Document:

ex1018.htm

  

  

	  	  	
Exhibit 10.18

	

	
 

Peter A. Darbee

Chairman of the Board

Chief Executive Officer and President

	
 

1 Market, Spear Tower

Suite 2400

San Francisco CA  94105

 

415.267.7118

Fax:  415.267.7252

March 9, 2007

Mr. John Simon

5403 South Chester Court

Greenwood Village, CO  80111

Dear Hyun:

On behalf of PG&E Corporation, I am pleased to extend an invitation to you to join our organization as Senior Vice President, Human Resources, reporting to me.

 

Your initial total compensation package will consist of the following:

 

	
1.

	
An annual base salary of $325,000 ($27,083.33/month) subject to possible increases through our annual salary review plan.

 

	
2.

	
A one-time bonus of $100,000 payable within 60 days of your date of hire, subject to normal tax withholdings.  Should you leave the company or should your employment be terminated for cause within two years of your date of hire, a prorated amount of this bonus must be refunded to the company.

 

	
3.

	
A target incentive of $162,500 (50% of your base salary) in an annual short-term incentive plan under which your actual incentive dollars may range from zero to $325,000 based on performance relative to established goals.  This incentive will be prorated for the number of months worked from your date of hire and will be payable in 2008.

 

	
4.

	
Participation in the PG&E Corporation Long-Term Incentive Plan (LTIP) as a band 3 officer.  Grants under the LTIP are currently split equally between restricted stock and performance shares, and are generally made annually on the first business day of the year.  Your initial LTIP grant will be made on your date of hire, and will have an estimated value of $300,000.  This estimated value is used only for the purpose of determining the number of shares for your grant, which will be based on the closing price of PG&E Corporation common stock (PCG) on your date of hire.  The ultimate value that you realize from these grants will depend upon your employment status and the performance of PG&E Corporation common stock.

 

	
5.

	
A one-time supplement LTIP grant with an estimated current value of $200,000.  This grant will be apportioned and made in the same manner as the grant described in item 5.

 

	
6.

	
Participation in the PG&E Corporation Supplemental Executive Retirement Plan (SERP).  The basic benefit payable from the SERP at retirement is a monthly annuity equal to the product of 1.7% x [average of the three highest years’ combination of salary and annual incentive for the last ten years of service] x years of credited service x 1/12 less any amounts paid or payable from the Pacific Gas and Electric Company Retirement Plan (RP).

 

  

  

  

Mr. Simon

March 9, 2007

Page 2

	
7.

	
Conditioned upon meeting plan requirements, you will also be eligible for post-retirement life insurance and post-retirement medical benefits upon retirement under the RP.

 

	
8.

	
Participation in the PG&E Corporation Retirement Savings Plan (RSP), a 401(k) defined contribution plan.  You will be eligible to contribute as much as 20% of your salary on either a pre-tax or after-tax basis, subject to legal limits.  After your first year of service, we will match contributions you make, up to 3% of your salary, at 75 cents on each dollar contributed for the second and third years of your employment.  Thereafter, we will match contributions up to 6% of your salary at 75 cents on each dollar contributed.

 

	
9.

	
Participation in the PG&E Corporation Supplemental Retirement Savings Plan (SRSP), a non-qualified deferred compensation plan.  You may elect to defer payment of some of your compensation on a pre-tax basis.  We will provide you with the full matching contributions that cannot be provided through the RSP due to legal limitations imposed on highly compensated employees.

 

	
10.

	
As a result of your officer level (officer band 3), you will become an eligible participant under Executive Stock Ownership Program effective January 1, 2008.  As an ancillary benefit to that program, you will also be eligible to receive financial counseling from The AYCO Company at a subsidized rate to assist you in your understanding of our compensation and benefits programs and how those programs can help you to achieve financial security.

 

	
11.

	
Participation in a cafeteria-style benefits program that permits you to select coverage tailored to your personal needs and circumstances.  The benefits you elect will be effective the first of the month following the date of your hire.

 

	
12.

	
PG&E Corporation also offers a paid-time off (PTO) program.  You will be eligible for 200 (25 days) per year.  You will accrue PTO at rate of approximately 17 hours per month, provided that you work full-time for the month.  In addition, PG&E Corporation recognizes ten paid company holidays annually and provides three floating holidays immediately upon hire and at the beginning of each year.

 

	
13.

	
An annual perquisite allowance of $20,000 to be used in lieu of individual authorizations for cars and memberships in clubs and civic organizations.

 

	
14.

	
A comprehensive executive relocation assistance package, including: (1) the reimbursement of closing costs on the sale of your current residence, contingent upon using a PG&E-designated relocation company and purchasing a new residence, (2) the move of your household goods, including 60 days of storage and the movement of the goods out of storage, and (3) a lump sum payment of $10,000 payable within 60 days of your date of employment.  In addition, the package will include financial assistance in the form of a monthly mortgage subsidy of $3,000 (applicable to interest only) for a period of 36 months.  This subsidy is contingent upon the following: (1) your purchase of a principal residence (within 50 miles of your work location) within one year of your date of hire, (2) your satisfying typical mortgage qualification criteria, and (3) use of a company-designated lender.  Should you have any questions regarding the relocation package, please contact Denise Nicco, Director of Relocation at (415) 973-3814.

 

  

  

  

Mr. Simon

March 9, 2007

Page 3

This offer is contingent upon your passing a comprehensive background verification including a credit check and security clearance assessment, and a standard drug analysis test.  We will also need to verify your eligibility to work in the United States based on applicable immigration laws.  In addition, your election as an officer of PG&E Corporation is subject to approval by the Board of Directors of PG&E Corporation, and elements of your compensation are subject to approval by the Nominating, Compensation, and Governance Committee of the Board of Directors of PG&E Corporation.

 

I look forward to your joining our team and believe you will make a strong contribution to the achievement of our being the leading utility in the United States.  I would appreciate receiving your written acceptance of this offer as soon as possible.  Please call me at any time if you have questions.

 

Sincerely,

 

 

/s/ PETER A. DARBEE

 

 

PETER A. DARBEE

 

 

Attachment

 

 

 

 

 

This is to confirm my acceptance of PG&E Corporation’s offer as Senior Vice President, Human Resources as outlined above.

 

 

	
JOHN R. SIMON          

	
(Signature and Date)Unassociated Document

Exhibit 10.27

2013 OFFICER SHORT-TERM INCENTIVE PLAN

On February 20, 2013, the Compensation Committee of the PG&E Corporation Board of Directors (“Committee”) approved the structure of the 2013 Short-Term Incentive Plan (“STIP”), as well as the weighting and the specific performance targets for each component of the 2013 STIP.  Officers of PG&E Corporation and Pacific Gas and Electric Company (“Utility”) (together, the “Companies”) are eligible to receive cash incentives under the STIP based on the extent to which the adopted 2013 performance targets are met.  Target cash awards under the STIP may range from 40 percent to 100 percent of base salary depending on officer level.  STIP company performance may range from a score of 0 to 2.0.  The Committee may apply an individual performance modifier from 0 percent to 150 percent to individual officer awards.  The Committee will retain complete discretion to determine and pay all STIP awards to officers and non-officer employees.  This includes discretion to reduce the final score on any and all measures downward to zero.

The Committee approved the 2013 performance targets for each of the three categories set forth in the table below.

The corporate financial performance target, with a weighting of 25%, is based on PG&E Corporation’s budgeted earnings from operations that were previously approved by the Board of Directors, consistent with the basis for reporting and guidance to the financial community.  As with previous earnings performance scales, unbudgeted items impacting comparability such as changes in accounting methods, workforce restructuring, and one-time occurrences will be excluded.

2013 STIP Performance Targets

	
Category

	  	
Relative Weight

	  	
2013 Target

	

Safety (includes both Public and Employee metrics) (1)

	  	

40.0%

	  	

1.000

	

Customer (includes customer satisfaction and reliability) (2)

	  	

35.0%

	  	

1.000

	

Financial (includes Earnings from Operations)

	  	

25.0%

	  	

1.000

 

	
1.

	
Safety includes four subcomponents:  (1) Nuclear Operations Safety, (2) Electric Operations Safety, (3) Gas Operations Safety, and (4) Employee Safety, all of which measure the Utility’s safety performance with respect to each of those areas.  The Committee will retain complete discretion to reduce the final Safety rating downward to zero based on the Companies’ overall safety performance for 2013.  The Companies’ overall safety performance will be measured both by the quantitative measures described above and by qualitative performance.  With respect to qualitative performance, the Committee will consider the collective impact that the Companies’ business operations have had on public and employee safety.

 

	
2.

	
Customer includes five subcomponents: (1) the overall satisfaction of customers, as measured through a quarterly survey, (2) the number of third party “dig-ins” (i.e., damage resulting in repair or replacement of underground facility) to the Utility’s gas and electric assets, (3) the average duration of electricity outages experienced by all customers served, as measured by the System Average Interruption Duration Index , (4) how quickly gas asset information is entered into the Utility’s gas mapping system after a gas project is completed, and (5) the Utility’s ability to complete certain committed work for gas operations-related programs efficiently.

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