Summary
Sempra Energy (SRE) filed an 8-K on December 7, 2004, primarily announcing the adoption of the Sempra Energy 2005 Deferred Compensation Plan (the "2005 Plan"). This new plan is designed to comply with Section 409A of the Internal Revenue Code, which impacts deferred compensation arrangements. The 2005 Plan allows eligible executive officers, directors, and highly compensated employees to defer a portion of their compensation, including base salary and bonuses. Executive officers may also defer gains from stock options and restricted stock units, as well as severance benefits. Directors can defer retainer and meeting fees. Additionally, the filing reports the retirement of two directors, Hyla H. Bertea and Herbert L. Carter, who will not stand for re-election at the 2005 Annual Meeting of Shareholders. In conjunction with these retirements, the Board of Directors has reduced the authorized number of directors to twelve. The 2005 Plan itself is an unsecured general obligation of Sempra Energy, ranking equally with other unsecured and unsubordinated debt.
Key Highlights
- 1Sempra Energy adopted the "2005 Deferred Compensation Plan" to comply with new IRS regulations (Section 409A).
- 2The plan allows eligible employees (executives, directors, highly paid) to defer compensation, including salary, bonuses, and for executives, stock option gains and restricted stock units.
- 3Directors can defer retainer and meeting fees under the new plan.
- 4The company is also amending an existing deferred compensation plan to prevent new deferrals for certain amounts earned after January 1, 2005.
- 5Sempra Energy has reserved the right to amend or terminate the plan to ensure compliance with Section 409A, potentially impacting participant rights.
- 6Two directors, Hyla H. Bertea and Herbert L. Carter, announced their retirement, effective at the 2005 Annual Meeting.
- 7The Board of Directors has reduced the number of authorized directors to twelve following these retirements.