Document:

Settlement Agreement & Release - Pacific Gas and Electric Company and Keenan

 Exhibit 10.6 

SETTLEMENT AGREEMENT AND RELEASE 
 This Settlement Agreement and Release (“Agreement”) is entered into as of April 5, 2011 (the “Effective Date”), by and between Pacific Gas and Electric Company (the
“Company”) and John S. Keenan (“Executive”) (each a “Party,” and together, the “Parties”). 
 Recitals 
 WHEREAS, Executive currently serves in the capacity of
Chief Operating Officer of the Company. 
 WHEREAS, Executive has decided to retire from active employment pursuant to a written
agreement between the parties, effective May 1, 2011. 
 WHEREAS, the Parties wish to provide for, among other things,
Executive’s continued cooperation in future administrative and legal proceedings following the Effective Date. 
 WHEREAS,
the Parties wish to resolve any disputes between them regarding Executive’s service credit under the Company’s Retirement Plan and his eligibility for post retirement benefits, the Parties’ cooperation in certain matters, and the
payment to Executive of certain benefits as set forth below. 
 Agreement 

In consideration of the mutual representations, warranties, covenants and agreements set forth herein, and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties agree as follows: 

1.    Payment. The Company shall pay to Executive the amount of $950,234 (NINE HUNDRED FIFTY THOUSAND, TWO
HUNDRED THIRTY FOUR DOLLARS). The payment shall be made to Executive as follows: One-sixth of the amount shall be paid to Executive on the last day of the first month that is six full months after his separation on April 30, 2011 from service
with the Company. The remaining amount shall be paid to Executive in 30 equal monthly payments, beginning on the last day of the month following the first payment. The Parties agree that the payment made to Executive under this Settlement Agreement
and Release is in addition to, and does not affect, any payment to which Executive may be otherwise entitled under Executive’s Separation Agreement. If Executive dies before the entire amount under this Section 1 is paid, all remaining
payments shall be payable to his heirs. 
 2.    Cooperation in Proceedings. In exchange for the
consideration detailed in Section 1, the Company and Executive agree that they shall fully 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 Executive was involved during his employment with the Company, or that concerns any matter of which Executive has information or
knowledge. Executive’s duty of cooperation includes, but is not limited to: (i) meeting with the Company’s attorneys by 

  
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telephone or in person at mutually convenient times and places in order to state truthfully Executive’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 Executive’s knowledge of matters at issue; and (iii) signing at the Company’s request declarations or affidavits that truthfully
state matters of which Executive has knowledge. In addition, Executive 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 Executive of any requests for information or testimony that it receives relating to Executive. 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. Company shall provide Executive with separate legal counsel consistent with Board Resolution regarding representation of former officers. If Executive 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. Executive shall bill Company on a monthly basis and include supporting data and documentation for the
expense(s). 
 3.     Restrictive Covenants. 

(a)    Protection of Confidential Information. Executive acknowledges that his past employment as a senior
officer of the Company and his engagement as an executive create a relationship of confidence and trust between Executive and the Company with respect to confidential and proprietary information applicable to the business of the Company and its
clients. Accordingly, Executive agrees that the restrictions contained in this Section 3 are reasonable and necessary for the protection of the interests of the Company and that any violation of these restrictions would cause substantial and
irreparable injury to the Company. 
 (i)    Definition of Confidential Information. For purposes of
this Agreement, “Confidential Information” shall mean all nonpublic information (whether in paper or electronic form, or contained in Executive’s memory, or otherwise stored or recorded) relating to or arising from the
Company’s business, including, without limitation, trade secrets used, developed or acquired by the Company in connection with its business. Without limiting the generality of the foregoing, “Confidential Information” shall
specifically include all information concerning the manner and details of the Company’s operation, organization and management; financial information and/or documents and nonpublic policies, procedures and other printed, written or electronic
material generated or used in connection with the Company’s business; the Company’s business plans and strategies; the identities of the Company’s customers and the specific individual customer representatives with whom the Company
works; the details of the Company’s relationship with such customers and customer representatives; the identities of distributors, contractors and vendors utilized in the Company’s business; the details of the Company’s relationships
with such distributors, contractors and vendors; the nature of fees and charges made to the Company’s customers; nonpublic forms, contracts and other documents used in the Company’s business; all information concerning the Company’s
employees, agents and contractors, including without limitation such persons’ compensation, benefits, skills, abilities, experience, knowledge and shortcomings, if any; the nature and content of computer software

  
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used in the Company’s business, whether proprietary to the Company or used by the Company under license from a third party; and all other information concerning the Company’s concepts,
prospects, customers, employees, agents, contractors, earnings, products, services, equipment, systems, and/or prospective and executed contracts and other business arrangements. “Confidential Information” does not include information that
is in the public domain through no wrongful act on the part of Executive. 
 (ii)    Executive’s
Use of Confidential Information. Except in connection with his performance of this Agreement, Executive shall not, without the Company’s prior written consent, at any time, directly or indirectly: (i) use any Confidential Information
for any purpose; or (ii) disclose or otherwise communicate any Confidential Information to any person or entity, except as required by applicable law or order of a court or government agency of competent jurisdiction. 

(iii)    Records Containing Confidential Information. “Confidential Records” means all
documents and other records, whether in paper, electronic or other form, that contain or reflect any Confidential Information. All Confidential Records prepared by or provided to Executive are and shall remain the Company’s property. Except in
connection with and in furtherance of Executive’s work on the Company’s behalf or with the Company’s prior written consent, Executive shall not, at any time, directly or indirectly: (i) copy or use any Confidential Record for any
purpose; or (ii) show, give, sell, disclose or otherwise communicate any Confidential Record or the contents of any Confidential Record to any person or entity, except as required by applicable law or order of a court or government agency of
competent jurisdiction. On the Effective Date, Executive shall immediately deliver to the Company or its designee (and shall not keep in Executive’s possession or deliver to any other person or entity) all Confidential Records and all other
Company property in Executive’s possession or control. If any Confidential Information and/or Confidential Records are shared with or disclosed to Executive during the time period he is receiving payments under Section 1, then such
Confidential Information and/or Confidential Records shall be governed by the terms of this Section 3, and at the conclusion of the receipts of payments to Executive under Section 1, or upon the Company’s earlier request, Executive
shall immediately deliver to the Company or its designee (and shall not keep in Executive’s possession or deliver to any other person or entity) all Confidential Records then in Executive’s possession or control. 

4.    Noninterference Covenants. 
 (b)    Executive will not engage in any unfair competition against the Company, or its Affiliates 
 (i)    For a period of one year after the Effective Date, Executive 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 customer of the Company or its Affiliates; 

  

	 	(2)	 any prospective customer of the Company or its Affiliates about whom Executive acquired information as a result of any

  
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solicitation efforts by the Company or its Affiliates, or by the prospective customer, during Executive’s employment with the Company; 

 

	 	(3)	any existing vendor of the Company or its Affiliates; 

  

	 	(4)	any prospective vendor of the Company or Affiliates, about whom Executive acquired information as a result of any solicitation efforts by the Company or its Affiliates,
or by the prospective vendor, during Executive’s employment with the Company; 

  

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

  

	 	(6)	any existing employee, agent or executive of the Company or its Affiliates, 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 Affiliates. 

 5.    Non-disparagement
Covenants. 
 (a)    Executive shall not disparage the Company or any Affiliate, or any product or
service of the Company or any Affiliate, or any past or present employee, officer or director of the Company or any Affiliate, or of any member of any Board of Directors of any entity affiliated with the Company. 

(b)    No Company or Affiliate officer or director shall, while employed by or while serving on the Board, as the
case may be, disparage Executive. Without limiting the foregoing, the Company covenants that no member of the Company’s Board or Affiliate shall, while employed by or while serving on the Board, as the case may be, suggest in any way that
Executive’s retirement from the Company was the result of disciplinary action against or wrongdoing by Executive. 

6.    Additional Documents. Executive agrees that he shall do such acts, and execute and deliver to the
Company such additional documents or instruments not inconsistent herewith, as may be reasonably required to effect the purposes of this Agreement and shall cooperate fully with the Company to implement this Agreement and any business transactions
of the Company or any litigation that may have arisen or arise in connection therewith. 

7.    Remedies. Subject to the Company’s establishment of breach and proof of damages, the Company shall
cease paying any unpaid payments and also be entitled to return of any and all payments previously paid or provided to him under this Agreement not otherwise required by law. Despite any breach by Executive, his other duties and obligations under
this Agreement and the Severance Agreement will remain in full force and effect. In the event of a breach or threatened breach of any of the provisions of Sections 2 through 6, the Company will, in addition to any other remedies provided in this
Agreement, be entitled to equitable and/or 

  
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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 Executive of his obligations under Sections 2 through 6, without any requirement to post bond, which is hereby expressly waived by Executive. 
 8.    Dispute Resolution. Any dispute arising under or relating in any way to this Agreement shall be submitted to arbitration in San Francisco, California, or such other venue
as the Parties may mutually determine, in front of a single arbitrator who is a member of the panel of former judges affiliated with the Judicial Arbitration Mediation Services (the “JAMS”), in accordance with the Employment Arbitration
Rules of the American Arbitration Association then in effect, as the exclusive remedy for such dispute. Each Party shall submit a list of three names of proposed arbitrators from the JAMS panel. If the Parties cannot mutually agree on an arbitrator
from such lists, each Party shall strike two names from the other Party’s list, and the arbitrator shall then be chosen at random by the JAMS from the two remaining names. The Parties agree that such arbitration will be confidential and that no
details, descriptions, settlements, or other facts concerning such arbitration shall be disclosed or released to any third party without the specific written consent of the other Party, unless required by law or in connection with enforcement of any
decision in such arbitration. Any claim for punitive damages is waived by the Parties and any damages awarded in such arbitration shall not include punitive damages. The award of the arbitrator may be entered as a judgment in any court of competent
jurisdiction. In the event of any arbitration or litigation arising out of a dispute as to the interpretation, enforcement, or breach of this Agreement, the prevailing party shall be entitled to an award of its attorney fees, expert witness expenses
and legal costs reasonably incurred. 
 9.    Severability. It is the desire and intent of the
Parties that the provisions of this Agreement shall be enforced to the fullest extent permissible under the laws and public policies applied in each jurisdiction in which enforcement is sought. In the event that any one or more of the provisions or
parts thereof of this Agreement shall be held to be invalid, illegal or unenforceable, the validity, legality and enforceability of the remainder of this Agreement shall not in any way be affected or impaired thereby, so long as the rights, duties
and obligations of the Parties hereunder have been served. Moreover, if any one or more of the provisions or parts thereof contained in this Agreement is held to be excessively broad as to duration, scope, activity or subject, such provisions shall
be construed by limiting and reducing them so as to be enforceable to the maximum extent allowed by applicable law, so long as the rights, duties and obligations of the Parties hereunder have been served. 

10.    Entire Agreement. This Agreement sets forth the entire agreement and understanding of the Parties
regarding the subject matter hereof and may not be modified without the express written consent of the Parties. This Agreement supersedes all prior discussions, agreements, arrangements, understandings and negotiations, written or oral, between the
Parties regarding the subject matter hereof except as to the Parties’ Severance Agreement and Mortgage Subsidy Agreement. 

11.    Notices. Any notice required or permitted under this Agreement shall be given in writing and shall be
deemed effectively given upon the earliest of personal delivery, actual receipt or the third (3rd) full business day following deposit in the United States mail with postage and fees prepaid, addressed to the other Party hereto at such
Party’s address shown 

  
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below or at such other address as such Party may designate by ten (10) calendar days’ advance written notice to the other Party hereto. The addresses for notices are as follows:

  

			
	 For the Company:
	 	 John R. Simon
 Senior Vice
President, Human Resources
 Pacific Gas and Electric Company
 77 Beale Street
 P.O. Box 770000
 San Francisco, CA 94177

		
	With a copy to:	 	 Stacy Campos
PG&E Law Department
 P.O. Box 7442
 San Francisco, CA 94120

		
	For Executive:	 	 John S. Keenan
 104
Genoe’s Point Road SW
 Supply, North Carolina 28462

		
	With a copy to:	 	 Raymond N. Stella Erlach

Law Offices of Raymond N. Stella Erlach
 275
Battery Street, Suite 2600
 San Francisco, CA 94111

 12.    Waiver. The failure of either Party to this Agreement to enforce
any of its terms, provisions or covenants shall not be construed as a waiver of the same or of the right of such Party to enforce the same. Waiver by either Party hereto of any breach or default by the other Party of any term or provision of this
Agreement shall not operate as a waiver of any other breach or default. 
 13.    Governing Law. This
Agreement and all rights, duties and remedies hereunder shall be governed by and construed and enforced in accordance with the laws of the State of California, without reference to its conflict of law rules. 

14.    Successors and Assigns. This Agreement shall be binding upon, and shall inure to the benefit of, the
Parties and their respective heirs, administrators, representatives, executors, successors and assigns. Notwithstanding the foregoing, Executive shall not assign any of his rights or delegate any of his obligations under this Agreement without
obtaining the prior express written consent of the Company. 
 15.    Authority. This Agreement is
subject to the approval of the Compensation Committee of the Board of Directors of PG&E Corporation. Upon such approval, the Company has full authority to enter into and to bind itself to this Agreement. 

  
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 16.    Construction. The parties acknowledge that they and their
respective counsel have reviewed this Agreement in its entirety and have had a full and fair opportunity to negotiate its terms. Each Party therefore waives all applicable rules of construction that any provision of this Agreement should be
construed against its drafter, and agrees that all provisions of the Agreement shall be construed as a whole, according to the fair meaning of the language used. 
 17.    Counterparts. This Agreement may be executed in two or more counterparts, each of which shall be deemed an original but all of which together shall constitute one and the
same instrument. 
 18.    Acknowledgement The Parties acknowledge that they have each read this
Agreement and understand its terms. By signing this Agreement, the Parties acknowledge and agree that they enter into this Agreement knowingly, voluntarily and without coercion, and that they do not rely, and have not relied, on any fact,
representation, statement or assumption other than as specifically set forth in this Agreement. 
 IN WITNESS WHEREOF, the
Parties hereto have executed this Agreement on the date first written above. 
 [SIGNATURES FOLLOW] 

  
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	PACIFIC GAS AND ELECTRIC COMPANY	 		 	EXECUTIVE
		 		 	
					
		 		 		 	By:	 	JOHN S. KEENAN
	By:	 	CHRISTOPHER P. JOHNS	 		 		 	John S. Keenan
		 	Christopher P. Johns	 		 		 	
		 	President	 		 	Date:   April 5, 2011        
		 		 		 		 	
	Date:  April 5, 2011        	 		 		 	
		 		 		 	
		 		 		 	
	By:	 	JOHN R. SIMON	 		 		 	
		 	John R. Simon	 		 		 	
		 	Senior Vice President,
Human Resources	 		 		 	
		 		 		 		 	
	Date:  April 5, 2011        	 		 		 	

  
 8Letter regarding Compensation Agreement - Austin

 Exhibit 10.7 

 

					
	 

	  		  	
		  	 John R. Simon
 Senior Vice President
 Human Resources
	  	 One Market, Spear Tower
 Suite 2400
 San Francisco, CA 94105

 April 27, 2011 

Karen Austin 
 930 South Shore Drive

 Village of Lakewood, IL 60014 
 Dear
Karen: 
 On behalf of PG&E Corporation, I am pleased to offer you the position of Senior Vice President, Chief Information Officer,
reporting to Chris Johns, President. This offer is subject to approval of the PG&E Corporation Board of Directors’ Compensation Committee and your election as an Officer by our Board. Subject to these Board actions we are assuming a start
date of June 1, 2011. If we need to adjust our assumption, please let me know. 
 Your total annual compensation package will consist of the
following: 
  

	1.	 An annual base salary of $500,000 ($41,666/month) subject to ordinary withholdings. 

 

	2.	 A one time sign on bonus of $500,000, which will be paid on your first payroll check, subject to ordinary withholdings. Should you decide to resign from the
Company within two years of your start date, you will repay the Company this sign on bonus, on a prorated basis. 

  

	3.	 You are eligible to participate in the company’s Short-Term Incentive Plan (STIP) with a target participation rate of 50% percent of your eligible
earnings (i.e., base salary) received during the plan year. You must be on PG&E’s active payroll as of October 1 to be eligible for a payout for that year. The STIP is an at-risk component of pay that rewards employees annually, and is
tied to company and individual performance. Thus, STIP awards are not guaranteed. The Compensation Committee retains full discretion to determine and award STIP payments to PG&E employees. 

 

	4.	 You are eligible to receive a new hire award under PG&E Corporation’s Long-Term Incentive Plan (LTIP). Your initial LTIP award will consist of 50
percent restricted stock units that vest over a four-year period, and 50 percent performance shares that vest at the end of a three year performance period. (The value of the performance shares will be determined at the end of the performance period
based on the performance of PG&E Corporation stock relative to a group of twelve comparable companies). The date of your LTIP award will occur on the later of your hire date or the date your award is approved by the Compensation Committee;
however if your award date occurs during a “trading blackout” period, then the award date will be the first business day after the trading blackout ends. 

Your LTIP award will have an initial value of $450,000. This value is used for the purpose of determining the number of units of
your award. The ultimate value that you realize through the LTIP will depend on your employment status and the performance of PG&E Corporation common stock. You will receive additional details on the LTIP at the time of your award. 

 

	5.	 You will also receive an additional one-time LTIP award with an initial value of 

 Karen Austin 
 April 25, 2011 
 Page 2 
  

	 	 $400,000. This award will be comprised of all restricted stock units. 50 percent of the award will vest on the first anniversary of the grant date, and 50
percent will vest on the second anniversary of the grant date. The date of your LTIP award will occur on the later of your hire date or the date your award is approved by the Compensation Committee; however if your award date occurs during a
“trading blackout” period, then the award date will be the first business day after the trading blackout ends. 

  

	6.	 As an employee, you also will be eligible for additional LTIP awards, which typically are granted in March of each year. These LTIP awards consist of an equal
number of restricted stock units (which also vest over a four-year period, with a larger percentage vesting in the 4th year) and performance shares (the value of which will be determined in the same way mentioned above). The Compensation Committee retains full discretion as to the approval of LTIP award form, amounts, and terms.

  

	7.	 Participation in the PG&E Corporation Retirement Savings Plan (RSP), a 401(k) savings plan. You will be eligible to contribute as much as 50% of your
salary on either a pre-tax or after-tax basis. We will match contributions up to 6% of your salary at 75 cents on each dollar contributed. All of the above contributions are subject to the applicable legal limits. 

With respect to benefits at retirement, conditioned upon meeting plan requirements, you also will be eligible for retirement
benefits under the Company’s retirement (pension), post-retirement life insurance and retiree medical plans. 
  

	8.	 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. This benefit will be offset by benefits provided under
the qualified retirement plan. 

  

	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. The Company will provide you with full matching contributions that cannot be provided through the RSP due to IRS limitations imposed on highly compensated employees.

  

	10.	 An annual vacation allotment of four weeks, subject to future increases based on length of service. For your first year, the vacation allotment will be
prorated based on your date of hire. In addition, Pacific Gas and Electric Company recognizes ten paid company holidays and provides three floating holidays and two weeks of sick leave immediately upon hire. 

 

	11.	 An annual perquisite allowance of $20,000 to be used in lieu of individual authorizations for cars and memberships in clubs and civic organizations. If your
start date ends up being after June 30, 2011, you will receive 50% of this amount ($10,000) for 2011. 

  

	12.	 Participation in PG&E’s health benefits program which 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 and upon receipt of completed enrollment forms. 

 Karen Austin 
 April 25, 2011 
 Page 3 
  

	13.	 Participation in the Employee Discount program after six months of continuous service following your date of hire. The program offers participants a 25%
discount on electricity and gas rates for their primary residence. In order to receive this benefit, you must (a) live within Pacific Gas and Electric Company’s service territory and (b) have the service in your name at your primary
residence. 

  

	14.	 As an Officer of PG&E, you will be subject to the PG&E Corporation severance policy, which provides for a cash payment of up to two times base salary
plus target STIP, 24 months of continued LTIP vesting, 18 months of company paid COBRA premiums and 12 months of outplacement counseling. 

  

	15.	 Our employment offer also includes a comprehensive executive relocation package. The major components include reimbursement of the costs associated with the
sale and purchase of your principal residence, the move of your household goods, two house hunting trips, temporary living expenses and a final trip to San Francisco. Some of our relocation benefits may constitute additional income to you and are
subject to personal income tax. Our director of relocation Denise Nicco will be in touch with you soon. 

Additionally, we will provide an annual payment of $100,000 for 3 years, to assist in the transition to higher housing costs. The
payment will coincide with the first mortgage payment. 
 The subsidy is considered income and will be subject to all
appropriate withholding taxes. The taxes are your responsibility. 
 This offer is contingent upon your passing a comprehensive background
verification 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. 
 We look forward to you joining our team. 
 Sincerely, 

 

			
	
	
	 John Simon
 Sr. Vice President, Human
Resources

 Please acknowledge your acceptance of this offer and the terms of this letter by signing the
original, providing the information requested, and returning it to me. It is important to note that you will be an employee-at-will. This means that either you or PG&E Corporation may end your employment at any time, with or without cause, and
with or without notice. 
  

									
		 	 KAREN AUSTIN
	 	 	 	4-29-11            	 	
		 	Signature	 		 	Date    	 	
					
		 	xxx-xx-xxxx	 		 	09-25-61	 	
		 	Social Security No.	 		 	Date of Birth

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