<DOCUMENT>
<TYPE>EX-10
<SEQUENCE>4
<FILENAME>amended98ltip_ex10.txt
<DESCRIPTION>EX. 10.2 AMENDED 1998 LONG-TERM INCENTIVE PLAN
<TEXT>
                                                      Exhibit 10.2
                        Sempra Energy
                1998 Long Term Incentive Plan
 
        1.   Purpose.   The purposes of the Sempra Energy 1998 Long Term
Incentive Plan (the ''Plan'') are to attract, retain and motivate
officers and other key employees of SEMPRA ENERGY, a California
corporation (the ''Company''), and its Subsidiaries (as hereinafter
defined), to compensate them for their contributions to the growth and
profits of the Company and to encourage ownership by them of stock of
the Company.
 
        2.   Definitions.   For purposes of the Plan, the following terms
shall be defined as follows:
 
        ''Administrator'' means the individual or individuals to whom the
Committee delegates authority under the Plan in accordance with
Section 3(d).
 
        ''Affiliate'' and ''Associate'' have the respective meanings
ascribed to such terms in Rule l2b-2 promulgated under the Exchange
Act.
 
        ''Award'' means an award made pursuant to the terms of the Plan
to an Eligible Individual in the form of Stock Options, Stock
Appreciation Rights, Restricted Stock Awards, Restricted Stock
Units, Performance Share Awards, Stock Awards, Section 162(m)
Awards, dividend equivalents or other awards determined by the
Committee.
 
        ''Award Agreement'' means a written agreement or certificate
granting an Award. An Award Agreement shall be executed by an
officer on behalf of the Company and shall contain such terms and
conditions as the Committee deems appropriate and that are not
inconsistent with the terms of the Plan. The Committee may, in its
discretion, require that an Award Agreement be executed by the
Participant to whom the relevant Award is made.
 
        ''Beneficial Owner'' has the meaning set forth in Rule 13d-3
under the Exchange Act.
 
        ''Board'' means the Board of Directors of the Company.
 
        A ''Change in Control'' of the Company shall be deemed to have
occurred when:
 
        (i) Any Person is or becomes the Beneficial Owner, directly
or indirectly, of securities of the Company representing twenty
percent (20%) or more of the combined voting power of the
Company's then outstanding securities; or
 
        (ii) The following individuals cease for any reason to
constitute a majority of the number of directors then serving:
individuals who, on the Effective Date, constitute the Board and
any new director (other than a director whose initial assumption
of office is in connection with an actual or threatened election
contest, including, but not limited to, a consent solicitation,
relating to the election of directors of the Company) whose
appointment or election by the Board or nomination for election
by the Company's shareholders was approved or recommended by a
vote of at least two-thirds (2/3) of the directors then still in
office who either were directors on the date hereof or whose
appointment, election or nomination for election was previously
so approved or recommended; or
 
        (iii) There is consummated a merger or consolidation of the
Company or any direct or indirect subsidiary of the Company with
any other corporation, other than (A) a merger or consolidation
which would result in the voting securities of the Company
outstanding immediately prior to such merger or consolidation
continuing to represent (either by remaining outstanding or by
being converted into voting securities of the surviving entity or
any parent thereof), in combination with the ownership of any
trustee or other fiduciary holding securities under an employee
benefit plan of the Company or any subsidiary of the Company, at
least sixty percent (60%) of the combined voting power of the
securities of the Company or such surviving entity or any parent
thereof outstanding immediately after such merger or
consolidation, or (B) a merger or consolidation effected to
implement a recapitalization of the Company (or similar
transaction) in which no Person is or becomes the beneficial
owner, directly or indirectly, of securities of the Company (not
including in the securities beneficially owned by such Person any
securities acquired directly from the Company or its affiliates
other than in connection with the securities acquired directly
from the Company or its affiliates other than in connection with
the acquisition by the Company or its affiliates of a business)
representing twenty percent (20%) or more of the combined voting
power of the Company's then outstanding securities; or
 
        (iv) The shareholders of the Company approve a plan of
complete liquidation or dissolution of the Company or there is
consummated an agreement for the sale or disposition by the
company of all or substantially all of the Company's assets,
other than a sale or disposition by the Company of all or
substantially all of the Company's assets to an entity, at least
sixty percent (60%) of the combined voting power of the voting
securities of which are owned by shareholders of the Company in
substantially the same proportions as their ownership of the
Company immediately prior to such sale.
 
        ''Code'' means the Internal Revenue Code of 1986, as amended, and
the applicable rulings and regulations thereunder.
 
        ''Committee'' means the Compensation Committee of the Board, any
successor committee thereto or any other committee appointed by the
Board to administer the Plan.
 
        ''Common Stock'' means the common stock, with no par value, of
the Company.
 
        ''Eligible Individuals'' means the individuals described in
Section 6 who are eligible to receive Awards under the Plan.
 
        ''Exchange Act'' means the Securities Exchange Act of 1934, as
amended, and the applicable rulings and regulations thereunder.
 
        ''Fair Market Value'' means, in the event that the Common Stock
is traded on a recognized securities exchange, the closing price of
the Common Stock on the date set for valuation, or in the event that
the Common Stock is quoted by the National Association of Securities
Dealers Automated Quotations on National Market Issues system, an
amount equal to the average of the high and low prices of the Common
Stock on such quotations system on the date set for valuation or, if
no sales of Common Stock were made on said exchange or so quoted
such system on that date, the average of the high and low prices of
the Common Stock on the next preceding day on which sales were made
on such exchange or quotations system; or, if the Common Stock is
not so traded or quoted, that value determined, in its sole
discretion, by the Committee.
 
        ''Incentive Stock Option'' means a Stock Option which is an
''incentive stock option'' within the meaning of Section 422 of the
Code and designated by the Committee as an Incentive Stock Option in
an Award Agreement.
 
        ''Nonqualified Stock Option'' means a Stock Option which is not
an Incentive Stock Option.
 
        ''Parent'' means any corporation which is a ''parent
corporation'' within the meaning of Section 424(e) of the Code with
respect to the relevant entity.
 
        ''Participant'' means an Eligible Individual to whom an Award has
been granted under the Plan.
 
        ''Performance Period'' means a fiscal year of the Company or such
other period that may be specified by the Committee in connection
with the grant of a Section 162(m) Award.
 
        ''Performance Share Award'' means a conditional Award of shares
of Common Stock granted to an Eligible Individual pursuant to
Section 12 hereof.
 
        ''Person'' means any person, entity or ''group'' within the
meaning of Section 13(d)(3) or Section14(d)(2) of the Exchange Act,
except that such term shall not include (i) the Company or any of
its Subsidiaries, (ii) a trustee or other fiduciary holding
securities under an employee benefit plan of the Company or any of
its Affiliates, (iii) an underwriter temporarily holding securities
pursuant to an offering of such securities, (iv) a corporation
owned, directly or indirectly, by the shareholders of the Company in
substantially the same proportions as their ownership of stock of
the Company, or (v) a person or group as used in Rule 13dl(b) under
the Exchange Act.
 
        ''Restricted Stock Award'' means an Award of restricted shares of
Common Stock granted to an Eligible Individual pursuant to Section
10 hereof.
 
        ''Restricted Stock Units'' means an Award of restricted share
units as described in Section 11 hereof.
 
        ''Section 162(m) Participant'' means, for a given fiscal year of
the Company, any Participant who is a ''covered employee'' within
the meaning of the regulations promulgated under Section 162(m) of
the Code.
 
        ''Stock Appreciation Right'' means an Award to receive all or
some portion of the appreciation on shares of Common Stock granted
to an Eligible Individual pursuant to Section 9 hereof.
 
        ''Stock Award'' means an Award of shares of Common Stock granted
to an Eligible Individual pursuant to Section 13 hereof.
 
        ''Stock Option'' means an option to purchase shares of Common
Stock granted to an Eligible Individual pursuant to Section 8
hereof.
 
        ''Subsidiary'' means (i) any majority-owned subsidiary of the
Company and (ii) any other corporation or other entity in which the
Company, directly or indirectly, has an equity or similar interest
and which the Committee designates as a Subsidiary for the purposes
of the Plan.
 
        ''Substitute Award'' means an Award granted upon assumption of,
or in substitution for, outstanding equity awards previously granted
by a company or other entity in connection with a corporate
transaction, such as a merger, combination, consolidation or
acquisition of property or stock; provided, however, that in no
event shall the term ''Substitute Award'' be construed to refer to
an award made in connection with a cancellation and repricing of a
Stock Option.
 
        3.   Administration of the Plan.
 
        (a)  Power and Authority of the Committee.   The Plan shall be
administered by the Committee, which shall have full power and
authority, subject to the express provisions hereof:
 
        (i) to select Participants from among the Eligible
Individuals;
 
        (ii) to grant Awards in accordance with the terms of the
Plan;
 
        (iii) to determine the number of shares of Common Stock
subject to each Award or the cash amount payable in connection
with an Award;
 
        (iv) to determine the terms and conditions of each Award,
including, without limitation, those related to vesting,
forfeiture, payment and exercisability, and the effect, if any,
of a Participant's termination of employment with the Company or,
subject to Section 19 hereof, of a Change in Control on the
outstanding Awards granted to such Participant, and including the
authority to amend the terms and conditions of an Award after the
granting thereof to a Participant in a manner that is not
prejudicial to the rights of such Participant;
 
        (v) to accelerate the vesting or payment of any Award, the
lapse of restrictions on any Award or the date on which any Stock
Option or Stock Appreciation Right becomes exercisable;
 
        (vi) to specify and approve the provisions of the Award
Agreements delivered to Participants in connection with their
Awards;
 
        (vii) to construe and interpret any Award Agreement delivered
under the Plan;
 
        (viii) subject to Section 20, to prescribe, amend and rescind
administrative rules and procedures relating to the Plan;
 
        (ix) to vary the terms of Awards to take account of tax,
securities law and other regulatory requirements, including those
of foreign jurisdictions;
 
        (x) subject to the provisions of the Plan and subject to such
additional limitations and restrictions as the Committee may
impose, to delegate to one or more officers of the Company some
or all of its authority under the Plan; and
 
        (xi) to make all other determinations and to formulate such
procedures as may be necessary or advisable for the
administration of the Plan.
 
        (b)   Plan Construction and Interpretation.   The Committee shall
have full power and authority, subject to the express provisions
hereof, to construe and interpret the terms of the Plan and any
Award Agreement entered into hereunder.
 
        (c)   Determinations of Committee Final and Binding.   All
determinations by the Committee in carrying out and administering
the Plan and in construing and interpreting the Plan and any Award
Agreement shall be final, binding and conclusive for all purposes
and upon all persons interested herein.
 
        (d)   Delegation of Authority.   The Committee may, but need not,
from time to time delegate some or all of its authority under the
Plan to an Administrator consisting of one or more members of the
Committee or of one or more officers of the Company; provided,
however, that the Committee may not delegate its authority (i) to
grant Awards to Eligible Individuals (A) who are subject on the date
of the grant to the reporting rules under Section 16(a) of the
Exchange Act, (B) who are Section 162(m) Participants or (C) who are
officers of the Company who are delegated authority by the Committee
hereunder, or (ii) under Sections 3(b) and 20 of the Plan. Any
delegation hereunder shall be subject to the restrictions and limits
that the Committee specifies at the time of such delegation or
thereafter. Nothing in the Plan shall be construed as obligating the
Committee to delegate authority to an Administrator, and the
Committee may at any time rescind the authority delegated to an
Administrator appointed hereunder or appoint a new Administrator.
At all times, the Administrator appointed under this Section 3(d)
shall serve in such capacity at the pleasure of the Committee. Any
action undertaken by the Administrator in accordance with the
Committee's delegation of authority shall have the same force and
effect as if undertaken directly by the Committee, and any reference
in the Plan to the Committee shall, to the extent consistent with
the terms and limitations of such delegation, be deemed to include a
reference to the Administrator.
 
        (e)   Liability of Committee.   No member of the Committee shall
be liable for anything whatsoever in connection with the
administration of the Plan except such person's own willful
misconduct. Under no circumstances shall any member of the Committee
be liable for any act or omission of any other member of the
Committee. In the performance of its functions with respect to the
Plan, the Committee shall be entitled to rely upon information and
advice furnished by the Company's officers, the Company's
accountants, the Company's counsel and any other party the Committee
deems necessary, and no member of the Committee shall be liable for
any action taken or not taken in reliance upon any such advice.
 
        4.   Duration of Plan.   The Plan shall remain in effect until it is
terminated by the Board of Directors (upon which Board action no
further awards may be granted hereunder) and thereafter until all
Awards previously granted under the Plan are satisfied by the issuance
of shares of Common Stock or the payment of cash or are terminated
under the terms of the Plan or under the Award Agreements entered into
in connection with the grant thereof. Notwithstanding the foregoing,
the Plan shall automatically terminate unless it is ratified by the
Company's shareholders every ten years following the Effective Date (as
defined in Section 21 (j)).
 
        5.   Shares of Stock Subject to the Plan.   Subject to adjustment as
provided in Section 15(b) hereof, the number of shares of Common Stock
that may be granted under the Plan pursuant to Awards during each full
calendar year that the Plan is in effect shall not exceed, in the
aggregate, 1.5 % of the outstanding shares of Common Stock as of the
first day of the calendar year (the ''Section 5 Limit'').
Notwithstanding the foregoing, the number of shares of Common Stock
available for grant under the Plan during the 1998 calendar year shall
be 3.4 million shares. Such shares may be either authorized but
unissued shares, treasury shares or any combination thereof. For
purposes of determining the number of shares that remain available for
issuance under the Plan, the following rules shall apply:
 
        (a) the number of Shares subject to outstanding Awards shall be
charged against the Section 5 Limit; and
 
        (b) the Section 5 Limit shall be increased by:
 
        (i) the number of shares subject to an Award (or portion
thereof) which lapses, expires or is otherwise terminated without
the issuance of such shares or is settled by the delivery of
consideration other than shares;
 
        (ii) the number of shares tendered to pay the exercise price
of a Stock Option or other Award;
 
        (iii) the number of shares withheld from any Award to satisfy
a Participant's tax withholding obligations or, if applicable, to
pay the exercise price of a Stock Option or other Award; and
 
        (iv) the number of shares that were not made subject to
Awards during the previous year.
 
        In addition, any shares underlying Substitute Awards shall not be
counted against the Section 5 Limit set forth in the first sentence
of this Section 5.
 
   6.   Eligible Individuals.
 
        (a)   Eligibility Criteria.   Awards may be granted by the
Committee to individuals (''Eligible Individuals'') who are officers
or other key employees of the Company or a Subsidiary with the
potential to contribute to the future success of the Company or its
Subsidiaries and have a significant effect on the Company's growth
and profitability. Members of the Committee shall not be eligible to
receive Awards under the Plan. An individual's status as an
Administrator will not affect his or her eligibility to participate
in the Plan.
 
        (b)   Maximum Number of Shares Per Eligible Individual.   In
accordance with the requirements imposed under Section 162(m) of the
Code, no Eligible Individual shall receive grants of Awards with
respect to an aggregate of more than 1,000,000 shares of Common
Stock in respect of any fiscal year of the Company.
 
        7.   Awards Generally.   Awards under the Plan may consist of Stock
Options, Stock Appreciation Rights, Restricted Stock Awards,
Performance Share Awards, Section 162(m) Awards or other awards
determined by the Committee. The terms and provisions of an Award shall
be set forth in a written Award Agreement that is approved by the
Committee and delivered or made available to the Participant as soon as
practicable following the date of the Award. The vesting,
exercisability, payment and other restrictions applicable to an Award
(which may include, without limitation, restrictions on transferability
or provision for mandatory resale to the Company) shall be determined
by the Committee and set forth in the applicable Award Agreement.
Notwithstanding the foregoing, the Committee may accelerate (i) the
vesting or payment of any Award, (ii) the lapse of restrictions on any
Award or (iii) the date on which any Option or Stock Appreciation Right
first becomes exercisable. The Committee shall also have full authority
to determine and specify in the applicable Award Agreement the effect,
if any, that a Participant's termination of employment for any reason
will have on the vesting, exercisability, payment or lapse of
restrictions applicable to an outstanding Award. The date of a
Participant's termination of employment for any reason shall be
determined in the sole discretion of the Committee.
 
        8.   Stock Options.
 
        (a)   Terms of Stock Options Generally.   Subject to the terms of
the Plan and the applicable Award Agreement, each Stock Option shall
entitle the Participant to whom such Stock Option was granted to
purchase the number of shares of Common Stock specified in the
applicable Award Agreement and shall be subject to the terms and
conditions established by the Committee in connection with the Stock
Option and specified in the applicable Award Agreement. Upon
satisfaction of the conditions to exercisability specified in the
applicable Award Agreement, a Participant shall be entitled to
exercise the Stock Option in whole or in part and to receive, upon
satisfaction or payment of the exercise price or an irrevocable
notice of exercise in the manner contemplated by Section 8(d) below,
the number of shares of Common Stock in respect of which the Stock
Option shall have been exercised. Stock Options may be either
Nonqualified Stock Options or Incentive Stock Options; provided,
however, that in no event shall the number of shares of Common Stock
that may be granted under the Plan pursuant to Incentive Stock
Options exceed, in the aggregate, 1,000,000 shares.
 
        (b)   Exercise Price.   The exercise price per share of Common
Stock purchasable under a Stock Option shall be determined by the
Committee at the time of grant and set forth in the Award Agreement,
provided, that the exercise price per share of a Stock Option shall
be no less than 100% of the Fair Market Value per share on the date
of grant and such exercise price shall not thereafter be reduced
(other than adjustments pursuant to Section 18(b) to reflect changes
in outstanding Common Stock and the conversion of outstanding Stock
Options into Replacement Options pursuant to Section 19 in the event
of a Change in Control) by amendment, cancellation and regrant or
substitution of Stock Options or otherwise. Notwithstanding the
foregoing, the exercise price per share of a Stock Option that is a
Substitute Award may be less than the Fair Market Value per share on
the date of grant, provided that the excess of:
 
        (i) the aggregate Fair Market Value (as of the date such
Substitute Award is granted) of the shares subject to the
Substitute Award; over
 
        (ii) the aggregate exercise price thereof;
 
does not exceed the excess of:
 
        (iii)  the aggregate fair market value (as of the time
immediately preceding the transaction giving rise to the
Substitute Award, such fair market value to be determined by the
Committee) of the shares of the predecessor entity that were
subject to the grant assumed or substituted for by the Company;
over
 
        (iv) the aggregate exercise price of such shares.
 
        (c)   Option Term.   The term of each Stock Option shall be fixed
by the Committee and set forth in the Award Agreement; provided,
however, that a Stock Option that is an Incentive Stock Option shall
not be exercisable after the expiration of ten (10) years after the
date the Stock Option is granted.
 
        (d)   Method of Exercise.   Subject to the provisions of the
applicable Award Agreement, the exercise price of a Stock Option may
be paid in cash or previously owned shares or a combination thereof
and, if the applicable Award Agreement so provides, in whole or in
part through the withholding of shares subject to the Stock Option
with a Fair Market Value equal to the exercise price. In accordance
with the rules and procedures established by the Committee for this
purpose, the Stock Option may also be exercised through a ''cashless
exercise'' procedure approved by the Committee involving a broker or
dealer approved by the Committee, that affords Participants the
opportunity to sell immediately some or all of the shares underlying
the exercised portion of the Stock Option in order to generate
sufficient cash to pay the Stock Option exercise price and/or to
satisfy withholding tax obligations related to the Stock Option.
 
        (e)   Deferral.   In accordance with rules and procedures
established by the Committee, the Committee may permit a Participant
at or after the time of grant to defer receipt of the Common Stock
underlying a Stock Option to one or more dates elected by the
Participant, subsequent to the date on which such Stock Option is
exercised. Shares that are deferred in accordance with the preceding
sentence shall be noted in a bookkeeping account maintained by the
Company for this purpose and may periodically be credited with
dividends, dividend equivalents, notional interest or earnings in
accordance with procedures established by the Committee in its
discretion from time to time. Deferred amounts shall be paid in
cash, Common Stock or other property, as determined by the Committee
at or after the time of deferral, on the date or dates elected by
the Participant.
 
        9.   Stock Appreciation Rights.   Stock Appreciation Rights shall be
subject to the terms and conditions established by the Committee in
connection with the Award thereof and specified in the applicable Award
Agreement. Upon satisfaction of the conditions to the payment specified
in the applicable Award Agreement, each Stock Appreciation Right shall
entitle a Participant to an amount, if any, equal to the Fair Market
Value of a share of Common Stock on the date of exercise over the Stock
Appreciation Right exercise price specified in the applicable Award
Agreement. At the discretion of the Committee, payments to a
Participant upon exercise of a Stock Appreciation Right may be made in
shares of Common Stock, cash or a combination thereof. A Stock
Appreciation Right may be granted alone or in addition to other Awards,
or in tandem with a Stock Option. If granted in tandem with a Stock
Option, a Stock Appreciation Right shall cover the same number of
shares of Common Stock as covered by the Stock Option (or such lesser
number of shares as the Committee may determine) and shall be
exercisable only at such time or times and to the extent the related
Stock Option shall be exercisable, and shall have the same term and
exercise price as the related Stock Option.  Upon exercise of a Stock
Appreciation Right granted in tandem with a Stock Option, the related
Stock Option shall be canceled automatically to the extent of the
number of shares covered by such exercise; conversely, if the related
Stock Option is exercised as to some or all of the shares covered by
the tandem grant, the tandem Stock Appreciation Right shall be canceled
automatically to the extent of the number of shares covered by the
Stock Option exercised.
 
        10.   Restricted Stock Awards.   Restricted Stock Awards shall
consist of one or more shares of Common Stock granted to an Eligible
Individual, and shall be subject to the terms and conditions
established by the Committee in connection with the Award and specified
in the applicable Award Agreement. The shares of Common Stock subject
to a Restricted Stock Award may, among other things, be subject to
vesting requirements or restrictions on transferability. Except as
otherwise provided by the Committee in its sole discretion, a
Participant shall have all of the rights of a shareholder of the
Company with respect to the shares of Common Stock underlying a
Restricted Stock Award, including the right to vote the shares and the
right to receive any cash dividends. Stock dividends issued with
respect to shares covered by a Restricted Stock Award shall be treated
as additional shares under the Restricted Stock Award and shall be
subject to the same terms and conditions that apply to the shares with
respect to which such dividends are issued. In no event shall the
number of shares of Common Stock granted in any calendar year under the
Plan in respect of Restricted Stock Awards exceed .5 % of the
outstanding shares of Common Stock as of the first day of the calendar
year. Notwithstanding the foregoing, the number of shares of Common
Stock available for Restricted Stock Awards under the Plan during the
1998 calendar year shall not exceed 1.1 million shares.
 
        11.   Restricted Stock Units.   Restricted Stock Unit Awards shall
consist of a grant of units, each of which represents the right of the
Participant to receive one share of Common Stock, subject to the terms
and conditions established by the Committee in connection with the
Award and set forth in the applicable Award Agreement. Upon
satisfaction of the conditions to vesting and payment specified in the
applicable Award Agreement, Restricted Stock Units shall be payable, at
the discretion of the Committee, in Common Stock, in cash equal to the
Fair Market Value of the shares subject to such Restricted Stock Units,
or in a combination of Common Stock and cash.
 
        12.   Performance Share Awards.   Performance Share Awards shall be
evidenced by an Award Agreement in such form and containing such terms
and conditions as the Committee deems appropriate and which are not
inconsistent with the terms of the Plan. Each Award Agreement shall set
forth the number of shares of Common Stock to be earned by a
Participant upon satisfaction of certain specified performance criteria
and subject to such other terms and conditions as the Committee deems
appropriate. Payment in settlement of a Performance Share Award shall
be made as soon as practicable following the conclusion of the
applicable performance period, or at such other time as the Committee
shall determine, in shares of Common Stock, in an equivalent amount of
cash or in a combination of Common Stock and cash, as the Committee
shall determine.
 
        13.   Stock Awards.   Stock Awards shall consist of one or more
shares of Common Stock granted to an Eligible Individual, and shall be
subject to the terms and conditions established by the Committee in
connection with the Award and specified in the applicable Award
Agreement. The shares of Common Stock subject to a Stock Award may,
among other things, be subject to vesting requirements and restrictions
on transferability.
 
        14.   Other Awards.   The Committee shall have the authority to
specify the terms and provisions of other forms of equity-based or
equity-related Awards not described above which the Committee
determines to be consistent with the purpose of the Plan and the
interests of the Company, which Awards may provide for cash payments
based in whole or in part on the value or future value of Common Stock,
for the acquisition or future acquisition of Common Stock, or any
combination thereof.
 
        15.   Section 162(m) Awards.
 
        (a)   Terms of Section 162(m) Awards Generally.   In addition to
any other Awards under the Plan, the Company may make Awards that
are intended to qualify as ''qualified performance-based
compensation'' for purposes of Section 162(m) of the Code (''Section
162(m) Award''). Section 162(m) Awards may consist of Stock Options,
Stock Appreciation Rights, Restricted Stock Awards, Restricted Stock
Units, Performance Share Awards or Other Awards the vesting,
exercisability and/or payment of which is conditioned upon the
attainment for the applicable Performance Period of specified
performance targets related to designated performance goals for such
period selected by the Committee from among the performance goals
specified in Section 15(b) below. Section 162(m) Awards will be made
in accordance with the procedures specified in applicable Treasury
regulations for compensation intended to be ''qualified performance-
based compensation. ''
 
        (b)   Performance Goals.   For purposes of this Section 15,
performance goals shall be limited to one or more of the following:
(i) net revenue; (ii) net earnings; (iii) operating earnings or
income; (iv) absolute and/or relative return on equity or assets;
(v) earnings per share; (vi) cash flow; (vii) pretax profits; (viii)
earnings growth; (ix) revenue growth; (x) book value per share; (xi)
stock price; (xii) economic value added; (xiii) total shareholder
return; (xiv) operating goals (including, but not limited to,
safety, reliability, maintenance expenses, capital expenses,
customer satisfaction and employee satisfaction); and (xv)
performance relative to peer companies, each of which may be
established on a corporate-wide basis or established with respect to
one or more operating units, divisions, acquired businesses,
minority investments, partnerships or joint ventures.
 
        (c)   Other Performance-Based Compensation.   The Committee's
decision to make, or not to make, Section 162(m) Awards within the
meaning of this Section 15 shall not in any way prejudice the
qualification of any other Awards as performance-based compensation
under Section 162(m). In particular, Awards of Stock Options may,
pursuant to applicable regulations promulgated under Section 162(m),
be qualified as performance-based compensation for Section 162(m)
purposes without regard to this Section 15.
 
        16.   Dividend Equivalents.   The Committee may provide that Awards
under the Plan earn dividend equivalents. Such dividend equivalents may
be paid currently or may be deferred and deemed reinvested in Common
Stock in the same manner as dividends reinvested pursuant to the terms
of the Sempra Dividend Reinvestment Plan. Any deferral of dividend
equivalents shall be subject to such restrictions and conditions as the
Committee may determine in its discretion, including, but not limited
to, performance-based vesting requirements.
 
        17.   Non-transferability.   No Award granted under the Plan or any
rights or interests therein shall be sold, transferred, assigned,
pledged or otherwise encumbered or disposed of except by will or by the
laws of descent and distribution or pursuant to a ''qualified domestic
relations order'' (''QDRO'') as defined in the Code or Title I of the
Employee Retirement Income Security Act of 1974, as amended, and the
rules and regulations thereunder; provided, however, that the Committee
may, subject to such terms and conditions as the Committee shall
specify, permit the transfer of an Award to a Participant's family
members or to one or more trusts or partnerships established in whole
or in part for the benefit of one or more of such family members;
provided further, however, that the restrictions set forth in this
sentence shall not apply to the shares received in connection with an
Award after the date that the restrictions on transferability of such
shares set forth in the applicable Award Agreement have lapsed. During
the lifetime of a Participant, a Stock Option or Stock Appreciation
Right shall be exercisable only by, and payments in settlement of
Awards shall be payable only to, the Participant or, if applicable, the
''alternate payee'' under a QDRO or the family member or trust to whom
such Stock Option, Stock Appreciation Right or other Award has been
transferred in accordance with the previous sentence.
 
        18.   Recapitalization or Reorganization.
 
        (a)   Authority of the Company and Shareholders.   The existence
of the Plan, the Award Agreements and the Awards granted hereunder
shall not affect or restrict in any way the right or power of the
Company or the shareholders of the Company to make or authorize any
adjustment, recapitalization, reorganization or other change in the
Company's capital structure or its business, any merger or
consolidation of the Company, any issue of stock or of options,
warrants or rights to purchase stock or of bonds, debentures,
preferred or prior preference stocks whose rights are superior to or
affect the Common Stock or the rights thereof or which are
convertible into or exchangeable for Common Stock, or the
dissolution or liquidation of the Company, or any sale or transfer
of all or any part of its assets or business, or any other corporate
act or proceeding, whether of a similar character or otherwise.
 
        (b)   Change in Capitalization.   Notwithstanding any provision
of the Plan or any Award Agreement, in the event of any change in
the outstanding Common Stock by reason of a stock dividend,
recapitalization, reorganization, merger, consolidation, stock
split, combination or exchange of shares affecting the Common Stock,
the Committee shall make (i) such proportionate adjustments it
considers appropriate (in the form determined by the Committee in
its sole discretion) to prevent diminution or enlargement of the
rights of Participants under the Plan with respect to the aggregate
number of shares of Common Stock for which Awards in respect thereof
may be granted under the Plan, the number of shares of Common Stock
covered by each outstanding Award, and the exercise prices in
respect thereof and/or (ii) such other equitable adjustments as it
deems appropriate in the interests of the holders of Awards. The
Committee's determination as to what, if any, adjustments shall be
made shall be final and binding on the Company and all Participants.
 
        19.   Change in Control.   In the event of a Change in Control (i)
all Stock Options or Stock Appreciation Rights then outstanding shall
automatically become fully vested and exercisable as of the date of the
Change in Control, (ii) all restrictions and conditions of all
Restricted Stock Awards then outstanding shall lapse as of the date of
the Change in Control, and (iii) all Performance Share Awards shall be
deemed to have been earned out in a manner set forth in the applicable
Award Agreement. In addition to the foregoing, in the case of a Change
in Control involving a merger of, or consolidation involving, the
Company in which the Company is (A) not the surviving corporation (the
''Surviving Entity'') or (B) becomes a wholly owned subsidiary of the
Surviving Entity or any Parent thereof, each outstanding Stock Option
granted under the Plan and not exercised (a ''Predecessor Option'')
will be converted into an option (a ''Replacement Option'') to acquire
common stock of the Surviving Entity or its Parent, which Replacement
Option will have substantially the same terms and conditions as the
Predecessor Option, with appropriate adjustments as to the number and
kind of shares and exercise prices. Notwithstanding the foregoing, in
the event of a Change in Control, the Committee expressly reserves the
discretion to cancel all outstanding Stock Options, effective as of the
date of the Change in Control, in exchange for a cash payment to be
made to each of the Participants within five business days following
the Change in Control in an amount equal to the excess of the fair
market value of the Company's Common Stock on the date of the Change in
Control over the exercise price of each such Stock Option, multiplied
by the number of shares that are subject to such option.
 
Notwithstanding the foregoing, in the event that the Company becomes a
party to a transaction that is intended to qualify for ''pooling of
interests'' accounting treatment and, but for one or more of the
provisions of this Plan or any Award Agreement would so qualify, then
this Plan and any Award Agreement shall be interpreted so as to
preserve such accounting treatment, and to the extent that any
provision of the Plan or any Award Agreement would disqualify the
transaction from pooling of interests accounting treatment (including,
if applicable, an entire Award Agreement), then such provision shall be
null and void. All determinations to be made in connection with the
preceding sentence shall be made by the independent accounting firm
whose opinion with respect to ''pooling of interests'' treatment is
required as a condition to the Company's consummation of such
transaction.
 
        20.   Amendment of the Plan.   The Board or Committee may at any
time and from time to time terminate, modify, suspend or amend the Plan
in whole or in part; provided, however, that no such termination,
modification, suspension or amendment shall be effective without
shareholder approval if such approval is required to comply with any
applicable law or stock exchange rule; and provided further, that the
Board or Committee may not, without shareholder approval, increase the
Section 5 Limit except as provided in Section 18(b) above. No
termination, modification, suspension or amendment of the Plan shall,
without the consent of a Participant to whom any Award shall previously
have been granted, adversely affect his or her rights under such
Awards. Notwithstanding any provision herein to the contrary, the Board
or Committee shall have broad authority to amend the Plan or any Award
to take into account changes in applicable tax laws, securities laws,
accounting rules and other applicable state and federal laws.
 
        21.   Miscellaneous.
 
        (a)   Tax Withholding.   No later than the date as of which an
amount first becomes includable in the gross income of the
Participant for applicable income tax purposes with respect to any
grant under the Plan, the Participant shall pay to the Company or
make arrangements satisfactory to the Committee regarding the
payment of any federal, state or local taxes of any kind required by
law to be withheld with respect to such amount. Unless otherwise
determined by the Committee, in accordance with rules and procedures
established by the Committee, the minimum required withholding
obligations may be settled with Common Stock, including Common Stock
that is part of the grant that gives rise to the withholding
requirement. The obligations of the Company under the Plan shall be
conditioned upon such payment or arrangements and the Company shall,
to the extent permitted by law, have the right to deduct any such
taxes from any payment of any kind otherwise due to the Participant.
 
        (b)   No Right to Grants or Employment.   No Eligible Individual
or Participant shall have any claim or right to receive grants of
Awards under the Plan. Nothing in the Plan or in any Award Agreement
shall confer upon any employee of the Company or any Subsidiary any
right to continued employment with the Company or any Subsidiary, as
the case may be, or interfere in any way with the right of the
Company or a Subsidiary to terminate the employment of any of its
employees at any time, with or without cause.
 
        (c)   Unfunded Plan.   The Plan is intended to constitute an
unfunded plan for incentive compensation. With respect to any
payments not yet made to a Participant by the Company, nothing
contained herein shall give any such Participant any rights that are
greater than those of a general creditor of the Company. In its sole
discretion, the Committee may authorize the creation of trusts or
other arrangements to meet the obligations created under the Plan to
deliver Common Stock or payments in lieu thereof with respect to
grants hereunder.
 
        (d)   Other Employee Benefit Plans.   Amounts received by a
Participant with respect to any Award made pursuant to the
provisions of the Plan shall not be included in, nor have any effect
on, the determination of benefits under any other employee benefit
plan or similar arrangement provided by the Company.
 
        (e)   Securities Law Restrictions.   The Committee may require
each Eligible Individual purchasing or acquiring shares of Common
Stock pursuant to a Stock Option or other Award under the Plan to
represent to and agree with the Company in writing that such
Eligible Individual is acquiring the shares for investment and not
with a view to the distribution thereof. All certificates for shares
of Common Stock delivered under the Plan shall be subject to such
stock-transfer orders and other restrictions as the Committee may
deem advisable under the rules, regulations, and other requirements
of the Securities and Exchange Commission or any exchange upon which
the Common Stock is then listed, and any applicable federal or state
securities law, and the Committee may cause a legend or legends to
be put on any such certificates to make appropriate reference to
such restrictions. No shares of Common Stock shall be issued
hereunder unless the Company shall have determined that such
issuance is in compliance with, or pursuant to an exemption from,
all applicable federal and state securities laws.
 
        (f)   Compliance with Rule 16b-3.
 
        (i) The Plan is intended to comply with Rule 16b-3 under the
Exchange Act or its successor under the Exchange Act and the
Committee shall interpret and administer the provisions of the
Plan or any Award Agreement in a manner consistent therewith. To
the extent any provision of the Plan or Award Agreement or any
action by the Committee fails to so comply, it shall be deemed
null and void, to the extent permitted by law and deemed
advisable by the Committee. Moreover, in the event the Plan or an
Award Agreement does not include a provision required by Rule
16b-3 to be stated therein, such provision (other than one
relating to eligibility requirements, or the price and amount of
Awards) shall be deemed automatically to be incorporated by
reference into the Plan or such Award Agreement insofar as
Participants subject to Section 16 of the Exchange Act are
concerned.
 
        (ii) Notwithstanding anything contained in the Plan or any
Award Agreement to the contrary, if the consummation of any
transaction under the Plan would result in the possible
imposition of liability on a Participant pursuant to Section
16(b) of the Exchange Act, the Committee shall have the right, in
its sole discretion, but shall not be obligated, to defer such
transaction to the extent necessary to avoid such liability.
 
   (g)   Award Agreement.   In the event of any conflict or
inconsistency between the Plan and any Award Agreement, the Plan
shall govern, and the Award Agreement shall be interpreted to
minimize or eliminate any such conflict or inconsistency.
 
        (h)   Expenses.   The costs and expenses of administering the
Plan shall be borne by the Company.
 
        (i)   Applicable Law.   Except as to matters of federal law, the
Plan and all actions taken thereunder shall be governed by and
construed in accordance with the laws of the State of California
without giving effect to conflicts of law principles.
 
        (j)   Effective Date.   The Plan shall be effective as of the
Effective Time of the business combination of Pacific Enterprises
and Enova Corporation, pursuant to which such corporations will
become subsidiaries of the Company (the ''Effective Date''), subject
to the approval by the Company's shareholders of the Plan at or
prior to the first annual meeting of the Company's shareholders
after the Effective Date. If shareholder approval is not obtained at
or prior to the first annual meeting of the shareholders of the
Company, the Plan and any Awards granted thereunder shall terminate
ab initio and be of no further force and effect.
 
 
</TEXT>
</DOCUMENT>