Document:

PG&E Corporatio 2006 Long Term Incentive Plan Restricted Stock Grant

    

    Exhibit
      10.39

     

    PG&E
      CORPORATION

     

    2006
      LONG-TERM INCENTIVE PLAN

     

    RESTRICTED
      STOCK GRANT

     

    PG&E
      CORPORATION,
      a
      California corporation, hereby grants shares of Restricted Stock to the
      Recipient named below. The shares of Restricted Stock have been granted under
      the PG&E Corporation 2006 Long-Term Incentive Plan, as amended on February
      15, 2006 and December 20, 2006 (the “LTIP”). The terms and conditions of the
      Restricted Stock are set forth in this cover sheet and in the attached
      Restricted Stock Agreement (the “Agreement”).

     

     

    Date
      of
      Grant:  January
      3, 20071 

     

    Name
      of
      Recipient:                                                                                                                            

     

    Last
      Four
      Digits of Recipient’s Social Security Number:                                                                 

     

    Number
      of
      Shares of Restricted Stock Granted:                                                                                

     

    

     

    By
      signing this cover sheet, you agree to all of the terms and conditions described
      in the attached Agreement. You and PG&E Corporation agree to execute such
      further instruments and to take such further action as may reasonably be
      necessary to carry out the intent of the attached Agreement. You are also
      acknowledging receipt of this Grant, the attached Agreement, and a copy of
      the
      prospectus describing the LTIP and the Restricted Stock dated January 1,
      2007.

     

    

     

    Recipient:                                                                                                                                           

                    (Signature)

    

    

    Attachment
      

     

    

     

    Please
      sign and return to PG&E Corporation, Human Resources,

    One
      Market, Spear Tower, Suite 400, San Francisco, California
      94105

     

    

     

    

      

      
        
          	
                  1 

                	
                  Due
                    to the death of former President Gerald Ford on December 26,
                    2006, the
                    federal government declared January 2, 2007 as a national day
                    of mourning.
                    All federal offices and the New York Stock Exchange were closed
                    that day.
                    Thus, the date of grant for the Restricted Stock is January 3,
                    2007.

                

        

      

    

     

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    

    PG&E
      CORPORATION

     

    2006
      LONG-TERM INCENTIVE PLAN

     

    RESTRICTED
      STOCK AGREEMENT

     

    
      	
              The
                LTIP and Other Agreements

            	
              This
                Agreement constitutes the entire understanding between you and PG&E
                Corporation regarding the Restricted Stock, 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. Capitalized terms
                that are
                not defined in this Agreement are defined in the LTIP. For purposes
                of
                this Agreement, employment with PG&E Corporation shall mean employment
                with any member of the Participating Company Group.

            
	
              Grant
                of Restricted Stock

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

            
	
              Lapse
                of Restrictions 

            	
              As
                long as you remain employed with PG&E Corporation, the restrictions
                will lapse as to 20 percent of the total number of shares of Restricted
                Stock originally subject to this Agreement, as shown above on the
                cover
                sheet, on the first business day of January of each of the first,
                second
                and third years following the Date of Grant. The restrictions will
                lapse
                as to an additional 40 percent of the total number of shares of Restricted
                Stock on the first business day of January of the fifth year following
                the
                Date of Grant; provided, however, that the restrictions will lapse
                as to
                this 40 percent on the first business day of January of the third
                year
                following the Date of Grant if PG&E Corporation’s performance in total
                shareholder return (“TSR”) is at or above the 75th
                percentile for the prior three calendar years as compared with the
                comparator group established from time to time by PG&E Corporation.
                (Each lapse day is an “Annual Lapse Date”). Except as described below, all
                shares of Restricted Stock subject to this Agreement as to which
                the
                restrictions have not lapsed shall be forfeited upon termination
                of your
                employment. 

              To
                the extent this Agreement provides for the continued lapse of restrictions
                following the termination of employment, such continued lapse shall
                be
                subject to your continued compliance with certain post-employment
                restrictions.

            
	
              Voluntary
                Termination

            	
              In
                the event that you terminate your employment with PG&E Corporation
                voluntarily, you will automatically forfeit to PG&E Corporation all of
                the shares of Restricted Stock as to which the restrictions have
                not
                lapsed subject to this Agreement as of the date of such
                Termination.

            

    

    

    
      
        
           

        

        
          A-1

          
            

          

        

        
           

        

      

    

    

    

    
      	
              Termination
                for Cause

            	
              If
                your employment with PG&E Corporation is terminated by PG&E
                Corporation for cause, you will automatically forfeit to PG&E
                Corporation all shares of Restricted Stock as to which the restrictions
                have not lapsed subject to this Agreement as of the date of such
                termination. 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 restrictions on your
                Restricted Stock lapse, and you are an officer in Bands 1-5, the
                restrictions on your outstanding shares of Restricted Stock that
                would
                have lapsed during the period of the “Severance Multiple” under the
                applicable severance policy shall continue to lapse pursuant to the
                regular lapse schedule (or sooner, to the extent described below
                in
                connection with a Change in Control during such period). In the event
                of
                your involuntary termination other than for cause, if you are not
                an
                officer in Bands 1-5, the restrictions on your outstanding shares
                of
                Restricted Stock that would have lapsed within 12 months following
                such
                termination will continue to lapse pursuant to the regular lapse
                schedule
                (or sooner, in the event of a Change in Control during such period).
                All
                other outstanding shares of Restricted Stock shall automatically
                be
                forfeited to PG&E Corporation upon such
                termination.

            
	
              Retirement

            	
              In
                the event of your Retirement, the restrictions on your outstanding
                shares
                of Restricted Stock will continue to lapse as though your employment
                had
                continued. 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, the
                restrictions on all of your shares of Restricted Stock shall lapse
                on the
                next Annual Lapse Date. In the event of a Change in Control after
                such
                termination and before such next Annual Lapse Date, the restrictions
                as to
                all shares of Restricted Stock shall immediately lapse to the extent
                described below under “Change in
                Control.”

            

    

    

    
      
        
           

        

        
          A-2

          
            

          

        

        
           

        

      

    

    

    

    
      	
              Termination
                Due to Disposition of Subsidiary

            	
              (1)
                If 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 Internal Revenue Code of
                1986, as
                amended (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, the restrictions on all shares of Restricted Stock shall
                lapse in the same manner as for a “Termination other than for cause”
                described above.

            
	
              Change
                in Control

            	
              In
                the event of a Change in Control, the surviving, continuing, successor,
                or
                purchasing corporation or other business entity or parent thereof,
                as the
                case may be (the “Acquiror”),
                may, without your consent, either assume or continue PG&E
                Corporation’s rights and obligations under this Agreement or provide
                substantially equivalent awards associated with the Acquiror’s stock. If
                this Award is neither assumed nor continued by the Acquiror or if
                the
                Acquiror does not provide a substantially equivalent award, the
                restrictions on all of your outstanding shares of Restricted Stock
                shall
                automatically lapse and become nonforfeitable immediately preceding,
                and
                contingent on, the Change in Control of PG&E Corporation.

              If
                the Acquiror assumes or continues PG&E Corporation’s rights and
                obligations under this Agreement or substitutes a substantially equivalent
                award, TSR shall be calculated by aggregating (a) the TSR of PG&E
                Corporation for the period from January 1 of the year of the grant
                to the
                date of the Change in Control, and (b) the TSR of the Acquiror from
                the
                date of the Change in Control to the end of the calendar year preceding
                the third Annual Lapse Date. 

            
	
              Termination
                In Connection with a Change in Control 

            	
              If
                your employment is terminated in connection with a Change in Control
                within three months before the Change in Control occurs or within
                two
                years following the Change in Control, the restrictions on all of
                your
                outstanding shares of Restricted Stock (to the extent the restrictions
                did
                not previously lapse upon failure of the Acquiror to assume or continue
                this Award) shall lapse and become nonforfeitable on the date of
                termination of your employment. PG&E Corporation shall have the sole
                discretion to determine whether termination of your employment was
                made in
                connection with a Change in Control.

            

    

    

    
      
        
           

        

        
          A-3

          
            

          

        

        
           

        

      

    

    

    

    
      	
              Escrow

            	
              The
                certificates for the Restricted Stock shall be deposited in escrow
                with
                the Corporate Secretary of PG&E Corporation to be held in accordance
                with the provisions of this paragraph. Each deposited certificate
                shall be
                accompanied by any assignment documents PG&E Corporation may require
                you to execute. The deposited certificates shall remain in escrow
                until
                such time as the certificates are to be released or otherwise surrendered
                for cancellation as discussed below.

              All
                dividends, if any, on the Restricted Stock shall be held in escrow
                and
                subject to the same restrictions as the shares to which they relate.
                

            
	
              Release
                of Shares and Withholding Taxes

            	
              The
                shares of Restricted Stock held in escrow hereunder shall be subject
                to
                the following terms and conditions relating to their release from
                escrow
                or their surrender to PG&E Corporation:

              ·  When
                the restrictions as to your shares of Restricted Stock lapse as described
                above, the certificates for such shares shall be released from escrow
                and
                delivered to you, at your request within thirty (30) days of the
                applicable Annual Lapse Date.

              ·  Upon
                termination of your employment, any shares of Restricted Stock as
                to which
                the restrictions have not lapsed shall be forfeited and automatically
                surrendered to PG&E Corporation as provided herein.

              Note
                that you must make arrangements acceptable to PG&E Corporation to
                satisfy withholding or other taxes that may be due before your shares
                will
                be released to you. If you so elect, PG&E Corporation will assist you
                in selling your shares through a broker so that you can use the sales
                proceeds to satisfy applicable taxes. You will receive the remaining
                proceeds in cash. However, if you wish to receive the stock certificates
                in lieu of selling your shares, you will need to make arrangements
                to pay
                the applicable taxes either by check or through payroll deduction.
                PG&E Corporation will notify you about how to instruct PG&E
                Corporation to sell your shares when the restrictions lapse or make
                other
                arrangements.

            

    

    

    
      
        
           

        

        
          A-4

          
            

          

        

        
           

        

      

    

    

    

    
      	
              Code
                Section 83(b) Election

            	
              Under
                Section 83(a) of the Code, the Fair Market Value of the Restricted
                Stock
                on the date any forfeiture restrictions applicable to such Restricted
                Stock lapse will be reportable as ordinary income at that time. For
                this
                purpose, “forfeiture restrictions” include surrender to PG&E
                Corporation of Restricted Stock as described above. You may elect
                to be
                taxed at the time the Restricted Stock is granted to you, rather
                than when
                the restrictions lapse by filing an election under Section 83(b)
                of the
                Code with the Internal Revenue Service within thirty (30) days after
                the
                Date of Grant. Failure to make this filing within the thirty (30)
                day
                period will result in the recognition of ordinary income by you (in
                the
                event the Fair Market Value of the Restricted Stock increases after
                the
                date of purchase) as the forfeiture restrictions lapse. YOU
                ACKNOWLEDGE THAT IT IS YOUR SOLE RESPONSIBILITY, AND NOT PG&E
                CORPORATION’S, TO FILE A TIMELY ELECTION UNDER CODE SECTION 83(b). YOU ARE
                RELYING SOLELY ON YOUR OWN ADVISORS WITH RESPECT TO THE DECISION
                AS TO
                WHETHER OR NOT TO FILE A CODE SECTION 83(b)
                ELECTION.

            
	
              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
                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.

            
	
              Voting
                and Other Rights

            	
              Subject
                to the terms of this Agreement, you shall have all the rights and
                privileges of a shareholder of PG&E Corporation while the Restricted
                Stock is held in escrow, including the right to vote. As described
                above,
                all dividends, if any, on the Restricted Stock shall be held in escrow
                and
                subject to the same restrictions as the shares to which they relate.
                

            
	
              Restrictions
                on

              Issuance

            	
              PG&E
                Corporation will not issue any Restricted Stock if the issuance of
                such
                Restricted Stock at that time would violate any law or
                regulation.

            

    

    

    
      
        
           

        

        
          A-5

          
            

          

        

        
           

        

      

    

    

    

    
      	
              Restrictions
                on Resale and Hedge Transactions 

            	
              By
                signing this Agreement, you agree not to sell any Restricted Stock
                before
                the restrictions lapse or sell any shares acquired under this grant
                at a
                time when applicable laws, regulations or Company or underwriter
                trading
                policies prohibit sale. In particular, in connection with any underwritten
                public offering by PG&E Corporation of its equity securities pursuant
                to an effective registration statement filed under the Securities
                Act of
                1933, you shall not sell, make any short sale of, loan, hypothecate,
                pledge, grant any option for the purchase of, or otherwise dispose
                or
                transfer for value or agree to engage in any of the foregoing transactions
                with respect to any shares acquired under this grant without the
                prior
                written consent of PG&E Corporation or its underwriters, for such
                period of time after the effective date of such registration statement
                as
                may be requested by PG&E Corporation or the underwriters.

              If
                the sale of shares acquired under this grant is not registered under
                the
                Securities Act of 1933, but an exemption is available which requires
                an
                investment or other representation and warranty, you shall represent
                and
                agree that the Shares being acquired are being acquired for investment,
                and not with a view to the sale or distribution thereof, and shall
                make
                such other representations and warranties as are deemed necessary
                or
                appropriate by PG&E Corporation and its counsel.

              By
                your acceptance of the grant, you agree that while the Restricted
                Stock is
                subject to restrictions, you will not enter into a corresponding
                hedging
                transaction relating to PG&E Corporation’s stock nor engage in any
                short sale of PG&E Corporation’s stock. This prohibition shall not
                apply to transactions effected through PG&E Corporation’s benefit
                plans that provide an opportunity to invest in Company stock or which
                provide compensation based on the price of Company stock.
                

            
	
              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.

            

    

    

    
      
        
           

        

        
          A-6

          
            

          

        

        
           

        

      

    

    

    

    
      	
              Legends

            	
              All
                certificates that may be issued to represent the Restricted Stock
                issued
                under this grant shall, where applicable, have endorsed thereon the
                following legends:

              “THE
                SHARES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO CERTAIN RESTRICTIONS
                ON TRANSFER SET FORTH IN AN AGREEMENT BETWEEN PG&E CORPORATION AND THE
                REGISTERED HOLDER, OR HIS OR HER PREDECESSOR IN INTEREST. A COPY
                OF SUCH
                AGREEMENT IS ON FILE AT THE PRINCIPAL OFFICE OF PG&E CORPORATION AND
                WILL BE FURNISHED UPON WRITTEN REQUEST TO THE CORPORATE SECRETARY
                OF
                PG&E CORPORATION BY THE HOLDER OF RECORD OF THE SHARES REPRESENTED BY
                THIS CERTIFICATE.”

            
	
              Applicable
                Law

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

            

    

     

    By
      signing the cover sheet of this Agreement, you agree to all of the terms and
      conditions described above and in the LTIP.

    
      
         

      

      
        A-7Form of Performance Share Agreement for 2007 grantss under PG&E Corporation 2006 LTIP

    Exhibit
      10.44

     

    PG&E
      CORPORATION

     

    2006
      LONG-TERM INCENTIVE PLAN

     

    PERFORMANCE
      SHARE GRANT

     

    PG&E
      CORPORATION,
      a
      California corporation, hereby grants Performance Shares to the Recipient named
      below. The Performance Shares have been granted under the PG&E Corporation
      2006 Long-Term Incentive Plan, as amended on February 15, 2006 and December
      20,
      2006 (the “LTIP”). The terms and conditions of the Performance Shares are set
      forth in this cover sheet and the attached Performance Share Agreement (the
      “Agreement”).

     

     

    Date
      of
      Grant:  January
      3, 20071 

     

    Name
      of
      Recipient:                                                                                                             

     

    Last
      Four
      Digits of Recipient’s Social Security
      Number:           
                                

     

    Number
      of
      Performance
      Shares:                                                                                    

     

    

     

    By
      signing this cover sheet, you agree to all of the terms and conditions described
      in the attached Agreement. You and PG&E Corporation agree to execute such
      further instruments and to take such further action as may reasonably be
      necessary to carry out the intent of the attached Agreement. You are also
      acknowledging receipt of this Grant, the attached Agreement, and a copy of
      the
      prospectus describing the LTIP and the Performance Shares dated January 1,
      2007.

     

    

     

    Recipient:                                                                                                                                                 
      

                                                                                  
      (Signature)

    

    

    Attachment

     

    

     

    Please
      sign and return to PG&E Corporation, Human Resources,

     

    One
      Market, Spear Tower, Suite 400, San Francisco, California
      94105

     

    

     

    

      

      
        
          	
                  1 

                	
                  Due
                    to the death of former President Gerald Ford on December 26,
                    2006, the
                    federal government declared January 2, 2007 as a national day
                    of mourning.
                    All federal offices and the New York Stock Exchange were closed
                    that day.
                    Thus, the date of grant for the Performance Shares is January
                    3,
                    2007.

                

        

      

    

     

    
 

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    PG&E
      CORPORATION 2006 LONG-TERM INCENTIVE PLAN

     

    PERFORMANCE
      SHARE AGREEMENT

     

    
      	
              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. Capitalized terms
                that are
                not defined in this Agreement are defined in the LTIP. 

               

              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.

            

    

    
      
        
        

      

      
        A-1

        
          

        

      

      
        
        

      

    

    

    
      	
              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 group2 
                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 in
                the top rank 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, if any, will be made as soon as practicable following
                the date that the Nominating, Compensation, and Governance Committee
                of
                the PG&E Corporation Board of Directors certifies the TSR percentile
                rank over the Performance Period pursuant to Section 10.5(a) of the
                LTIP.
                

               

            
	
              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 preceding paragraph, you shall also 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.

            

    

    
      
        

      

    

    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. 

    
      
        
        

      

      
        A-2

        
          

        

      

      
        
        

      

    

    

    
      	
              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 completion
                of the Performance Period based on the same formula applied to active
                employees. You shall also 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. You
                shall also 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 completion
                of
                the Performance Period based on the same formula applied to active
                employees. You shall also 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

            	
              (1)
                If 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 Internal Revenue Code of
                1986, as
                amended, 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 completion
                of the Performance Period based on the same formula applied to active
                employees. You shall also 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.
                

               

            
	
              Change
                in Control

            	
              In
                the event of a Change in Control, the surviving, continuing, successor,
                or
                purchasing corporation or other business entity or parent thereof,
                as the
                case may be (the “Acquiror”),
                may, without your consent, either assume or continue PG&E
                Corporation’s rights and obligations under this Agreement or provide a
                substantially equivalent award in substitution for the Performance
                Shares
                subject to this Agreement. If the Acquiror assumes or continues PG&E
                Corporation’s rights and obligations under this Agreement or substitutes a
                substantially equivalent award, TSR shall be calculated by aggregating
                (a)
                the TSR of PG&E Corporation for the period from January 1 of the year
                of grant to the date of the Change in Control, and (b) the TSR of
                the
                Acquiror from the date of the Change in Control to the Vesting Date.
                The
                payout percentage reflected in the table set forth above for the
                highest
                percentile TSR performance met or exceeded when calculated on that
                basis,
                and considering any adjustments to the comparator group, will be
                used to
                determine the amount of the payout, if any, upon settlement of the
                assumed, continued or substituted award. 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.

              If
                this Award is neither assumed nor continued by the Acquiror or if
                the
                Acquiror does not provide a substantially equivalent award in substitution
                for the Performance Shares subject to this Agreement, all of your
                outstanding Performance Shares shall automatically vest and become
                nonforfeitable when the Change in Control of PG&E Corporation occurs
                before the Vesting Date. Such vested Performance Shares will become
                payable on the first business day of the year following the Change
                in
                Control. The payment, if any, will be based on PG&E Corporation’s TSR
                for the period from January 1 of the year of grant to the date of
                the
                Change in Control compared to the TSR of the other companies in PG&E
                Corporation’s comparator group3 
                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. 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.

            

    

    
      
        
          

        

      

      3
        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.

    

     

    
      
        
        

      

      
        A-3

        
          

        

      

      
        
        

      

    

    
      	
              Termination
                In Connection with a Change in Control

            	
              If
                your employment is terminated in connection with a Change in Control
                within three months before the Change in Control occurs or within
                two
                years following the Change in Control, all of your outstanding Performance
                Shares (to the extent they did not previously vest upon failure of
                the
                Acquiror to assume or continue this Award) shall automatically vest
                and
                become nonforfeitable on the date of termination of your employment.
                Your
                vested Performance Shares will be payable, if at all, on the first
                business day of the following year following the completion of the
                Performance Period and will be based on the same formula applied
                to active
                employees. You shall also 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.

               

              PG&E
                Corporation shall have the sole discretion to determine whether
                termination of your employment was made in connection with a Change
                in
                Control.

               

            
	
              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. 

               

            
	
              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
                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.

            

    

     

    By
      signing the cover sheet of this Agreement, you agree to all of the terms and
      conditions described above and in the LTIP. 

    

     

    
      
        
          
          

        

        
          A-4

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