ex1051.htm


    Exhibit
10.51

    
 

    PG&E
CORPORATION

    2006
LONG-TERM INCENTIVE PLAN

     

    AMENDMENT
AND RESTATEMENT OF

    PERFORMANCE
SHARE AGREEMENT

    


     

    PG&E CORPORATION, a
California corporation, hereby amends and restates the terms and conditions of
the Performance Share Agreements granting Performance Shares on January 3, 2006
under the PG&E Corporation 2006 Long-Term Incentive Plan (the
“LTIP”).  The terms and conditions of the amended and restated
Performance Share Agreements are set forth below:

     

    
      
        	
                The
      LTIP and Other Agreements

              	
                This
      Agreement constitutes the entire understanding between you and PG&E
      Corporation regarding the Performance Shares, subject to the terms of the
      LTIP.  Any prior agreements, commitments or negotiations are
      superseded.  In the event of any conflict or inconsistency
      between the provisions of this Agreement and the LTIP, the LTIP shall
      govern.

                 

                For
      purposes of this Agreement, employment with PG&E Corporation shall
      mean employment with any member of the Participating Company
      Group.

                 

              
	
                Grant
      of

                Performance
      Shares

              	
                PG&E
      Corporation grants you the number of Performance Shares shown on the cover
      sheet of this Agreement.  The Performance Shares are subject to
      the terms and conditions of this Agreement and the LTIP.

                 

              
	
                Vesting
      of Performance Shares

              	
                As
      long as you remain employed with PG&E Corporation, the Performance
      Shares will vest on the first business day of January (the “Vesting Date”)
      of the third year following the date of grant specified in the cover
      sheet.  Except as described below, all Performance Shares
      subject to this Agreement that have not vested shall be forfeited upon
      termination of your employment.

                 

              
	
                Payment
      of Performance Shares

              	
                Upon
      the Vesting Date, PG&E Corporation’s total shareholder return (TSR)
      will be compared to the TSR of the twelve other companies in PG&E
      Corporation’s comparator group1 for the prior three calendar years (the
      “Performance Period”).  Subject to rounding considerations,
      there will be no payout for TSR below the 25th
      percentile of the comparator group; TSR at the 25th
      percentile will result in a 25% payout of Performance Shares; TSR at the
      75th
      percentile will result in a 100% payout of Performance Shares; and TSR at
      the 90th
      percentile or greater will result in a 200% payout of Performance
      Shares.  The following table sets forth the payout percentages
      for the various TSR rankings that could be achieved:

                 

                                                                   Number
      of Companies in

                                    
                                       Total
      (Including
      PG&E)                          

                                                                                      13                                         
            

                                

                                                                       Performance                  Rounded

                                                Rank                Percentile                        Payout          

                 

                                                  1                        100%                             200%

                                                  2                          92%                             170%

                                                  3                          83%                             130%

                                                  4                          75%                             100%

                                                  5                          67%                             
      90%

                                                  6                          58%                              75%

                                                  7                          50%                              65%

                                                  8                          42%                              50%

                                                  9                          33%                              35%

                                                10                          25%                              25%

                                                11                          17%                              
      0%

                                                12                          
      8%                                0%

                                                13                          
      0%                                0%

                 

                The
      payment will equal the product of the number of vested Performance Shares,
      the applicable payout percentage, and the average closing price of a share
      of PG&E Corporation common stock for the last 30 calendar days of the
      year preceding the Vesting Date as reported on the New York Stock
      Exchange.  Payments will be made as soon as practicable
      following the Vesting Date, but in event within sixty (60) days of the
      Vesting Date.

                 

              
	
                Dividends

              	
                Each
      time that PG&E Corporation declares a dividend on its shares of common
      stock, an amount equal to the dividend multiplied by the number of
      Performance Shares granted to you by this Agreement shall be accrued on
      your behalf.  If you receive a Performance Share payout in
      accordance with the preceeding paragraph, at that same time you also shall
      receive a cash payment equal to the amount of any dividends accrued over
      the Performance Period multiplied by the same payout percentage used to
      determine the amount of the Performance Share payout.

                 

              
	
                Voluntary
      Termination

              	
                If
      you terminate your employment with PG&E Corporation voluntarily before
      the Vesting Date, all of the Performance Shares shall be cancelled as of
      the date of such termination and any dividends accrued with respect to
      your Performance Shares shall be
forfeited.

              


      

    

    


    
      	
              Termination
      for Cause

            	
              If
      your employment with PG&E Corporation is terminated by PG&E
      Corporation for cause before the Vesting Date, all of the Performance
      Shares shall be cancelled as of the date of such termination and any
      dividends accrued with respect to your Performance Shares shall be
      forfeited.  In general, termination for “cause” means
      termination of employment because of dishonesty, a criminal offense or
      violation of a work rule, and will be determined by and in the sole
      discretion of PG&E Corporation.

               

            
	
              Termination
      other than for Cause

            	
              If
      your employment with PG&E Corporation is terminated by PG&E
      Corporation other than for cause before the Vesting Date, your unvested
      Performance Shares will vest proportionally based on the number of months
      during the Performance Period that you were employed (rounded down)
      divided by the number of months in the Performance Period (36
      months).  All other outstanding Performance Shares (and any
      associated accrued dividends) shall automatically be cancelled upon such
      termination.  Your vested Performance Shares will be payable, if
      at all, after the Vesting Date and in any event within sixty (60) days of
      the Vesting Date based on the same formula applied to active
      employees.  At that same time you also shall receive a cash
      payment, if any, equal to the amount of dividends accrued over the
      Performance Period with respect to your vested Performance Shares
      multiplied by the same payout percentage used to determine the amount, if
      any, of the Performance Share payout.

               

            
	
              Retirement

            	
              If
      you retire before the Vesting Date, your outstanding Performance Shares
      will continue to vest as though your employment had continued and will be
      payable, if at all, as soon as practicable following the Vesting Date, but
      in any event within sixty (60) days of the Vesting Date.  At
      that time you also shall receive a cash payment, if any, equal to the
      amount of dividends accrued over the Performance Period with respect to
      your Performance Shares multiplied by the same payout percentage used to
      determine the amount, if any, of the Performance Share
      payout.  You will be considered to have retired if you are age
      55 or older on the date of termination and if you were employed by
      PG&E Corporation for at least five consecutive years ending on the
      date of termination of your employment.

               

            
	
              Death/Disability

            	
              If
      your employment terminates due to your death or disability before the
      Vesting Date, all of your Performance Shares shall immediately vest and
      will be payable, if at all, as soon as practicable after the Vesting Date
      and in any event within sixty (60) days of the Vesting Date based on the
      same formula applied to active employees.  At that time you also
      shall receive a cash payment, if any, equal to the amount of dividends
      accrued over the Performance Period with respect to your Performance
      Shares multiplied by the same payout percentage used to determine the
      amount, if any, of the Performance Share payout.

               

            
	
              Termination
      Due to Disposition of Subsidiary

            	
              If
      (1) your employment is terminated (other than for cause or your voluntary
      termination) by reason of a divestiture or change in control of a
      subsidiary of PG&E Corporation, which divestiture or change in control
      results in such subsidiary no longer qualifying as a subsidiary
      corporation under Section 424(f) of the Code or (2) if your employment is
      terminated (other than for cause or your voluntary termination) coincident
      with the sale of all or substantially all of the assets of a subsidiary of
      PG&E Corporation, all Performance Shares shall vest proportionally
      based on the number of months during the Performance Period that you were
      employed (rounded down) divided by the number of months in the Performance
      Period (36 months).  All other outstanding Performance Shares
      (and any associated accrued dividends) shall automatically be cancelled
      upon such termination.  Your vested Performance Shares will be
      payable, if at all, after the Vesting Date and in any event within sixty
      (60) days of the Vesting Date  based on the same formula applied
      to active employees.  At that time you also shall receive a cash
      payment, if any, equal to the amount of dividends accrued over the
      Performance Period with respect to your vested Performance Shares
      multiplied by the same payout percentage used to determine the amount, if
      any, of the Performance Share payout.

               

            
	
              Withholding
      Taxes

            	
              PG&E
      Corporation will withhold amounts necessary to satisfy applicable taxes
      from the payment to be made with respect to your Performance
      Shares.  You will receive the remaining proceeds in
      cash.

               

            


    

    


    
      	
              Change
      in Control

            	
              All
      of your outstanding Performance Shares shall automatically vest, and
      become nonforfeitable if there is a Change in Control of PG&E
      Corporation before the Vesting Date.  Such vested Performance
      Shares will become payable on the first business day of the year following
      such Change in Control if such Change in Control results in a change in
      the ownership of effective control of PG&E Corporation, or a change in
      a substantial portion of the assets of PG&E Corporation within the
      meaning of Code Section 409A(a)(2)(A)(v) and the related regulations (a
      “409A Change in Control Event”).  If the change in control does
      not result in a 409A Change in Control Event, then payment shall be made
      as soon as practicable following the Vesting Date and in any event within
      sixty (60) days of the Vesting Date.  The payment, if any, will
      be based on PG&E Corporation’s TSR for the period from the date of
      grant to the date of the Change in Control compared to the TSR of the
      other companies in PG&E Corporation’s comparator group2 for the same period.  The
      payment will be calculated by multiplying the number of vested Performance
      Shares by the payout percentage.  The resulting number of
      Performance Shares will be multiplied by the average closing price of a
      share of PG&E Corporation common stock for the last 30 calendar days
      preceding the Change in Control as reported on the New York Stock
      Exchange.  At the same time, you shall also receive a cash
      payment, if any, equal to the amount of dividends accrued with respect to
      your Performance Shares to the first business day of the year following
      the Change in Control multiplied by the same payout percentage used to
      determine the amount, if any, of the Performance Share
payout.

               

            
	
              Leaves
      of Absence

            	
              For
      purposes of this Agreement, if you are on an approved leave of absence
      from PG&E Corporation, or a recipient of PG&E Corporation
      sponsored disability benefits, you will continue to be considered as
      employed.  If you do not return to active employment upon the
      expiration of your leave of absence or the expiration of your PG&E
      Corporation (or any of its subsidiaries) sponsored disability benefits,
      you will be considered to have voluntarily terminated your
      employment.  See above under “Voluntary
      Termination.”

               

              PG&E
      Corporation reserves the right to determine which leaves of absence will
      be considered as continuing employment and when your employment terminates
      for all purposes under this Agreement.

               

            
	
              No
      Retention Rights

            	
              This
      Agreement is not an employment agreement and does not give you
      the right to be retained by PG&E Corporation.  Except as
      otherwise provided in an applicable employment agreement, PG&E
      Corporation reserves the right to terminate your employment at any time
      and for any reason.

               

            
	
              Applicable
      Law

            	
              This
      Agreement will be interpreted and enforced under the laws of the State of
      California.

               

            


    

    


    

      

    

      
      1 The
identities of the companies currently comprising the comparator group are
included in the prospectus.  PG&E Corporation reserves the right
to change the companies comprising the comparator group at any
time.

    

      
      2 The
identities of the companies currently comprising the comparator group are
included in the prospectus.  PG&E Corporation reserves the right
to change the companies comprising the comparator group at any
time.