The adverse actions that allow an executive to leave employment voluntarily are
described in the SERP and consist of events such as a significant and adverse
change in the executive's position, duties, responsibilities or status, or the
reduction or elimination of the executive's compensation or incentive compensa-
tion opportunities.
EXECUTIVE SEVERANCE ALLOWANCE PLAN
The company's Executive Severance Allowance Plan (the Executive Severance Plan)
as amended covers officers with one or more years of employee service in lieu
of coverage under the company severance plan for non-officer employees.
The Executive Severance Plan provides two different severance allowances de-
pending upon whether the officer's termination is related to a change in con-
trol of the company. Termination unrelated to a change in control essentially
means a termination due to a reduction in staff, or a termination resulting
from the company's sale of a work unit. The term change in control includes
such significant events as those described under "Supplemental Executive Re-
tirement Plan." If, within three years after a change in control, the officer
is terminated for reasons other than cause, retirement, death or disability, or
leaves employment voluntarily due to adverse actions, the officer is entitled
to a severance allowance. The adverse actions that allow an officer to leave
employment voluntarily are described in the Executive Severance Plan and con-
sist of events such as a significant and adverse change in the officer's posi-
tion, duties, responsibilities or status, or the reduction or elimination by
the company (or its successors) of the officer's compensation or incentive com-
pensation opportunities.
In the event of a termination unrelated to a change in control, officers with
one or more years of employee service, but less than five years of employee
service, will receive a severance allowance consisting of a continuation of
base salary and health and basic life insurance benefits for nine months. Offi-
cers with five or more years of employee service receive a continuation of base
salary and such benefits for 12 months.
The Executive Severance Plan provides that if the length of an officer's sever-
ance allowance is greater under the employees' Severance Plan than under the
Executive Severance Plan, the officer's severance allowance under the Executive
Severance Plan will be for that longer period.
In the event of a termination related to a change in control, the officer will
receive a severance allowance consisting of one year's final pay in a lump sum
payable within five days
10
<PAGE>
- --------------------------------------------------------------------------------
after termination and, at the officer's option, either the continuation of
health and basic life insurance coverage for 12 months or a lump sum payment
equal to the present value of that coverage. Payments pursuant to the Executive
Severance Plan alone, or when combined with compensation from other company
sources made in connection with a change in control of the company, may not ex-
ceed approximately 2.99 times the officer's average W-2 income for the five
years preceding the change in control.
The Executive Severance Plan provides a procedure and a formula to reduce the
total payments to be received by an officer by reason of a change in control if
such total payments would exceed the 2.99 limitation (causing an excise tax to
be due) and if the officer waives receipt of all or a portion of the excess.
Under the formula, an officer's lump sum benefit under the SERP would be first
reduced, if necessary, to zero. It is not anticipated that any reduction under
any other benefit plan would be necessary in the case of any officer.
REPORT OF THE EXECUTIVE COMPENSATION COMMITTEE
The Executive Compensation Committee, which is composed entirely of independent
outside directors, acts on behalf of the board of directors in the interests of
the company's shareholders in formulating policy and administering approved
programs for compensating the company's officers and other senior executives.
The compensation policy of the company, with respect to its executives, is to
provide a total compensation package wherein the mix and total of base salary,
annual incentive and long-term incentive, the composition of its benefit pro-
grams, and the terms and administration of the plans by which such forms of
compensation are determined (1) are structured and administered in the best in-
terests of the company's shareholders, (2) are reasonable in comparison to com-
petitive practice, (3) align the amount of compensation with corporate perfor-
mance, and (4) will continue to motivate and reward on the basis of company and
individual performance. The committee believes that a significant portion of
the total compensation of all executives, and most specifically, the chief ex-
ecutive officer, should be "at risk" and based upon the achievement of measur-
able, superior financial and operational performance.
In discharging its responsibility, the committee, subject to the final approval
of the board, determines the factors and criteria to be used in compensating
the chief executive officer, as well as other executives of the company, and
applies these factors and criteria in administering the various plans and pro-
grams in which these executives participate to ensure they are (1) consistent
with the company's compensation policy, (2) compatible with the company's other
compensation programs and (3) administered in accordance with their terms and
the objectives for which they are intended.
To assist in the performance of the above and to ensure that it is provided
with unbiased, objective input, the committee has retained the services of an
outside independent compensation consulting firm. This firm provides advice to
the committee with respect to the reasonableness of compensation paid to execu-
tives of the company. In doing so, it takes into account and advises the com-
mittee of the compensation practices of, and compensation levels paid by, com-
parable utility companies of similar size and geographic location. These compa-
nies, with the exception of certain gas utilities, are included in the Dow
Jones Utilities Index referenced in the performance graph shown on page 14. The
committee also considers the compensation practices and levels paid by major
non-utility companies located in California. In addition, the committee also
reviews economic and comparative compensation surveys compiled and provided by
the human resources department of the company. The committee believes that by
taking into account the compensation practices of other comparative utilities
as well as major California non-utility companies, it can best determine the
level of compensation necessary to attract, retain and motivate its executives.
While it may rely on such information, the committee is ultimately and solely
responsible for any decisions made or recommended to the board with regard to
the compensation of the company's executives.
The committee has reviewed the compensation of the company's executives and has
determined that their compensation is consistent with the company's policy.
CHAIRMAN, PRESIDENT AND CHIEF EXECUTIVE OFFICER COMPENSATION
- --------------------------------------------------------------------------------
The compensation of the chairman, president and chief executive officer, Mr.
Thomas A. Page, as well as that of the other executives, is directly tied to
the achievement of the corporate goals described below. The base salary of the
chief executive officer, and the other executives, is targeted at the competi-
tive median (50th percentile) for comparably sized utilities and companies.
Pursuant to Mr. Page's employment agreement described on pages 7 and 8, he will
receive a salary of not less than $31,916.66 per month. The chief executive of-
ficer's targeted participation levels are 50% under the EICP and 61% under the
LTIP, of base salary. Actual incentive compensation earned under these two
plans is contingent upon the company's attaining
11
<PAGE>
- --------------------------------------------------------------------------------
performance goals. For the most recent year ended, 60% of the chief executive
officer's total compensation was contingent on the achievement of these quanti-
fiable corporate performance goals. As discussed further below in the EICP and
LTIP sections, these goals include earnings per share, return on equity, mar-
ket-to-book, operating and maintenance expenses, rates, electric reliability,
safety, and customer satisfaction.
Base Salary Compensation
- --------------------------------------------------------------------------------
The base salary component for the chief executive officer and the other execu-
tives is reviewed annually and is based upon the responsibilities of the posi-
tion and the experience of the individual. The committee also takes into ac-
count the base salaries of executives with similar responsibilities at the
above-mentioned companies. Other factors taken into consideration by the com-
mittee are the condition of the local and national economies and the company's
financial and operational health. The individual performance of the specific
executive is also considered. The base salary is gathered and analyzed in order
to determine the appropriate compensation level. While these statistical fac-
tors may warrant one level of pay, more subjective elements such as the condi-
tion of the economy may not support it. As an example, although the company's
performance in 1992 and 1993 exceeded its financial goals, the local economy
remained stagnant. In light of this the chief executive officer and the other
executives received only nominal base salary increases in 1993, and no base
salary increases in 1994, except for those increases solely related to promo-
tions.
Executive Incentive Compensation Plan (EICP)
- --------------------------------------------------------------------------------
Under the EICP, cash payments may be made annually to the company's chief exec-
utive officer and other executives based on a combination of financial and op-
erating performance goals. There are three elements that determine the individ-
ual awards: (1) the executive's base salary, (2) the participation level and
(3) the corporate performance. The participation level is expressed as a per-
centage and is set by the committee based on the executive's duties and level
of responsibility. The amount of the individual award is determined by multi-
plying the executive's base salary by the participation level and then modify-
ing it by the total corporate performance.
The EICP is highly leveraged on the basis of performance. Accordingly, no pay-
ments may be made unless and until the minimum performance levels are exceeded.
Under the terms of the EICP, corporate performance is measured against preset
quantifiable goals approved by the committee at the beginning of the year. A
target and a minimum and maximum performance range are established for each
goal. Financial goals include (1) percent return on shareholders' equity and
(2) the ratio of the company's stock market price to its book value, which is
then compared to other utilities. Operating goals include (1) adherence to the
company's operating budget, (2) rates as compared to the two other major Cali-
fornia electric utilities, (3) customer service satisfaction as measured by
customer surveys, (4) average customer electric outage, and (5) lost-time acci-
dents. The total corporate performance is determined from the degree of
achievement of each of these goals. The committee gives equal weight to the fi-
nancial goals and the operating goals in order to balance shareholder and cus-
tomer interests. This serves to assist the company in reaching its goals of
lowering rates and increasing earnings at the same time.
During 1993, both the minimum and target levels set for the financial goals
(return on equity and market to book) were exceeded; all minimum operating goal
levels were exceeded and all but one of the target levels were exceeded. The
company fell short of achieving its target average customer electric outage
goal. For 1993, the individual awards could not exceed 75% of base salary for
the chief executive officer and the chief operating officer and 60% for other
executives. The EICP compensation component represents 24% of the chief execu-
tive officer's total mix of compensation based upon the targets set under the
EICP and LTIP. The actual amounts earned by each of the company's five highest
compensated executives under the EICP are listed in the Summary Compensation
Table.
Long-Term Incentive Plan (LTIP)
- --------------------------------------------------------------------------------
The Long-Term Incentive Plan was approved by the shareholders in 1986, to pro-
mote the interests of the company and its shareholders. The LTIP was presented
to the shareholders for vote and included the term and number of shares ap-
proved for issue. The LTIP delegates the responsibility of administration and
goal determination to the committee. The LTIP's primary purpose is to enhance
the value of the company to its shareholders by encouraging executives to re-
main with the company and to act and perform to increase the price of the
company's shares and its earnings per share. To accomplish these objectives,
the company sells shares of its stock to its executives at a fixed price of
$2.50 per share. These shares are subject to substantial restrictions on the
rights of the company's executives to benefit fully from such shares unless and
until certain company earnings improvement and continued service requirements
are met. If these requirements or other crite-
12
<PAGE>
- --------------------------------------------------------------------------------
ria are not met, it is anticipated that the executives' rights to such shares
would be forfeited and they would be sold back to the company at their original
purchase price.
All of the company's executives are eligible to participate in the LTIP at var-
ious levels. The number of shares granted is determined by a formula adopted by
the committee, and is calculated as a percentage of base salary. The higher the
salary level, the higher the participation level (or percentage of risk). For
example, in 1993 the chief executive officer participated at 61% of base sala-
ry, making the LTIP equal to 29% of his total mix of compensation. As a compo-
nent of the executives' total compensation package, the LTIP formula is re-
viewed annually. The review takes into consideration that the value of such
shares, at the time of grant, has been determined to be consistent with the
size of grants made to executives in similar positions in the above-mentioned
companies. Other factors accounted for are LTIP goals, current share ownership
and current participation levels.
The number of restricted shares sold to the company's five highest-compensated
executives in 1993, pursuant to the LTIP, is shown in the Long-Term Incentive
Plan Table. The goals for restricted shares sold in 1993 are based on the
achievement of increased earnings per share. The goals set for previous years
and the achievement of those goals are outlined in the section titled "1986
Long-Term Incentive Plan" above.
Revenue Reconciliation Act of 1993
- --------------------------------------------------------------------------------
This recently enacted legislation amends Section 162 (m) of the Internal Reve-
nue Code to limit the deductibility of most forms of compensation, over
$1,000,000, paid to top executives of publicly held corporations. The committee
believes that the LTIP is a performance goal plan and therefore, under the IRC
Section 162 (m) transition rules, is not subject to limitations on compensation
deductibility. In determining the compensation of the company's executives, the
committee will take those steps necessary to preserve the deductibility of com-
pensation paid.
The report is submitted by the Executive Compensation Committee:
Catherine Fitzgerald Wiggs, Chair
Robert H. Goldsmith
13
<PAGE>
- --------------------------------------------------------------------------------
Comparative Common Stock Performance
- --------------------------------------------------------------------------------
The following graph compares the percentage change in the company's cumulative
total shareholder return on common stock over the last five fiscal years with
the performances of the Standard & Poor's 500 Index and the Dow Jones Utilities
Index over the same period. The returns were calculated assuming the investment
in the company's common stock, the S&P 500, and the Dow Jones Utilities Index
on December 31, 1988, and reinvestment of all dividends.
COMPARISON OF FIVE-YEAR CUMULATIVE TOTAL RETURN AMONG SAN DIEGO
GAS & ELECTRIC COMPANY, S&P 500 INDEX AND DOW JONES UTILITES INDEX
PERFORMANCE GRAPH APPEARS HERE
<TABLE>
<CAPTION>
SAN DIEGO DOW JONES
Measurement Period GAS & ELECTRIC S&P UTILITIES
(Fiscal Year Covered) COMPANY 500 INDEX INDEX
- ------------------- -------------- --------- ---------
<S> <C> <C> <C>
Measurement Pt-12/31/1988 $100 $100 $100
FYE 12/31/1989 $125.98 $131.69 $135.33
FYE 12/31/1990 $133.40 $127.60 $129.21
FYE 12/31/1991 $143.29 $166.47 $148.71
FYE 12/31/1992 $162.00 $179.15 $154.68
FYE 12/31/1993 $177.72 $197.21 $169.51
</TABLE>
(A) Calculations for the S&P 500 Index were performed by Standard & Poor's
Compustat Services, Inc.
(B) The Dow Jones Utilities Index (consisting of 11 electric utilities and four
gas utilities) is maintained by Dow Jones & Company, Inc. and reported
daily in The Wall Street Journal.
(C) At December 31, 1988 and through May 1991 the company was involved in
merger negotiations and company stock was trading at inflated prices. The
company estimates that, absent the merger negotiations, the cumulative to-
tal shareholder return on common stock over the last five fiscal years
would have been $211.
14
<PAGE>
- --------------------------------------------------------------------------------
Other Business to be Brought
Before the Meeting
- --------------------------------------------------------------------------------
The board of directors does not know of any matters that will be presented for
action at the meeting other than the matters described above. However, if any
other matters properly come before the meeting, the holders of proxies solic-
ited by the board of directors will vote on those matters in accordance with
their judgment, and discretionary authority to do so is included in the proxy.
Relationship with Independent
Public Accountant
- --------------------------------------------------------------------------------
The firm of Deloitte & Touche acted as the company's independent auditor for
the year 1993. Deloitte & Touche (or its predecessor firm, Deloitte Haskins &
Sells) has been employed regularly by the company for many years to audit its
financial statements and for other purposes. Representatives of Deloitte & Tou-
che are expected to be present at the annual meeting of shareholders. They will
have the opportunity to make a statement, if they so desire, and will respond
to appropriate questions from shareholders. There has been no disagreement be-
tween the company and Deloitte & Touche on any matter of accounting principles
or practices or financial statement disclosure.
Annual Report
- --------------------------------------------------------------------------------
The company's 1993 Annual Report to Shareholders accompanies this proxy state-
ment. Copies of the company's Annual Report to the Securities and Exchange Com-
mission on Form 10-K will be provided to shareholders, without charge, upon
written request to N. A. Peterson, Senior Vice President, General Counsel and
Secretary, San Diego Gas & Electric Company, P.O. Box 1831, San Diego, Califor-
nia 92112-4150.
Shareholder Proposals for
1995 Annual Meeting
- --------------------------------------------------------------------------------
Proposals that shareholders may wish to have included in the proxy materials
relating to the next annual meeting must be received by the company by November
7, 1994.
Proxy Solicitations
- --------------------------------------------------------------------------------
Proxy solicitations, other than by mail, may be made personally or by telephone
by not more than three employees of the company, for which the expense will be
nominal. The company will reimburse brokerage firms and other securities' cus-
todians for reasonable expenses incurred by them in forwarding proxy material
to beneficial owners of stock.
In addition, the company has retained Georgeson & Co., Inc., a proxy solicita-
tion firm, to assist in the solicitation of proxies at an estimated cost of
$12,000 plus disbursements. All costs associated with this solicitation will be
borne by the company.
By order of the board of directors
N. A. Peterson
Senior Vice President,
General Counsel and Secretary
San Diego, California
March 8, 1994
15
<PAGE>
GRAPHIC MATERIAL CROSS-REFERENCE PAGE
ARTWORK DESCRIBING MEETING DATE WITH COMPANY LOGO ON THE COVER
PHOTOS OF THE NOMINEES FOR DIRECTORS APPEAR ON PAGES 2, 3 AND 4.
A PERFORMANCE GRAPH SHOWING A COMPARISON OF FIVE YEAR CUMULATIVE RETURN AMONG
SDG&E, DOW JONES UTILITIES INDEX AND S&P 500 INDEX APPEARS ON PAGE 14.
<PAGE>
PROXY SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
- --------------------------------------------------------------------------------
SAN DIEGO GAS & ELECTRIC COMPANY Post Office Box 1831 San Diego,
California 92112-4150
- --------------------------------------------------------------------------------
PROXY FOR ANNUAL MEETING OF SHAREHOLDERS--APRIL 26, 1994
DANIEL W. DERBES, RALPH 1. ELECTION OF DIRECTORS NOMINEES: R.C. ATKINSON, A.
R. OCAMPO AND THOMAS A. BURR, R.A. COLLATO, D.W. DERBES, R.H. GOLDSMITH,
PAGE, JOINTLY OR R.R. OCAMPO, T.A. PAGE, C. FITZGERALD WIGGS
INDIVIDUALLY, ARE
HEREBY APPOINTED AS [_] FOR ALL NOMINEES LISTED ABOVE
PROXIES WITH FULL POWER [_] WITHHELD FROM ALL NOMINEES
OF SUBSTITUTION TO [_] WITHHELD FROM FOLLOWING NOMINEES (IF ANY):
REPRESENT AND VOTE ALL
SHARES OF STOCK OF THE -------------------------------------
UNDERSIGNED 2. IN THEIR DISCRETION, ACT UPON OTHER MATTERS AS MAY
SHAREHOLDER(S) OF PROPERLY COME BEFORE THE MEETING.
RECORD ON MARCH 1,
1994, AT THE ANNUAL (Continued on other side)
MEETING OF SHAREHOLDERS
OF SAN DIEGO GAS &
ELECTRIC COMPANY, TO BE
HELD AT THE SAN DIEGO
CONVENTION CENTER, 111
WEST HARBOR DRIVE,
BALLROOM SECTION 6A,
SAN DIEGO, CALIFORNIA
ON APRIL 26, 1994, OR
AT ANY ADJOURNMENT
THEREOF, AS INDICATED.
(Continued from other side)
A THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED IN THE MANNER DIRECTED
HEREIN BY THE UNDERSIGNED SHAREHOLDER(S). IF NO DIRECTION IS MADE, THIS
PROXY WILL BE VOTED FOR ALL ITEM 1 NOMINEES.
PLEASE SIGN EXACTLY AS NAME APPEARS BELOW. IF SIGNING AS EXECUTOR,
ADMINISTRATOR, ATTORNEY, AGENT, TRUSTEE OR GUARDIAN, PLEASE GIVE FULL
TITLE AS SUCH. IF A CORPORATION OR PARTNERSHIP, PLEASE SIGN IN FULL
SUCH NAME BY AUTHORIZED PERSON.
, 1994
-----------------------------
DATED
-----------------------------
SIGNATURE
-----------------------------
SIGNATURE (if held jointly)
WHETHER OR NOT YOU EXPECT TO
ATTEND THE MEETING PLEASE
MARK, SIGN, DATE AND RETURN
THE PROXY CARD PROMPTLY IN
THE ENCLOSED POSTAGE-PAID
ENVELOPE.
PLEASE INDICATE ANY CHANGE IN ABOVE ADDRESS
