Exhibit 10.12

SEPARATION AGREEMENT

 

This Separation Agreement (“Agreement”) is made and entered into by and between
Edward Salas and Pacific Gas and Electric Company (the “Company” or “PG&E”)
(collectively the “Parties”) and sets forth the terms and conditions of
Mr. Salas’s separation from employment with the Company. The Company’s and
Mr. Salas’ rights and obligations under this Agreement will become effective on
the Effective Date, as defined in paragraph 18(a). Mr. Salas’ Date of
Resignation is defined in paragraph 1.

1.      Resignation. Mr. Salas hereby resigns from his position as Senior Vice
President, Engineering and Operations of the Company as of the close of business
on June 30, 2011 (for purposes of this Agreement, the “Date of Resignation”).
Mr. Salas shall have until June 1, 2011, to accept this Agreement by submitting
a signed copy to the Company. Regardless of whether Mr. Salas accepts this
Agreement, on the Date of Resignation, he will be paid all salary or wages and
vacation accrued, unpaid and owed to him as of that date, he will remain
entitled to any other benefits to which he is otherwise entitled under the
provisions of the Company’s plans and programs, and he will receive notice of
the right to continue his existing health-insurance coverage pursuant to COBRA.

2.      Separation benefits. In consideration of and conditioned upon Mr. Salas’
acceptance of this Agreement and the performance of his obligations under this
Agreement, the Company will provide to Mr. Salas the following separation
benefits:

a.      Severance payment. On July 15, 2011, the Company will pay Mr. Salas a
severance payment of $1,091,439.00 (one million ninety-one thousand four hundred
thirty-nine dollars), which is equal to 24 months base pay plus Mr. Salas’
target short-term incentive payment for 2011. This amount has been calculated in
accordance with the terms of the PG&E Corporation Officer Severance Policy
(“Policy”). The payment will be reduced by applicable withholding deductions.

b.      Monthly payments. In addition to the lump sum payment set forth in
Section 2(a), commencing August 1, 2011 and continuing for the next 12 (twelve)
months through and including July 1, 2012, Mr. Salas shall receive on the first
of the month $44,167.00. The payments will be reduced by applicable withholding
deductions. Each monthly payment shall constitute a “separate payment” for
purposes of Section 409A of the Internal Revenue Code of 1986, as amended
(“Section 409A”) and each such payment made prior to March 15, 2012 is intended
to be exempt from Section 409A under the short-term deferral exemption under
Sction 409A. The parties agree that, except under this Agreement, Mr. Salas does
not have a right to receive any portion of the payments provided for in the
Section 2b under any arrangements with the Company or its affiliates (including,
without limitation, the Policy).

c.      Stock. Upon the Date of Resignation, but conditioned on the occurrence
of the Effective Date of this Agreement as defined in paragraph 18(a) below, all
unvested restricted stock and restricted stock units granted to Mr. Salas under
the PG&E Corporation 2006 Long-Term Incentive Plan (“LTIP”) as of the Date of
Resignation will continue to vest over a

--------------------------------------------------------------------------------

period of months equal to the Severance Multiple (as such term is defined in the
Policy) after the Date of Resignation as if Mr. Salas had remained employed for
such period, or otherwise in accordance with plans, programs, policies, and
agreements applicable to Mr. Salas’ awards. Upon the Date of Resignation, but
conditioned on the occurrence of the Effective Date of this Agreement, all
unvested performance shares and special incentive stock ownership premiums
(“SISOPs”) granted to Mr. Salas under the LTIP will vest in accordance with
Company plans, programs, policies, and/or agreements applicable to those awards
and in effect at the time that this Agreement is signed by Mr. Salas. All
equity-based awards (or portions thereof) that do not vest based on the
foregoing shall be forfeited. Vested restricted stock units, performance shares,
and SISOPs shall be settled in cash or shares, if at all, in accordance with the
terms of the applicable, plans, polices, plans, programs, and/or agreements in
effect at the time this Agreement is signed by Mr. Salas.

d.      Annual Incentive. In the event that officers in Mr. Salas’ officer band
are eligible for a payment under the Company’s Short-Term Incentive Plan
(“STIP”) for the year in which the Date of Resignation occurs, the Company will
make the STIP payment that he would have received, pro-rated to reflect the
number of months from the beginning of the year to the Date of Resignation. The
STIP payment, if any, will be made at such time as STIP payments are made to
officers in his band. The STIP Plan Administrator will have the sole discretion
to determine the amount of STIP payment, consistent with the program guidelines
for the year in which the Date of Resignation occurs.

e.      Career transition services. For a maximum period of one year following
the Date of Resignation, the Company will provide Mr. Salas with executive
career transition services from the firm of Torchiana, Mastrov & Sapiro, Inc.,
in accordance with the contract between the Company and Torchiana, Mastrov &
Sapiro, Inc. Mr. Salas’s entitlement to services under this Agreement will
terminate before the end of the one-year period if and when he becomes employed,
either by another employer or through self-employment other than consulting with
the Company. If Mr. Salas becomes employed, he will promptly notify the
Company’s Human Resources Officer to enable the Company to end the provision of
services to him by Torchiana, Mastrov & Sapiro, Inc.

f.      Payment of COBRA premiums. If Mr. Salas elects and is otherwise eligible
to continue his existing health-insurance coverage pursuant to COBRA, the
Company will pay his monthly COBRA premiums for the eighteen-month period
commencing the first full month after the Date of Resignation and until and
unless Mr. Salas becomes covered under the health-insurance plan of another
employer or through self-employment. Mr. Salas will promptly notify the
Company’s Human Resources Officer if he becomes employed within that period.

3.      Defense and indemnification in third-party claims. The Company and/or
its parent, affiliate, or subsidiary will provide Mr. Salas with legal
representation and indemnification protection in any legal proceeding in which
he is a party or is threatened to be made a party by reason of the fact that he
is or was an employee or officer of the Company and/or its parent, affiliate or
subsidiary, in accordance with the terms of the resolution adopted by the
Company’s Board of Directors on July 19, 1995 (“Board Resolution”) or as
otherwise required by law.

--------------------------------------------------------------------------------

4.      Cooperation with legal proceedings.

a.      In exchange for the consideration detailed in Section 2, the Company and
Mr. Salas agree that they shall reasonably cooperate with respect to any claim,
litigation or judicial, arbitral or investigative proceeding initiated by any
private party or by any regulator, governmental entity, or self-regulatory
organization, that relates to or arises from any matter with which Mr. Salas was
involved during his employment with the Company, or that concerns any matter of
which Mr. Salas has information or knowledge. Mr. Salas’s duty of cooperation
includes, but is not limited to: (i) meeting with the Company’s attorneys by
telephone or in person at mutually convenient times and places in order to state
truthfully Mr. Salas’s recollection of events; (ii) appearing at the Company's
reasonable request as a witness at depositions or trials, without the necessity
of a subpoena, in order to state truthfully Mr. Salas’s knowledge of matters at
issue; and (iii) signing at the Company’s request declarations or affidavits
that truthfully state matters of which Mr. Salas has knowledge. In addition,
Mr. Salas agrees to notify the Company’s Chief Legal Officer promptly of any
requests for information or testimony that he receives in connection with any
litigation or investigation relating to the Company's business, and the Company
agrees to promptly notify Mr. Salas of any requests for information or testimony
that it receives relating to Mr. Salas. Notwithstanding any other provision of
this Agreement, this Agreement shall not be construed or applied so as to
require any Party to violate any confidentiality agreement or understanding with
any third party, nor shall it be construed or applied so as to compel any Party
to take any action, or omit to take any action, requested or directed by any
regulatory or law enforcement authority. The Company shall provide Mr. Salas
with separate legal counsel consistent with the Board Resolution. If Mr. Salas
is required to travel under this Agreement, such travel shall be consistent with
his prior role as an executive officer and shall be reimbursed by the Company.
The Company will use its best efforts to accommodate any reasonable requests of
Mr. Salas to work around his other business and family commitments in performing
services under this Section 4(a).

b.      Anticipating a greater time commitment prior to September 1, 2011 to
meet the obligations in subpargraph a above, Mr. Salas agrees to not to obtain
full-time employment at any time prior to September 1, 2011. After September 1,
2011, the Company agrees to compensate Mr. Salas at a rate of $250.00 per hour
for the time Mr. Salas spends fulfilling his duty to cooperate, but not to
include any time in deposition for which Mr. Salas was subpoenaed by a third
party. Any time spent in preparation of a subpoena, any hearing, gathering any
information in response to a subpoena for the production of documents, or
otherwise requested by the Company, however, shall be billable. Mr. Salas will
only be entitled to his $250.00 per hour rate in September and October 2011 for
time spent in excess of fifteen hours in either month. Mr. Salas shall bill
Company on a monthly basis and include supporting data and documentation for the
expense(s).

5.      Release of claims and covenant not to sue.

a.      In consideration of the separation benefits and other benefits the
Company is providing under this Agreement, Mr. Salas, on behalf of himself and
his representatives, agents, heirs and assigns, waives, releases, discharges and
promises never to assert any and all claims, liabilities or obligations of every
kind and nature, whether known or unknown, suspected or unsuspected that he ever
had, now has or might have as of the Effective Date against the

--------------------------------------------------------------------------------

Company or its predecessors, parent, affiliates, subsidiaries, shareholders,
owners, directors, officers, employees, agents, attorneys, successors, or
assigns. These released claims include, without limitation, any claims arising
from or related to Mr. Salas’s employment with the Company, its parent or any of
its affiliates and subsidiaries, and the termination of that employment. These
released claims also specifically include, but are not limited, any claims
arising under any federal, state and local statutory or common law, such as (as
amended and as applicable) Title VII of the Civil Rights Act, the Age
Discrimination in Employment Act, the Americans With Disabilities Act, the
Employee Retirement Income Security Act, the California Fair Employment and
Housing Act, the California Labor Code, any other federal, state or local law
governing the terms and conditions of employment or the termination of
employment, and the law of contract and tort; and any claim for attorneys’ fees.

b.      Mr. Salas acknowledges that there may exist facts or claims in addition
to or different from those which are now known or believed by him to exist.
Nonetheless, this Agreement extends to all claims of every nature and kind
whatsoever, whether known or unknown, suspected or unsuspected, past or present,
and Mr. Salas specifically waives all rights under Section 1542 of the
California Civil Code which provides that:

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

c.      With respect to the claims released in the preceding paragraphs,
Mr. Salas will not initiate or maintain any legal or administrative action or
proceeding of any kind against the Company or its predecessors, parent,
affiliates, subsidiaries, shareholders, owners, directors, officers, employees,
agents, attorneys, successors, or assigns, for the purpose of obtaining any
personal relief, nor (except as otherwise required or permitted by law) assist
or participate in any such proceedings, including any proceedings brought by any
third parties.

d.      Within seven days of the Date of Resignation Mr. Salas shall execute the
Release of Claims and Covenant Not to Sue for claims as of the Date of
Resignation in the form provided in Attachment A to this agreement

6.      Re-employment. Mr. Salas will not seek any future re-employment with the
Company, its parent or any of its subsidiaries or affiliates. This paragraph
will not, however, preclude Mr. Salas from accepting an offer of future
employment from the Company, its parent or any of its subsidiaries or
affiliates.

7.      Non-disclosure.

a.      Mr. Salas will not disclose, publicize, or circulate to anyone in whole
or in part, any information concerning the existence, terms, and/or conditions
of this Agreement without the express written consent of the Company’s Chief
Legal Officer or his authorized designees unless otherwise required or permitted
by law. Notwithstanding the preceding sentence, Mr. Salas may disclose the terms
and conditions of this Agreement to his family

--------------------------------------------------------------------------------

members, and any attorneys or tax advisors, if any, to whom there is a bona fide
need for disclosure in order for them to render professional services to him,
provided that the person first agrees to keep the information confidential and
not to make any disclosure of the terms and conditions of this Agreement unless
otherwise required or permitted by law.

b.      Mr. Salas will not use, disclose, publicize, or circulate any
confidential or proprietary information concerning the Company or its
subsidiaries or affiliates, which has come to his attention during his
employment with the Company, unless doing so is expressly authorized in writing
by the Company’s Chief Legal Officer, or is otherwise required or permitted by
law. Before making any legally-required or permitted disclosure, Mr. Salas will
give the Company notice at least ten (10) business days in advance.

8.      Non-Disparagement. Mr. Salas agrees to refrain from performing any act,
engaging in any conduct or course of action or making or publishing any
statements, claims, allegations or assertions, which have or may reasonably have
the effect of demeaning the name or business reputation of the Company, or any
of its parent companies, subsidiaries or affiliates, or any of their respective
employees, officers, directors, agents or advisors in their capacities as such
or which adversely affects (or may reasonably be expected adversely to affect)
the best interests (economic or otherwise) of any of them. The Company agrees to
refrain from performing any act, engaging in any conduct or course of action or
making or publishing any statements, claims, allegations or assertions in any
print, electronic or television media or in investor conference calls or
webcasts, which have or may reasonably have the effect of demeaning the name or
business reputation of Mr. Salas. The Company further agrees to instruct its
officers, (in each case, while such person remains an officer of the Company) to
comply with the Company’s obligations under this paragraph. In the event the
Company’s Chief Legal Officer or Head of Human Resources acquires actual
knowledge that a violation of the Company’s obligations under this paragraph 8
has occurred, the Company shall take reasonable action to reprimand and further
discourage such behavior in violation of this paragraph 8. Each Party agrees
that nothing in this paragraph 8 shall preclude the other Party from fulfilling
any duty or obligation that he or it may have at law, from responding to any
subpoena or official inquiry from any court or government agency, including
providing truthful testimony, documents subpoenaed or requested or otherwise
cooperating in good faith with any proceeding or investigation, or from taking
any reasonable actions to enforce such party’s rights under this Agreement in
accordance with the dispute resolution provisions specified in paragraph 15
hereof. Each Party shall continue to comply with its or his obligations under
this Paragraph 8 regardless of any alleged breach by the other Party of its or
his agreements contained in this paragraph 8 unless and until there has been a
final determination by a court or an arbitration panel that the other Party has
breached its or his obligations under this paragraph. Nothing contained herein
shall preclude any party from providing truthful testimony to the extent
compelled by legal process.

9.      No unfair competition.

a.      Mr. Salas will not engage in any unfair competition against the Company,
its parent or any of its subsidiaries or affiliates.

--------------------------------------------------------------------------------

b.      For a period of one year after the Effective Date, Mr. Salas will not,
directly or indirectly, use the Company’s trade secret information to solicit or
contact for the purpose of diverting or taking away or attempt to solicit or
contact for the purpose of diverting or taking away:

 

  (1) any existing customer of the Company or its parent, affiliates or
subsidiaries;

 

  (2) any prospective customer of the Company or its parent, affiliates or
subsidiaries about whom Mr. Salas acquired information as a result of any
solicitation efforts by the Company or its parent, affiliates or subsidiaries,
or by the prospective customer, during Mr. Salas’s employment with the Company;

 

  (3) any existing vendor of the Company or its parent, affiliates or
subsidiaries; or

 

  (4) any prospective vendor of the Company or its parent, affiliates or
subsidiaries, about whom Mr. Salas acquired information as a result of any
solicitation efforts by the Company or its parent, affiliates or subsidiaries,
or by the prospective vendor, during Mr. Salas’s employment with the Company.

c.      For a period of one year after the Effective Date, Mr. Salas will not,
directly or indirectly solicit or contact for the purpose of diverting or taking
away or attempt to solicit or contact for the purpose of diverting or taking
away:

 

  (1) any existing employee, agent or consultant of the Company or its parent,
affiliates or subsidiaries, to terminate or otherwise alter the person’s or
entity’s employment, agency or consultant relationship with the Company or its
parent, affiliates or subsidiaries; or

 

  (2) any existing employee, agent or consultant of the Company or its parent,
affiliates or subsidiaries, to work in any capacity for or on behalf of any
person, company or other business enterprise that is in competition with the
Company or its parent, affiliates or subsidiaries.

10.      Material breach by Employee. In the event that Mr. Salas materially
breaches any provision of this Agreement, including but not necessarily limited
to paragraphs 4, 5, 6, 7, 8 and/or 9, and is unable and/or unwilling to cure
said breach on a timely basis the Company will have no further obligation to pay
or provide to him any unpaid amounts or benefits specified in this Agreement.
Despite any breach by Mr. Salas, his other duties and obligations under this
Agreement, including his waivers and releases, will remain in full force and
effect. In the event of a breach or threatened breach by Mr. Salas of any of the
provisions in paragraphs 4, 5, 6, 7, 8, and/or 9, the Company will, in addition
to any other remedies provided in this Agreement, be entitled to equitable
and/or injunctive relief and, because the damages for such a breach or

--------------------------------------------------------------------------------

threatened breach will be difficult to determine and will not provide a full and
adequate remedy, the Company will also be entitled to specific performance by
Mr. Salas of his obligations under paragraphs 4, 5, 6, 7, 8, and/or 9. Pursuant
to paragraph 15, and except as otherwise prohibited or limited by law, Mr. Salas
will also be liable for any litigation costs and expenses that the Company
incurs in successfully seeking enforcement of its rights under this Agreement,
including reasonable attorney’s fees.

11.      Material breach by the Company. Mr. Salas will be entitled to recover
actual damages in the event of any material breach of this Agreement by the
Company, including any unexcused late or non-payment of any amounts owed under
this Agreement, or any unexcused failure to provide any other benefits specified
in this Agreement. In the event of a breach or threatened breach by the Company
of any of its material obligations to him under this Agreement, Mr. Salas will
be entitled to seek, in addition to any other remedies provided in this
Agreement, specific performance of the Company’s obligations and any other
applicable equitable or injunctive relief. Pursuant to paragraph 15, and except
as prohibited or limited by law, the Company will also be liable for any
litigation costs and expenses that Mr. Salas incurs in successfully seeking
enforcement of his rights under this Agreement, including reasonable attorney’s
fees. Despite any breach by the Company, its other duties and obligations under
this Agreement will remain in full force and effect.

12.      No admission of liability. This Agreement is not, and will not be
considered, an admission of liability or of a violation of any applicable
contract, law, rule, regulation, or order of any kind.

13.      Complete agreement. This Agreement sets forth the entire agreement
between the Parties pertaining to the subject matter of this Agreement and fully
supersedes any prior or contemporaneous negotiations, representations,
agreements, or understandings between the Parties with respect to any such
matters, whether written or oral (including any that would have provided
Mr. Salas with any different severance arrangements). The Parties acknowledge
that they have not relied on any promise, representation or warranty, express or
implied, not contained in this Agreement. Parole evidence will be inadmissible
to show agreement by and among the Parties to any term or condition contrary to
or in addition to the terms and conditions contained in this Agreement.

14.      Severability. If any provision of this Agreement is determined to be
invalid, void, or unenforceable, the remaining provisions will remain in full
force and effect except that, should paragraphs 4, 5, 6, 7, 8 and/or 9 be held
invalid, void or unenforceable, either jointly or separately, the Company will
be entitled to rescind the Agreement and/or recover from Mr. Salas any payments
made and benefits provided to his under this Agreement.

15.      Arbitration. With the exception of any request for specific
performance, injunctive or other equitable relief, any dispute or controversy of
any kind arising out of or related to this Agreement, Mr. Salas’s employment
with the Company, the separation of Mr. Salas from that employment and from his
positions as an officer and/or director of the Company or any subsidiary or
affiliate, or any claims for benefits, will be resolved exclusively by final and
binding arbitration using a three-member arbitration panel in accordance with
the Commercial

--------------------------------------------------------------------------------

Arbitration Rules of the American Arbitration Association currently in effect,
provided, however, that in rendering their award, the arbitrators will be
limited to accepting the position of Mr. Salas or the Company. The only claims
not covered by this paragraph are any non-waivable claims for benefits under
workers’ compensation or unemployment insurance laws, which will be resolved
under those laws. Any arbitration pursuant to this paragraph will take place in
San Francisco, California. The Parties may be represented by legal counsel at
the arbitration but must bear their own fees for such representation in the
first instance. The prevailing party in any dispute or controversy covered by
this paragraph, or with respect to any request for specific performance,
injunctive or other equitable relief, will be entitled to recover, in addition
to any other available remedies specified in this Agreement, all litigation
expenses and costs, including any arbitrator, administrative or filing fees and
reasonable attorneys’ fees, except as prohibited or limited by law. The Parties
specifically waive any right to a jury trial on any dispute or controversy
covered by this paragraph. Judgment may be entered on the arbitrators’ award in
any court of competent jurisdiction. Subject to the arbitration provisions of
this paragraph, the sole jurisdiction and venue for any action related to the
subject matter of this Agreement will be the California state and federal courts
having within their jurisdiction the location of the Company’s principal place
of business in California at the time of such action, and both Parties thereby
consent to the jurisdiction of such courts for any such action.

16.     Governing law.   This Agreement will be governed by and construed under
the laws of the United States and, to the extent not preempted by such laws, by
the laws of the State of California, without regard to their conflicts of laws
provisions.

17.     No waiver.   The failure of either Party to exercise or enforce, at any
time, or for any period of time, any of the provisions of this Agreement will
not be construed as a waiver of that provision, or any portion of that
provision, and will in no way affect that party’s right to exercise or enforce
such provisions. No waiver or default of any provision of this Agreement will be
deemed to be a waiver of any succeeding breach of the same or any other
provisions of this Agreement.

18.     Acceptance of Agreement.

a.     Mr. Salas is hereby advised to seek the advice of counsel before signing
this Agreement. PG&E further agrees to pay directly or reimburse Mr. Salas up to
$7,500.00 for Mr. Salas’s attorney’s fees incurred with respect to this
Agreement and the Transition Agreement. Mr. Salas was provided not less than 21
days to consider and accept the terms of this Agreement and was advised to
consult with an attorney about the Agreement before signing it. The provisions
of the Agreement are, however, not subject to negotiation. After signing the
Agreement, Mr. Salas will have an additional seven (7) days in which to revoke
in writing acceptance of this Agreement. To revoke, Mr. Salas will submit a
signed statement to that effect to the Company’s Chief Legal Officer before the
close of business on the seventh day. If Mr. Salas does not submit a timely
revocation, the Effective Date of this Agreement will be the eighth (8th) day
after Mr. Salas signs this Agreement.

 

8

--------------------------------------------------------------------------------

b.     Mr. Salas acknowledges reading and understanding the contents of this
Agreement, being afforded the opportunity to review carefully this Agreement
with an attorney of his choice, not relying on any oral or written
representation not contained in this Agreement, signing this Agreement knowingly
and voluntarily, and, after the Effective Date of this Agreement, being bound by
all of its provisions.

 

Dated:   June 14, 2011

PACIFIC GAS AND ELECTRIC COMPANY

By:   JOHN R. SIMON   JOHN R. SIMON   SENIOR VICE PRESIDENT-HUMAN RESOURCES
Dated:   May 24, 2011 EDWARD SALAS EDWARD SALAS

ATTACHMENT A

RELEASE OF CLAIMS AND COVENANT NOT TO SUE

1.   In consideration of the separation benefits and other benefits the Company
is providing under the Separation Agreement executed by Mr. Salas on [5/24/11],
Mr. Salas, on behalf of himself and his representatives, agents, heirs and
assigns, waives, releases, discharges and promises never to assert any and all
claims, liabilities or obligations of every kind and nature, whether known or
unknown, suspected or unsuspected that he ever had, now has or might have as of
June 30, 2011 (the Date of Resignation under the Separation Agreement) against
the Company or its predecessors, parent, affiliates, subsidiaries, shareholders,
owners, directors,

--------------------------------------------------------------------------------

officers, employees, agents, attorneys, successors, or assigns. These released
claims include, without limitation, any claims arising from or related to
Mr. Salas’s employment with the Company, its parent or any of its affiliates and
subsidiaries, and the termination of that employment. These released claims also
specifically include, but are not limited, any claims arising under any federal,
state and local statutory or common law, such as (as amended and as applicable)
Title VII of the Civil Rights Act, the Age Discrimination in Employment Act, the
Americans With Disabilities Act, the Employee Retirement Income Security Act,
the California Fair Employment and Housing Act, the California Labor Code, any
other federal, state or local law governing the terms and conditions of
employment or the termination of employment, and the law of contract and tort;
and any claim for attorneys’ fees.

2.   Mr. Salas acknowledges that there may exist facts or claims in addition to
or different from those which are now known or believed by him to exist.
Nonetheless, this Agreement extends to all claims of every nature and kind
whatsoever, whether known or unknown, suspected or unsuspected, past or present,
and Mr. Salas specifically waives all rights under Section 1542 of the
California Civil Code which provides that:

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

3.   With respect to the claims released in the preceding paragraphs, Mr. Salas
will not initiate or maintain any legal or administrative action or proceeding
of any kind against the Company or its predecessors, parent, affiliates,
subsidiaries, shareholders, owners, directors, officers, employees, agents,
attorneys, successors, or assigns, for the purpose of obtaining any personal
relief, nor (except as otherwise required or

--------------------------------------------------------------------------------

permitted by law) assist or participate in any such proceedings, including any
proceedings brought by any third parties.

 

Dated:       7/1/11   . EDWARD SALAS   EDWARD SALAS