Document:

exv10w41

 

Exhibit 10.41

PG&E National Energy Group

Management Retention/Performance Award Program

	1.	 	Purpose and Term
	 
	 	 	This Management Retention/Performance Award Program (the “Program”),
effective as of September 1, 2002, is intended to enable PG&E National
Energy Group (the “Company”) to retain and motivate quality employees of
the Company who are critical to the Company’s ability to meet the
difficult challenges facing the energy sector. The Program will provide
financial incentives to eligible employees of the Company to continue
their employment with the Company through the Payment Dates (defined
below). In addition, the Program will provide awards for specific
performance for key employees of PG&E Gas Transmission-Northwest (GT-NW).
	 
	2.	 	Administration
	 
	 	 	The Plan Administrator shall be the Senior Vice President of Human
Resources for PG&E Corporation or his designee, who shall manage, operate
and administer the Program for all participants. The Plan Administrator
may, in his sole discretion, delegate responsibility to an individual or
individuals to handle the day-to-day affairs of the Program. The Plan
Administrator is empowered to effectuate the purposes and terms of the
Program as set forth herein and is authorized to perform certain duties,
including, but not limited to:

	 	(a)	 	the establishment and implementation of rules for the
management, operation and administration of the Program;
	 
	 	(b)	 	the determination of the eligibility of employees of the
Company for benefits under the Program;
	 
	 	(c)	 	the correction of any defect or omission and the
reconciliation of any inconsistency in the Program in such manner
and to such extent as he shall deem appropriate, in his sole
discretion; and
	 
	 	(d)	 	the interpretation of the Program in good faith to the
fullest extent permitted by law, which interpretation shall be final
and conclusive upon all persons.

	3.	 	Eligible Employees
	 
	 	 	The employees who are eligible to participate in the Program are set
forth on Schedule A hereto. The employees who are eligible to
participate in the Program shall be designated by the Plan Administrator
(each employee eligible to participate in the Program is hereinafter
referred to as a “Participant”)

 

 

	4.	 	Notice of Participation
	 
	 	 	Each Participant shall be notified in writing of his or her eligibility
to participate in the Program, subject to all of the conditions specified
in the Program and such notice being satisfied. Such notice shall
indicate the type and amount of award for which the Participant is
eligible and any additional terms and conditions as the Nominating and
Compensation Committee, in its sole and absolute discretion, may
determine.
	 
	5.	 	Types and Amounts of Awards
	 
	 	 	A Participant may be awarded either a retention award (“Retention Award”)
or a performance award (“Performance Award”).
	 
	 	 	The amount of the Retention Awards shall vary from 25% to 100% of a
Participant’s base salary as of the Program effective date, as set forth
on Schedule A hereto.
	 
	 	 	The amount of the Performance Awards shall vary from $10,000 to $20,000,
as set forth on Schedule A hereto.
	 
	6.	 	Vesting and Payment of Awards
	 
	 	 	Subject to satisfying the terms of the Program, a Participant’s Retention
Award shall vest, and be payable, in two installments.
	 
	 	 	The first installment of one-third of the Retention Award shall be
payable as soon as practicable after January 15, 2003. The second
installment of the remaining two-thirds is payable on the earlier of on
the first business day in October 2003 or should your employment with the
Company cease through no fault of your own, as soon as reasonably
practicable following any such event.
	 
	 	 	Subject to satisfying the terms of the Program, a Participant’s
Performance Award shall be payable as soon as practicable after the
successful accomplishment of a specific performance objective.
	 
	7.	 	Termination of Participation
	 
	 	 	A Participant’s participation in the Program shall automatically
terminate, without notice to or consent of such Participant, upon the
first to occur of any one of the following events with respect to such
Participant: (a) voluntary termination, or (b) termination of employment and ineligible for rehire.
	 
	8.	 	Binding Authority
	 
	 	 	The decisions of the Plan Administrator or his duly authorized
delegate(s) shall be final and conclusive for all purposes of the
Program, and shall not be subject to any appeal or review.

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	9.	 	No Property Interest
	 
	 	 	The Program is unfunded and all liabilities hereunder shall be unsecured
obligations of the Company.
	 
	10.	 	Other Rights
	 
	 	 	The Program shall not affect or impair the rights or obligations of the
Company or its subsidiaries or a Participant under any other written
contract, arrangement, or pension, profit sharing or other compensation
program, and all amounts payable under the Program shall be characterized
as special bonuses and not as additional salary for purposes of such
other contracts, arrangements or programs.
	 
	11.	 	Amendment or Termination
	 
	 	 	The Company may amend, alter, suspend or terminate the Program at any
time, retroactively or otherwise; provided, however, unless otherwise
required by law or specifically provided herein, no such amendment,
alteration, suspension or termination shall be made that would materially
impair the previously vested rights of any Participant without his or her
written consent.
	 
	12.	 	Severability
	 
	 	 	If any term or condition of the Program shall be invalid, illegal or
unenforceable, the remainder of the Program, with the exception of such
invalid, illegal or unenforceable provision, shall not be affected
thereby and shall continue in effect and application to its fullest
extent.
	 
	13.	 	No Employment Rights
	 
	 	 	Neither the establishment nor the terms of the Program shall be held or
construed to confer upon any Participant the right to a continuation of
employment by the Company. Subject to any applicable employment
agreement, the Company reserves the right to dismiss any Participant, or
otherwise deal with any Participant to the same extent as though the
Program had not been adopted.

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	14.	 	Transferability of Rights
	 
	 	 	The Company shall have the unrestricted right to transfer its obligations
under the Program with respect to one or more Participants to any person,
including any purchaser of all or any part of the Company’s business. No
Participant or spouse of a Participant shall have any right to commute,
encumber, transfer or otherwise dispose of or alienate any present or
future right or expectancy which the Participant may have at any time to
receive payments of benefits hereunder, except to the extent required by
law. Any attempt to transfer or assign a benefit, or any rights granted
hereunder, by a Participant shall (after consideration of such facts as
it deems pertinent), be grounds for terminating any rights of the
Participant to any portion of the Retention Award or Performance Award
not previously paid.
	 
	15.	 	Withholding
	 
	 	 	The payment of the Retention Award or Performance Award shall be subject
to all applicable withholding taxes and deductions.
	 
	16.	 	Governing Law
	 
	 	 	The Program shall be construed, administered, and enforced according to
the laws of the State of California, without regard to conflict of law
principles.

Adopted pursuant to the delegation contained in the Minutes of the Nominating
and Compensation Committee of PG&E Corporation dated August 26, 2002.

By:____________________________________________

Robert D. Glynn, Jr.

Chairman of the Board, Chief Executive Officer, and President

PG&E Corporation

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Schedule A

Participants and Retention Awards

	 	 	 	 	 	 	 
	 	 	 	 	 	 	Retention Award
	 	 	 	 	 	 	(percent of base
	Participant Grouping	 	Total Number of Participants	 	salary)
	
	 	
	 	

	Officers	 	 	
20
	 	 	75-100%
	

	Directors	 	 	
50
	 	 	50-75%
	

	Managers/Senior-level

Individual Contributors	 	 	
20
	 	 	25%
	

	GT-NW

Directors/Managers/Individual

Contributors	 	 	
10
	 	 	$10,000 — $20,000
	

 

	 	 	 	 
	Total Participants:	 	
100	 
	Minimum Total Awards:	 	
$6 million	 
	Maximum Total Awards:	 	
$10 million	 
	Average Award (Minimum):	 	
$66,000	 
	Average Award (Maximum):	 	
$110,000exv10w41w1

 

Exhibit 10.41.1

September 9, 2002

Thomas B. King

5059 Sedgwick Street NW

Washington, DC 20016

Dear Tom:

As you are aware, Standard & Poor’s and Moody’s Investors Service recently
downgraded the credit ratings of the PG&E National Energy Group (the “Company”)
and two of its subsidiaries to below investment grade. While disappointing,
these downgrades are in keeping with the rating agencies’ larger overall review
of the energy sector. In response to the downgrades and the challenging market
conditions affecting our sector of the energy industry, the Company has
embarked upon a major cost reduction effort with the goal of achieving a
reduction of at least $40 million in annual operating expenses.

In order to encourage you to continue your contribution to the success of the
Company amidst these challenging and disruptive business conditions, you are
being provided with a retention award subject to the terms and conditions set
forth in this letter (the “Letter”) and the PG&E National Energy Group
Management Retention Program (the “Program”).

	1.	 	Retention Award

	 	a.	 	Retention Award Amount - Your award will be an amount equal
to fifty percent (50%) of your base salary as of the first business
day of September 2002 (the “Retention Award”).
	 
	 	b.	 	Timing of Payment – One third of the Retention Award is
payable as soon as reasonably practicable after January 15, 2003.
The remaining two thirds is payable on the earlier of on the first
business day in October 2003 or should your employment with the
Company cease through no fault of your own, as soon as reasonably
practicable following any such event.
	 
	 	c.	 	Forfeiture of Retention Award - You will not be entitled to
any Retention Award and shall forfeit any claim to the Retention
Award if any of the following occur:

	 	(i)	 	voluntary termination, or termination of
employment for cause; or
	 
	 	(ii)	 	retirement.

 

 

Thomas B. King

September 9, 2002

Page 2

	2.	 	Other Benefits - The opportunity to earn the Retention Award is in
addition to other compensation and benefits for which you otherwise may be
eligible under any plan in which you are eligible to participate during or
at the time of your termination of employment. Because this Retention
Award represents a unique payment to you, this amount will not be
considered in calculating salary-related benefits (e.g., 401(k) plan
deferrals and retirement plan benefits).
	 
	3.	 	Withholding - All federal, state, city or other taxes that are required
to be withheld pursuant to any applicable law or regulation, will be
deducted from your Retention Award payment.
	 
	4.	 	Resolution of Disputes - The Plan Administrator (as defined in the
Program) or its designee, is responsible for the interpretation of this
Letter and the Program. The Plan Administrator shall have sole and
absolute discretion to resolve any questions, ambiguities or disputes
arising under this Letter and the Program, and its decision shall be final
and binding.
	 
	5.	 	Disclosure – As a condition of receipt of the Retention Award, you agree
that you will not disclose, publicize, or circulate to anyone in whole or
in part, any information concerning the existence, terms, and/or
conditions of this Program without the express written consent of the
Chief Legal Officer of the Company unless required by court order or law.
Notwithstanding the preceding sentence, you may disclose the terms and
conditions of this program to your immediate family members, and any
attorneys or tax advisors, if any, to whom there is a bona fide need for
disclosure in order for them to render professional services to you,
provided that you first instruct each affected family member, attorney,
and tax advisor that he/she must keep the information confidential and may
not make any disclosure of the terms and conditions of this Program,
unless required by court order or law.
	 
	6.	 	No Guarantee of Employment - Nothing in this Letter guarantees you any
specific term of employment or specific assignment. Nothing in this
Letter shall constitute a contract of employment, implied or otherwise,
for a specified duration. Additionally, the Company is an
employment-at-will company, unless otherwise specified in a written
individual employment contract or collective bargaining agreement. Under
employment-at-will, either the Company and/or the employee may terminate
the employment relationship at any time, for any reason, with or without
notice or cause.

Sincerely,

Thomas G. Boren

Executive Vice President

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