Document:

EXHIBIT 10.4

 

	

 

	 	
John R. Simon

Senior Vice President

Human Resources

	
77 Beale Street,

32nd Floor

San Francisco, CA 94105

 

	 	 

BY EMAIL

March 11, 2015

Julie M. Kane, Esq.

# #### ####

########## ## #####

Dear Julie:

On behalf of PG&E Corporation (PG&E), I am pleased to offer you the position of Senior Vice President, Chief Ethics and Compliance Officer (CECO). As the CECO, you will report to Tony Earley, our Chairman and CEO. In addition you also will report, on a dotted line basis, to the chair of the Audit Committee of the PG&E board of directors (or another board committee chair if our board assigns primary compliance oversight responsibilities to another board committee).

As an extra measure of assurance, we commit to make no changes to the CECO reporting relationships for at least 5 years from your start date (beyond any change in board committee oversight).

This offer is designed to reflect the terms we have discussed. It is subject to your completing successfully our background and drug screen processes and your eligibility to work in the United States.

We anticipate a start date of May 18, 2015.

You will receive the following compensation:

1.            An annual base salary of $440,000.00 ($36,666.67/month) subject to ordinary withholdings. We will evaluate your base salary annually as part of our annual pay review process.

2.            A one-time sign on bonus of $250,000.00, to be paid in your first payroll check, subject to supplemental withholdings. Should you decide to resign from the Company voluntarily within 2 years of your start date and without "good reason" (for purposes of this letter defined as any material breach of this letter agreement by PG&E that is not fully cured within 30 days after you deliver a written notice to PG&E that describes the breach in reasonable detail and requests cure) you agree to repay the Company this sign on bonus on a prorated basis, with the proration based on the number of days left in the 2 year period when your employment terminated.

3.            Participation in the Company's Short-Term Incentive Plan (STIP) with a target participation rate of 55% percent of your eligible earnings (meaning your base salary) received during the plan 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 of our board of directors retains full discretion to determine and award STIP payments to PG&E employees.

4.            Two awards under PG&E's Long-Term Incentive Plan (LTIP).

The first award will have an initial value of $600,000 and be allocated based on grant date fair value -- 50% to performance shares with a relative TSR measure, 10% to performance shares with equally weighted safety and affordability measures and 40% to restricted stock units (RSUs). The performance shares will vest upon certification of the performance results by the Compensation Committee following completion of a 3-year performance period. The RSUs will vest over a 3-year period with one-third vesting after each of the first three anniversaries of the grant date.

The second award will have an initial value of $150,000 and be in the form of RSUs that vest over a 2-year period, one-half on each of the first two anniversaries of the grant date.

Both LTIP awards will occur on your hire date; however, if this date occurs during a "trading blackout" period, then the award date will be the first business day after the trading blackout ends.  Both awards will fully vest (subject, in the case of the performance shares in the first award, to the extent to which the performance criteria are actually achieved) on any termination of your employment by you with "good reason" or by PG&E not for "cause" (as defined in the enclosed Officer Severance Policy, except that no statement made, or action taken, in the good faith performance of your duties shall be deemed to constitute "cause" for any purpose).

The initial value of each award is used for the purpose of determining the number of shares/units. The ultimate value that you realize through the LTIP will depend on your employment status, performance results for the applicable measures and the performance of PG&E Corporation common stock.  Forms of award for both awards are attached to this offer letter.

5.            Additional LTIP awards, which typically are granted to executives in March of each year. These LTIP awards consist of a mix of restricted stock units and performance shares. The Compensation Committee retains full discretion as to the approval of the form, mix, amounts and terms of additional LTIP awards.

6.            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. PG&E will match contributions up to 8% of your salary at 75 cents on each dollar contributed. All of the above contributions are subject to the applicable legal limits.

7.            Participation in the Company's retirement (cash balance pension), post-retirement life insurance and retiree medical plans, subject to eligibility terms of those plans.

8.            Participation in the Defined Contribution Executive Supplemental Retirement Plan (DC-ESRP), a non-qualified deferred compensation plan. Each time you receive base salary or a STIP payment, an amount equal to 7% of each payment will be credited to your DC-ESRP account. You will be 100% vested in your account balance on completing 3 years of service or, if earlier, on any termination of your employment by PG&E not for "cause" or by you with "good reason". Your account balance will accrue earnings/losses based on your choice of investment funds and will be distributed, based on your election, in one to ten annual installments commencing seven months following your employment termination.

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. PG&E will provide you with full matching contributions that cannot be provided through the RSP due to legal limitations applicable to highly compensated employees.

10.            An annual paid time off (PTO) allotment of five weeks, subject to future increases based on length of service. For your first year, the PTO allotment will be prorated based on your date of hire. In addition, PG&E provides three floating holidays immediately upon hire and recognizes ten paid company holidays.

11.            An annual perquisite allowance of $20,000, subject to ordinary withholdings. The allowance for your first year will be included in your first paycheck.

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. As a senior vice president you are also eligible to receive an annual executive health benefit with Stanford Medical Center and financial planning services, should you elect them, from a firm PG&E provides. Currently, PG&E pays 40% of financial planning services provided by AYCO, and PG&E executives pay the remaining 60%.

13.            A comprehensive relocation package, which you will be eligible to receive if you relocate your family's principal residence to, or purchase a new principal residence in, the San Francisco Bay area within 2 years of your start date. The major components include reimbursement of home sale and home purchase closing costs, the move of your household goods, two house hunting trips, $7,000 move allowance, a final trip to your new location, and corporate housing in the Bay area for up to 1 year following your start date (this 1 year period is subject to reasonable extension if necessary).

Altair, our relocation management company will be contacting you within days to provide the details of the program and to work with you through the entire relocation process.

In the event that you purchase a principal residence in the San Francisco Bay area and obtain a mortgage within 2 years of your start date, we will provide you with a $50,000 payment each year for the first 3 years of your new mortgage payments to help you transition to higher housing costs. The first payment will coincide with the first mortgage payment. The subsidy is considered income and will be subject to all applicable withholding taxes. The taxes are your responsibility.

14.            You will be an employee-at-will. This means that either you or PG&E may end your employment at any time, with or without cause, and with or without notice. In the event you are terminated without cause, you are eligible for benefits under the 2012 Officer Severance Policy.

More details on our relocation and benefits programs are attached.

Julie, we are very excited about your joining our executive team, and the great things you will accomplish at PG&E.

Yours sincerely,

/s/ John Simon

John R. Simon

Senior Vice President, Human Resources

Please acknowledge your acceptance of this offer and the terms of this letter by signing the original and returning it to me via fax (415.973.8766).

/s/ Julie Kane                                                                                                                                      3/11/15

_______________________________                                                                                                                _____________________

Signature                                                                                                                              DateEXHIBIT 10.5

PG&E CORPORATION

 2014 LONG-TERM INCENTIVE PLAN

2015 RESTRICTED STOCK UNIT AWARD FOR JULIE M. KANE

PG&E CORPORATION, a California corporation, hereby grants Restricted Stock Units to the Recipient named below.  The Restricted Stock Units have been granted under the PG&E Corporation 2014 Long-Term Incentive Plan, as amended (the "LTIP").  The terms and conditions of the Restricted Stock Units are set forth in this cover sheet and in the attached Restricted Stock Unit Agreement (the "Agreement").

Date of Grant:                                                                                           May 29, 2015

Name of Recipient:                                                                              JULIE M. KANE

Recipient's Participant ID:                                                             ########

Number of Restricted Stock Units:                                       4,489

By accepting this award, 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 award, the attached Agreement, and a copy of the prospectus describing the LTIP and the Restricted Stock Units dated March 2, 2015 and any supplement to that Prospectus.

If, for any reason, you wish to not accept this award, please notify PG&E Corporation in writing within 30 calendar days of the date of this award at ATTN: LTIP Administrator, Pacific Gas and Electric Company, 245 Market Street, N2T, San Francisco, 94105.

Attachment

PG&E CORPORATION

 2014 LONG-TERM INCENTIVE PLAN

RESTRICTED STOCK UNIT AGREEMENT

	
The LTIP and Other Agreements

	
This Agreement constitutes the entire understanding between you and PG&E Corporation regarding the Restricted Stock Units, 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 will govern.  Capitalized terms that are not defined in this Agreement are defined in the LTIP.  In the event of any conflict between the provisions of this Agreement and the PG&E Corporation Officer Severance Policy or the PG&E Corporation 2012 Officer Severance Policy, this Agreement will govern. For purposes of this Agreement, employment with PG&E Corporation means employment with any member of the Participating Company Group.

 

	
Grant of Restricted Stock Units

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

 

	
Vesting of Restricted Stock Units

	
As long as you remain employed with PG&E Corporation, the total number of Restricted Stock Units originally subject to this Agreement, as shown on the cover sheet, will vest in accordance with the below vesting schedule (the "Normal Vesting Schedule").

       May 29, 2016 – one-third of the Restricted Stock Units

       May 29, 2017 – one-third of the Restricted Stock Units

       May 29, 2018 – one-third of the Restricted Stock Units

The amounts payable upon each vesting date are hereby designated separate payments for purposes of Code Section 409A.  Except as described below, all Restricted Stock Units subject to this Agreement which have not vested upon termination of your employment will then be cancelled. As set forth below, the Restricted Stock Units may vest earlier upon the occurrence of certain events.

 

	
Dividends

	
Restricted Stock Units will accrue Dividend Equivalents in the event cash dividends are paid with respect to PG&E Corporation common stock having a record date prior to the date on which the Restricted Stock Units are settled.  Such Dividend Equivalents will be converted into cash and paid, if at all, upon settlement of the underlying Restricted Stock Units.

 

	
Settlement

	
Vested Restricted Stock Units will be settled in an equal number of shares of PG&E Corporation common stock, subject to the satisfaction of Withholding Taxes, as described below.  PG&E Corporation will issue shares as soon as practicable after the Restricted Stock Units vest (but not later than sixty (60) days after the applicable vesting date).

 

	
Voluntary Termination

	
In general, in the event of your voluntary termination, all unvested Restricted Stock Units will be cancelled on the date of termination.    However, if your voluntary termination is for "good reason," i.e., if PG&E Corporation materially breaches the terms of your March 2015 offer letter and does not cure the breach within thirty (30) days of your delivering to PG&E Corporation a written notice that describes the breach in reasonable detail and requests that PG&E Corporation cure the breach, then all unvested Restricted Stock Units will vest upon such termination.

 

	
Termination for Cause

	
If your employment with PG&E Corporation is terminated at any time by PG&E Corporation for cause, all unvested Restricted Stock Units will be cancelled on the date of termination.

For these purposes, "cause" is defined in the same manner as in the 2012 Officer Severance Policy (but will not include any statement made, or action taken, in the good faith performance of your duties).

 

	
Termination other than for Cause

	
If your employment with PG&E Corporation is terminated by PG&E Corporation other than for cause, all unvested Restricted Stock Units will vest immediately.

 

	
Death/Disability

	
In the event of your death or Disability while you are employed, all of your Restricted Stock Units will vest upon the date of such event.

 

	
Termination Due to Disposition of Subsidiary

	
If your employment is terminated (other than for cause or your voluntary termination) (1) 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) coincident with the sale of all or substantially all of the assets of a subsidiary of PG&E Corporation, then your Restricted Stock Units will vest 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 a substantially equivalent award in substitution for the Restricted Stock Units subject to this Agreement.

If the Restricted Stock Units are neither assumed nor continued by the Acquiror or if the Acquiror does not provide a substantially equivalent award in substitution for the Restricted Stock Units, all of your unvested Restricted Stock Units will vest immediately preceding and contingent on, the Change in Control.

 

	
Termination In Connection with a Change in Control

	
In the event of a separation in connection with a Change in Control within two years following the Change in Control (other than termination for cause, or your voluntary termination other than for "good reason"), your Restricted Stock Units (to the extent they did not previously vest upon, for example, failure of the Acquiror to assume or continue this award) will vest on the date of such separation.  PG&E Corporation has the sole discretion to determine whether termination of your employment was made in connection with a Change in Control.

 

	
Delay

	
PG&E Corporation will delay the issuance of any shares of common stock to the extent it is necessary to comply with Section 409A(a)(2)(B)(i) of the Code (relating to payments made to certain "key employees" of certain publicly-traded companies); in such event, any shares of common stock to which you would otherwise be entitled during the six (6) month period following the date of your "separation from service" under Section 409A (or shorter period ending on the date of your death following such separation) will instead be issued on the first business day following the expiration of the applicable delay period.

 

	
Withholding Taxes

	
The number of shares of PG&E Corporation common stock that you are otherwise entitled to receive upon settlement of Restricted Stock Units will be reduced by a number of shares having an aggregate Fair Market Value, as determined by PG&E Corporation, equal to the amount of any Federal, state, or local taxes of any kind required by law to be withheld by PG&E Corporation in connection with the Restricted Stock Units determined using the applicable minimum statutory withholding rates, including social security and Medicare taxes due under the Federal Insurance Contributions Act and the California State Disability Insurance tax ("Withholding Taxes").  If the withheld shares were not sufficient to satisfy your minimum Withholding Taxes, you will be required to pay, as soon as practicable, including through additional payroll withholding, any amount of the Withholding Taxes that is not satisfied by the withholding of shares described above.

 

	
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."

Notwithstanding the foregoing, if the leave of absence exceeds six (6) months, and a return to service upon expiration of such leave is not guaranteed by statute or contract, then you will be deemed to have had a "separation from service" for purposes of any Restricted Stock Units that are settled hereunder upon such separation.  To the extent an authorized leave of absence is due to a medically determinable physical or mental impairment that can be expected to result in death or to last for a continuous period of at least six (6) months and such impairment causes you to be unable to perform the duties of your position of employment or any substantially similar position of employment, the six (6) month period in the prior sentence will be twenty-nine (29) months.

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

	
You will not have voting rights with respect to the Restricted Stock Units until the date the underlying shares are issued (as evidenced by appropriate entry on the books of PG&E Corporation or its duly authorized transfer agent).

 

	
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.

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