Document:

Letter regarding Compensation Agreement

 Exhibit 10.1 

 

			
	 

	  	One Market, Spear Tower
		  	Suite 2400
		  	San Francisco, CA 94105
		
		  	415.267.7000

 August 8, 2011 
 Mr. Anthony F. Earley, Jr. 
 5000 Brookdale Road 

Bloomfield Hills, MI 48304 
 Dear Tony:

 On behalf of the Board of Director of PG&E Corporation, I am pleased to offer you the position of Chairman, Chief Executive Officer, and
President of PG&E Corporation. The terms of this offer, and your hire, have been approved by the independent members of the Board of Director of PG&E Corporation. We are planning a start date of September 13, 2011 (your actual start
date, the Start Date). 
 Your total annual compensation package will consist of the following: 

 

	1.	An annual base salary of $1,250,000, ($104,166.66/month) subject to ordinary withholdings. 

 

	2.	A one-time sign-on bonus of $1.5 million, which will be paid on your first payroll check, subject to ordinary withholdings. The sign-on bonus shall be subject to
repayment if you voluntarily terminate your employment or are terminated by PG&E Corporation for “cause” (as defined below) within three years of your Start Date; provided that, the obligation to repay shall be forgiven as to 1/3 of
the sign-on bonus after each anniversary of your Start Date for the first three years of service and shall be fully forgiven if you are terminated by the Company without cause or your employment terminates on account of death or disability.

  

	3.	You are eligible to participate in the company’s Short-Term Incentive Plan (STIP) with a target participation rate of 100% percent of your eligible earnings (i.e.,
base salary). You must be on PG&E’s active payroll as of October 1 to be considered for a payout for that year at the sole discretion of the Compensation Committee. For 2011, awards would be paid on a pro-rata basis. 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 an award under PG&E Corporation’s Long-Term Incentive Plan (LTIP) with respect to 2011. Your initial LTIP award
will consist of 

 Mr. Anthony F. Earley, Jr. 
 August 8, 2011 
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40% restricted stock units (RSUs) that vest over a four-year period, and 60% performance shares that vest at the end of the performance period commencing on the Start Date and ending
December 31, 2013, each subject to your continued employment with PG&E through the applicable vesting date(s). (The ultimate 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 comparable companies as determined by the Compensation Committee in its sole discretion). Your LTIP award will be awarded to you on your Start Date, unless that date occurs during a “trading
blackout” period, in which case, your LTIP award will be awarded to you on the first business day after the trading blackout ends. 

 Your LTIP award will have a grant date value of $2,000,000. 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. 
 You will vest in the LTIP awards in accordance with the same schedules normally applicable to executives. In addition, provided that you complete three years of employment with PG&E Corporation, with
respect to all LTIP grants (including future grants), you will be entitled to “pro rata vesting” in your LTIP awards in the event that your employment is terminated for reasons other than your voluntary termination or termination for cause
(defined below). As used herein, “pro rata vesting” means that your LTIP award (including any vesting you have already earned at the time of termination) will equal X (where X equals your days of service with PG&E Corporation in the
applicable vesting period (through the date of termination) divided by the potential number of days of service in the entire vesting period of the applicable LTIP award) times (a), in the case of RSUs, the number of RSUs subject to the applicable
LTIP award or (b), in the case of performance shares, the number of performance shares, if any, earned based on actual performance through the end of the normal performance period. With respect to performance shares, the pro rata portion of the
earned performance award, if any, will be paid at the same time performance shares are scheduled to be paid out to active employees. With respect to RSUs, the RSUs will continue to be settled and paid to you on the same time schedule and at the rate
that would be normally applicable (absent your termination of employment) until the pro-rated amount is exhausted. By way of illustration with respect to RSUs, if you are awarded 100 RSUs, subject to vesting and payout at the rate of 20% per
year on the first, second, and third, anniversaries of the date of grant, and 40% on the fourth anniversary, and you are terminated on the third anniversary of the date of grant year (i.e., 75% into the 4-year vesting period) at a time when you were
60% vested, you would receive an additional 15 shares of common stock on the fourth anniversary of the date of grant (representing 15% of additional vesting for a total of 75% vesting). 

 

	5.	 You will also receive an additional one-time LTIP award with an initial value of $6 million. RSUs will comprise $2.5 million of the award, which will
vest in equal annual installments on the first three anniversaries of your Start Date subject to 

  

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your continued employment with PG&E Corporation through the applicable vesting dates. Performance shares will comprise $3.5 million of the award, which will vest, to the extent earned, at the
end of a three-year performance period commencing with the Start Date subject to your continued employment with PG&E Corporation through the end of such performance period. (The ultimate 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 comparable companies as determined by the Compensation Committee). The date of your LTIP award under this paragraph 5 will occur on the same
date as the date of your LTIP award under paragraph 4 above. You will vest on a pro-rata basis (per the methodology set forth in paragraph 4 above) in this LTIP award if your employment voluntarily or involuntarily terminates during the vesting
period (other than termination by PG&E Corporation for cause), and payment of any amounts vested on account of such termination shall occur at the time and in the manner described in the last paragraph of paragraph 4, i.e., payment of vested
RSUs and performance shares will occur on the normally applicable payment dates. 

  

	6.	 You also will be eligible for additional LTIP awards, which typically are granted in March of each year. Currently, with respect to the position of
Chair, CEO, and President these LTIP awards consist 40% of RSUs (which also vest over a four-year period, with a larger percentage vesting in the 4th year) and 60% in performance shares. The Company 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 a percentage of your salary on either
a pre-tax or after-tax basis, subject to the applicable plan and legal limits. Under current plan terms, we will match contributions up to 6% of your salary at 75 cents on each dollar contributed, subject to applicable plan and legal limits.

  

	8.	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, subject to the terms of such plans. 

  

	9.	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. Vesting in the SERP is immediate. 

  

	10.	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. 

  

 Mr. Anthony F. Earley, Jr. 
 August 8, 2011 
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	11.	You have agreed that you will not participate in the PG&E Officer Severance Policy. In exchange, PG&E Corporation agrees to pay your reasonable relocation costs
for relocation to Detroit following employment. All such payments will be made no later than the calendar year following the calendar year of your separation from service (within the meaning of Section 409A of the Internal Revenue Code of 1986,
as amended). 

  

	12.	For the purpose of this agreement, “cause” is based on the definition in the PG&E Officer Severance Policy and means that PG&E Corporation acting in
good faith based upon information then known to it, determines that you have engaged in, committed, or are responsible for (1) serious misconduct, gross negligence, theft, or fraud against PG&E Corporation and/or its affiliates;
(2) refusal or unwillingness to perform your duties; (3) inappropriate conduct in violation of PG&E Corporation’s equal employment opportunity policy; (4) conduct which reflects adversely upon, or making any remarks
disparaging of, PG&E Corporation, its Board of Directors, Officers, or employees, or its affiliates or subsidiaries; (5) insubordination; (6) any willful act that is likely to have the effect of injuring the reputation, business, or
business relationship of PG&E Corporation or its subsidiaries or affiliates; (7) violation of any fiduciary duty; or (8) breach of any duty of loyalty. 

 

	13.	An annual vacation allotment of four weeks, subject to future increases based on length of service in accordance with the applicable policies of PG&E Corporation.
In addition, PG&E Corporation recognizes ten paid company holidays and provides three floating holidays immediately upon hire and at the beginning of each year. For the balance of 2011, following your Start Date, you will be allotted two weeks
of vacation. 

  

	14.	An annual perquisite allowance of $35,000 to be used in lieu of individual memberships in clubs and civic organizations. You will receive a prorated portion of this
amount for your first year. 

  

	15.	Participation in PG&E’ Corporation’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 your Start Date and upon receipt of completed enrollment forms. 

  

	16.	Our employment offer also includes a comprehensive executive relocation assistance package. The major components include reimbursement of the closing costs associated
with the sale and purchase of your principal residence, the move of your household goods, two house hunting trips, up to six months of corporate housing (if you are still financially responsible for the former residence), reimbursement of final trip
costs to San Francisco, and a $7,000 allowance. Some of our relocation benefits may constitute additional income to you and are subject to personal income tax. Other than benefits that relate to purchasing a home, the foregoing benefits will be
available to you if you elect to lease rather than purchase a home in the San Francisco Bay Area. 

  

 Mr. Anthony F. Earley, Jr. 
 August 8, 2011 
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 Additionally, while you are employed with PG&E Corporation, if you finance the
purchase a home in the San Francisco Bay Area in connection with your relocation, we will provide you an annual payment of $100,000 for up to 3 years, to assist with your mortgage expenses in connection with such purchase in accordance with the
applicable PG&E Corporation policy. 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. 
 Nothing in this letter shall limit
PG&E Corporation’s ability to amend its employee benefit programs, plans, policies and arrangements in accordance with their terms. 

This offer is contingent upon your passing a comprehensive background verification, including a credit check, security clearance assessment and a
standard drug analysis test. We will also need to verify your eligibility to work in the United States based on applicable immigration laws. 

Tony, we very much look forward to welcoming you as Chairman, CEO and President of PG&E Corporation. We would appreciate receiving your written
acceptance of this offer as soon as possible. 
 Sincerely, 
 MARYELLEN HERRINGER 
 Maryellen Herringer 
 Interim Lead Director 
 This is to confirm my acceptance of PG&E
Corporation’s 
 Offer as Chairman, CEO and President as outlined above. 

ANTHONY F. EARLEY, JR. 8/8/11Restricted Stock Unit Agreement

 Exhibit 10.2 
 PG&E CORPORATION 
 2006 LONG-TERM INCENTIVE PLAN 

NON-ANNUAL RESTRICTED STOCK UNIT GRANT 
 ANTHONY F. EARLEY, JR. 
 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 2006 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:	  	September 13, 2011
		
	Name of Recipient:	  	 Anthony F. Earley, Jr.

		
	Recipient’s Participant ID:	  	  

		
	Number of Restricted Stock Units:	  	 61,605

 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 Grant, the
attached Agreement, and a copy of the prospectus describing the LTIP and the Restricted Stock Units dated March 1, 2011, which is supplemented hereby. 
 Attachment 

 This document constitutes part of a 

Prospectus covering securities that 
 have been registered under the 
 Securities Act of 1933, as amended.

 PG&E CORPORATION 
 2006 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 shall 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 Prospectus dated March 1, 2011, this Agreement shall govern. For purposes of this Agreement,
employment with PG&E Corporation shall mean employment with any member of the Participating Company Group.
		
	 Grant of
 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, one-third of the total number of Restricted Stock Units originally subject to this Agreement, as shown above on the
cover sheet, will vest on each of the first, second and third anniversaries of date you first start employment with PG&E Corporation (the “Start Date,” which for these purposes is the same as the Date of Grant) (collectively, the
“Normal Vesting Schedule”). 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 shall then be automatically 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 shall issue shares as soon as practicable after the Restricted Stock Units vest in accordance with the Normal Vesting Schedule (but not later than sixty (60) days after the applicable vesting date); provided, however,
that such

			
		  	issuance shall, if earlier, be made with respect to all of your outstanding vested Restricted Stock Units (after giving effect to the vesting provisions described below) as soon
as practicable after (but not later than sixty (60) days after) the earliest to occur of your (1) Disability (as defined under Code Section 409A), (2) death or (3) “separation from service,” within the meaning of Code Section 409A within 2
years following a Change in Control.
		
	Voluntary Termination	  	In the event of your voluntary termination, unvested Restricted Stock Units shall continue to vest (as if you continued to be employed by PG&E Corporation) such that the
total number of vested Restricted Stock Units (including Restricted Stock Units, if any, that vested prior to the date of termination) shall be equal to the greater of (1) the actual number of vested Restricted Stock Units or (2) the number
determined by multiplying the total number of Restricted Stock Units subject to this Agreement by the number of your days of service with PG&E Corporation in the Normal Vesting Schedule (through the date of termination), divided by the potential
number of days of service in the Normal Vesting Schedule. All other unvested Restricted Stock Units will be cancelled upon such termination. Vested Restricted Stock Units will continue to be settled and paid on the same time schedule and at the rate
that would be normally applicable (absent your termination of employment) until the pro-rated amount (if any) is exhausted.
		
	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” means when PG&E Corporation, acting in good faith based upon information then known to it, determines that you have engaged in, committed, or are responsible for (1) serious misconduct, gross negligence, theft, or
fraud against PG&E Corporation and/or its affiliates, (2) refusal or unwillingness to perform your duties; (3) inappropriate conduct in violation of PG&E Corporation’s equal employment opportunity policy; (4) conduct which reflects
adversely upon, or making any remarks disparaging of, PG&E Corporation, its Board of Directors, Officers, or employees, or its affiliates or subsidiaries; (5) insubordination; (6) any willful act that is likely to have the effect of injuring the
reputation, business, or business relationship of PG&E Corporation or its subsidiaries or affiliates; (7) violation of any fiduciary duty; or (8) breach of any duty of loyalty.

		
	 Termination
 other
than for Cause
	  	If your employment with PG&E Corporation is terminated (other than termination in connection with a Change in Control, as provided below) by PG&E Corporation other than
for cause, unvested Restricted Stock Units shall continue to vest (as if you continued to be employed by PG&E Corporation) such that the total number of vested Restricted Stock Units (including Restricted Stock Units, if any, that vested prior
to the date of termination) shall be equal to the greater of (1) the actual number of vested

  
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		  	Restricted Stock Units or (2) the number determined by multiplying the total number of Restricted Stock Units subject to this Agreement by the number of your days of service with
PG&E Corporation in the Normal Vesting Schedule (through the date of termination), divided by the potential number of days of service in the Normal Vesting Schedule. All other unvested Restricted Stock Units will be cancelled upon such
termination. Vested Restricted Stock Units will continue to be settled and paid on the same time schedule and at the rate that would be normally applicable (absent your termination of employment) until the pro-rated amount (if any) is
exhausted.
		
	Death/Disability	  	In the event of your death or Disability while you are employed, all of your Restricted Stock Units shall vest and be settled as soon as practicable after (but not later than
sixty (60) days after) the date of such event. If your death or Disability occurs following the termination of your employment and your Restricted Stock Units are then outstanding under the terms hereof, then all of your vested Restricted Stock
Units plus any Restricted Stock Units that would have otherwise vested during any continued vesting period hereunder shall be settled as soon as practicable after (but not later than sixty (60) days after) the date of your death or
Disability.
		
	Termination Due to Disposition of Subsidiary	  	(1) If your employment is terminated (other than termination 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 termination 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 Restricted Stock Units shall vest and be settled 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 shall automatically vest immediately preceding and contingent on, the Change in
Control and be settled in accordance with the Normal Vesting Schedule, subject to the earlier settlement provisions of this Agreement.

		
	Termination In Connection with a	  	If you separate from service (other than termination for cause or your voluntary termination) in connection with a Change in Control within three

  
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	 Change in

Control
	  	months before the Change in Control occurs, all of your outstanding Restricted Stock Units (including Restricted Stock Units that you would have otherwise forfeited after the end
of any continued vesting period) shall automatically vest on the date of the Change in Control and will be settled in accordance with the Normal Vesting Schedule (without regard to the requirement that you be employed) subject to the earlier
settlement provisions of this Agreement. In the event of such a separation in connection with a Change in Control within two years following the Change in Control, 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) shall automatically vest on the date of such separation and will be settled as soon as practicable after (but not later than sixty (60) days after) the date of such separation.
PG&E Corporation shall have the sole discretion to determine whether termination of your employment was made in connection with a Change in Control.
		
	Delay	  	PG&E Corporation shall 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

  
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		  	 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 shall 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 shall 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 shall 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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