Document:

PG&E Corporation Officer Severance Policy

    Exhibit
      10.48

      PG&E
        CORPORATION

      OFFICER
        SEVERANCE POLICY

      (As
        Amended Effective as of February 15, 2006)

      

      

      	1.  	
              Purpose

            

      

      This
        is
        the controlling and definitive statement of the Officer Severance Policy
        of
        PG&E Corporation (“Policy”). Since Officers are employed at the will of
        PG&E Corporation (“Corporation”) or a participating employer (“Employer”),
        their employment may be terminated at any time, with or without cause. A
        list of
        Employers is attached hereto as Appendix A. The Policy, which was first adopted
        effective November 1, 1998, provides Officers of the Corporation and Employers
        in Officer Compensation Bands I through V (“Officers”) with severance benefits
        if their employment is terminated.1 /
        Severance benefits for officers not covered by this Policy will be provided
        under policies or programs developed by the appropriate lines of business
        in
        consultation with and with the approval by the Senior Human Resources Officer
        of
        the Corporation. 

      

      The
        purpose of the Policy is to attract and retain senior management by defining
        terms and conditions for severance benefits, to provide severance benefits
        that
        are part of a competitive total compensation package, to provide consistent
        treatment for all terminated officers, and to minimize potential litigation
        costs associated with Officer termination of employment. 

      

      	2.  	
              Termination
                of Employment Not Following a Change in Control or Potential Change
                in
                Control

            

      

      	(a)  	
              Corporation
                or Employer’s Obligations.
                If the Corporation or an Employer exercises its right to terminate
                an
                Officer’s employment without cause and such termination does not entitle
                Officer to payments under Section 3, the Officer shall be given thirty
                (30) days’ advance written notice or pay in lieu thereof. Except as
                provided in Section 2(b) below, in consideration of the Officer's
                agreement to the obligations described in Section 2(d) below and
                to the
                arbitration provisions described in Section 12 below, the
                following payments and benefits shall also be provided to
                Officer:2/

            

      

      	(1)  	
              A
                lump sum severance payment equal to: 1/12 (the sum of the Officer’s annual
                base compensation and the Officer’s Short-Term Incentive Plan target award
                at the time of his or her termination) times (the number of
                

            

       

      
        
           

          

          
            

              
                	
                        1/

                      	
                        Severance
                          benefits for Officers who are currently covered by an employment
                          agreement
                          will continue to be provided solely under such agreements
                          until their
                          expiration at which time this Policy will become effective
                          for such
                          Officers.

                      

              

               

              
                	
                        2/

                      	
                        Any
                          payments made hereunder shall be less applicable taxes.
                          

                      

              

               

            

          

          
             

          

        

        
          
          

          
            

          

        

        
          
          

        

      

      months
        that Officer was employed by the Corporation or the Employer (“Severance
        Multiple”)); provided, however, that the Severance Multiple shall be no less
        than 6, nor more than 24 for Officers in Officer Bands I, II, III, or more
        than
        18 for Officers in Officer Bands IV or V. Annual base compensation shall
        mean
        the Officer's monthly base pay for the month in which the Officer is given
        notice of termination, multiplied by 12.

       

      	(2)  	
              If
                Officer is a participant in the Supplemental Executive Retirement
                Plan of
                PG&E Corporation (SERP) and Officer’s age is less than 55 years, such
                portion of the amount described in the preceding Section 2(a)(1)
                to
                provide for additional years to Officer's age to age 55 shall be
                converted
                for purposes of calculating a benefit under the SERP. Any amount
                of
                severance payment remaining after conversion under this subsection
                shall
                be paid to Officer in a lump sum. The value of any amount so converted
                shall be calculated using the same actuarial factors used in calculating
                benefits under the Retirement Plan for Employees of Pacific Gas and
                Electric Company. If Officer is a participant in the SERP and if
                the
                additional age resulting from a conversion under Section 2(a)(2)
                does not
                result in an age of 55, Officer shall be paid the amount calculated
                under
                2(a)(1) in a lump sum; 

            

       

      	(3)  	
              The
                incentive awards granted to Officer under the Corporation’s Long-Term
                Incentive Program which have not yet vested as of the date of termination
                will continue to vest over a period of months equal to the Severance
                Multiple after the date of termination as if the Officer had remained
                employed for such period. For vested stock options as of the date
                of
                termination, the Officer shall have the right to exercise such stock
                options at any time within their respective terms or within five
                years
                after termination, whichever is shorter. For stock options that vest
                during a period of months equal to the Severance Multiple, the Officer
                shall have the right to exercise such options at any time within
                five
                years after termination. Any unvested incentive awards remaining
                at the
                end of such period shall be forfeited; 

            

       

      

      	(4)  	
              For
                Officers in Officer Bands I, II or III, two thirds of the unvested
                Company
                stock units in the Officer's account in the Corporation's Deferred
                Compensation Plan for Officers which were awarded in connection with
                the
                Executive Stock Ownership Program requirements ("SISOPs") shall vest
                upon
                the Officer's termination, and one third shall be forfeited. For
                Officers
                in Officer Bands IV and V, one third of any unvested SISOPs shall
                vest
                upon the Officer's termination, and two thirds shall be forfeited.
                Unvested stock units attributable to SISOPs which become vested under
                this
                provision shall be distributed to Officer in accordance with the
                Deferred
                Compensation Plan after such stock units vest;

            

       

      	(5)  	
              For
                a period of 18 months, the Officer's COBRA premiums, if any;
                

            

       

      	(6)  	
              If
                Officer is terminated after serving consecutively for six months
                in a
                fiscal year, Officer shall be entitled to receive a prorated bonus
                under
                any short-term incentive plan in which such Officer participates,
                at the
                time such bonus would otherwise be paid, if any;
                

            

       

      
        
          
          

        

        
          2

          
            

          

        

        
          
          

        

      

      	(7)  	
              To
                the extent not theretofore paid or provided, the Officer shall be
                paid or
                provided with any other amounts or benefits required to be paid or
                provided or which the Officer is eligible to receive under any plan,
                contract or agreement of the Corporation or Employer;
                

            

       

      	(8)  	
              Such
                career transition services as the Corporation's Senior Human Resources
                Officer shall determine is appropriate;
                and

            

       

      	(9)  	
              All
                acts required of the Employer under the Policy may be performed by
                the
                Corporation for itself and the Employer, and the costs of the Policy
                may
                be equitably apportioned by the Administrator among the Corporation
                and
                the other Employers. The Corporation shall be responsible for making
                payments and providing benefits pursuant to this Policy for Officers
                employed by the Corporation. Whenever the Employer is permitted or
                required under the terms of the Policy to do or perform any act,
                matter or
                thing, it shall be done and performed by any Officer or employee
                of the
                Employer who is thereunto duly authorized by the board of directors
                of the
                Employer. Each Employer shall be responsible for making payments
                and
                providing benefits pursuant to the Policy on behalf of its Officers
                or for
                reimbursing the Corporation for the cost of such payments or benefits,
                as
                determined by the Corporation in its sole discretion. In the event
                the
                respective Employer fails to make such payment or reimbursement,
                an
                Officer’s (or other payee’s) sole recourse shall be against the respective
                Employer, and not against the
                Corporation.

            

       

      

      	(b)  	
              Remedies.
                An Officer shall be entitled to recover damages for late or nonpayment
                of
                amounts to which the Officer is entitled hereunder. The Officer shall
                also
                be entitled to seek specific performance of the obligations and any
                other
                applicable equitable or injunctive
                relief.

            

      

      	(c)  	
              Section
                2(a) shall not apply in the event that an Officer’s employment is
                terminated “for cause.” Except as used in Section 3 of this Policy, “for
                cause” means that the Corporation, in the case of an Officer employed by
                the Corporation, or Employer in the case of an Officer employed by
                an
                Employer, acting in good faith based upon information then known
                to it,
                determines that the Officer has engaged in, committed, or is responsible
                for (1) serious misconduct, gross negligence, theft, or fraud against
                the
                Corporation and/or an Employer; (2) refusal or unwillingness to perform
                his duties; (3) inappropriate conduct inviolation
                of Corporation’s equal employment opportunity policy; (4) conduct which
                reflects adversely upon, or making any remarks disparaging of, the
                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 the Corporation or its subsidiaries or
                affiliates; (7) violation of any fiduciary duty; or (8) breach of
                any duty
                of loyalty; or (9) any breach of the restrictive covenants contained
                in
                Subsection 2(d) below. Upon termination “for cause,” the Corporation, its
                Board of Directors, Officers, or employees, or its affiliates or
                subsidiaries shall have no liability to the Officer other than for
                accrued
                salary, vacation benefits, and any vested rights the Officer may
                have
                under the benefit and compensation plans in which the Officer participates
                and under the general terms and conditions of the applicable plan.
                

            

       

      
        
          
          

        

        
          3

          
            

          

        

        
          
          

        

      

      	(d)  	
              Obligations
                of Officer 

            

      

      	(1)  	
              Release
                of Claims.
                There shall be no obligation to commence the payment of the amounts
                and
                benefits described in Section 2(a) until the latter of (1) the delivery
                by
                Officer to the Corporation a fully executed comprehensive general
                release
                of any and all known or unknown claims that he or she may have against
                the
                Corporation, its Board of Directors, Officers, or employees, or its
                affiliates or subsidiaries and a covenant not to sue in the form
                prescribed by the Administrator, and (2) the expiration of any revocation
                period associated with the release to which the Officer may be entitled
                under law.

            

      

      	(2)  	
              Covenant
                Not to Compete.
                (i) During the period of Officer's employment with the Corporation
                or its
                subsidiaries and for a period of months equal to the Severance Multiple
                thereafter (the "Restricted Period"), Officer shall not, in any county
                within the State of California or in any city, county or area outside
                the
                State of California within the United States or in the countries
                of Canada
                or Mexico, directly or indirectly, whether as partner, employee,
                consultant, creditor, shareholder, or other similar capacity, promote,
                participate, or engage in any activity or other business competitive
                with
                the Corporation's business or that of any of its subsidiaries or
                affiliates, without the prior written consent of the Corporation's
                Chief
                Executive Officer. Notwithstanding the foregoing, Officer may have
                an
                interest in any public company engaged in a competitive business
                so long
                as Officer does not own more than 2 percent of any class of securities
                of
                such company, Officer is not employed by and does not consult with,
                or
                becomes a director of, or otherwise engage in any activities for,
                such
                competing company. 

            

      

      (ii)
        The
        Corporation and its subsidiaries presently conduct their businesses within
        each county
        in
        the State of California and in areas

      outside
        California that are located within the United States, and it is anticipated
        that
        the Corporation and its subsidiaries will also be conducting business within
        the
        countries of Canada and Mexico. Such covenants are necessary and reasonable
        in
        order to protect the Corporation and its subsidiaries in the conduct of their
        businesses. To the extent that the foregoing covenant or any provision of
        this
        Section 2(d)(2)(ii) shall be deemed illegal or unenforceable by a court or
        other
        tribunal of competent jurisdiction with respect to (i) any geographic area,
        (ii)
        any part of the time period covered by such covenant, (iii) any activity
        or
        capacity covered by such covenant, or (iv) any other term or provision of
        such
        covenant, such determination shall not affect such covenant with respect
        to any
        other geographic area, time period, activity or other term or provision covered
        by or included in such covenant. 

      

      
        
          
          

        

        
          4

          
            

          

        

        
          
          

        

      

      	(3)  	
              Soliciting
                Customers and Employees.
                During the Restricted Period, Officer shall not, directly or indirectly,
                solicit or contact any customer or any prospective customer of the
                Corporation or its subsidiaries or affiliates for any commercial
                pursuit
                that could be reasonably construed to be in competition with the
                Corporation, or induce, or attempt to induce, any employees, agents
                or
                consultants of or to the Corporation or any of its subsidiaries or
                affiliates to do anything from which Officer is restricted by reason
                of
                this covenant nor shall Officer, directly or indirectly, offer or
                aid to
                others to offer employment to, or interfere or attempt to interfere
                with
                any employment, consulting or agency relationship with, any employees,
                agents or consultants of the Corporation, its subsidiaries and affiliates,
                who received compensation of $75,000 or more during the preceding
                six (6)
                months, to work for any business competitive with any business of
                the
                Corporation, its subsidiaries or affiliates.

            

      

      	(4)  	
              Confidentiality.
                Officer shall not at any time (including after termination of employment)
                divulge to others, use to the detriment of the Corporation or its
                subsidiaries or affiliates, or use in any business competitive with
                any
                business of the Corporation or its subsidiaries or affiliates any
                trade
                secret, confidential or privileged information obtained during his
                employment with the Corporation or its subsidiaries or affiliates,
                without
                first obtaining the written consent of the Corporation's Chief Executive
                Officer. This paragraph covers but is not limited to discoveries,
                inventions (except as otherwise provided by California law), improvements,
                and writings, belonging to or relating to the affairs of the Corporation
                or of any of its subsidiaries or affiliates, or any marketing systems,
                customer lists or other marketing data. Officer shall, upon termination
                of
                employment for any reason, deliver to the Corporation all data, records
                and communications, and all drawings, models, prototypes or similar
                visual
                or conceptual presentations of any type, and all copies or duplicates
                thereof, relating to all matters contemplated by this paragraph.
                

            

      
        
           

          

          
          

        

        
          5

          
            

          

        

        
          
          

        

      

      

      	(5)  	
              Assistance
                in Legal Proceedings.
                During the Restricted Period, Officer shall, upon reasonable notice
                from
                the Corporation, furnish information and proper assistance (including
                testimony and document production) to the Corporation as may be reasonably
                required by the Corporation in connection with any legal, administrative
                or regulatory proceeding in which it or any of its subsidiaries or
                affiliates is, or may become, a party, or in connection with any
                filing or
                similar obligation of the Corporation imposed by any taxing,
                administrative or regulatory authority having jurisdiction, provided,
                however, that the Corporation shall pay all reasonable expenses incurred
                by Officer in complying with this paragraph. 

            

      

      	(6)  	
              Remedies.
                Upon Officer's failure to comply with the provisions of this Section
                2(d),
                the Corporation shall have the right to immediately terminate any
                unpaid
                amounts or benefits described in Section 2(a) to Officer. In the
                event of
                such termination, the Corporation shall have no further obligations
                under
                this Policy and shall be entitled to recover damages. In the event
                of an
                Officer’s breach or threatened breach of any of the covenants set forth in
                this Section 2(d), the Corporation shall also be entitled to specific
                performance by Officer of any such covenant and any other applicable
                equitable or injunctive relief.

            

      

      	3.  	
              Termination
                of Employment Following a Change in Control or Potential Change in
                Control

            

      

      	(a)  	
              If
                an Executive Officer’s employment by the Corporation or any subsidiary or
                successor of the Corporation shall be subject to an Involuntary
                Termination within the Covered Period, then the provisions of this
                Section
                3 instead of Section 2 shall govern the obligations of the Corporation
                as
                to the payments and benefits it shall provide to the Executive Officer.
                In
                the event that Executive Officer’s employment with the Corporation or an
                employing subsidiary is terminated under circumstances which would
                not
                entitle Executive Officer to payments under this Section 3, Executive
                Officer shall only receive such benefits to which he is entitled
                under
                Section 2, if any. In no event shall Executive Officer be entitled
                to
                receive termination benefits under both this Section 3 and Section
                2.

            

      

      All
        the
        terms used in this Section 3 shall have the following meanings:

       

      	(1)  	
              "Affiliate"
                shall mean any entity which owns or controls, is owned or is under
                common
                ownership or control with, the Corporation.

            

       

      	(2)  	
              "Cause"
                shall mean (i) the willful and continued failure of the Executive
                Officer
                to perform substantially the Executive Officer’s duties with the
                Corporation or one of its affiliates (other than any such failure
                resulting from incapacity due to physical or mental illness), after
                a
                written demand for substantial performance is delivered to the Executive
                Officer by the Board of Directors or the Chief Executive Officer
                of the
                Corporation which specifically identifies the manner in which the
                Board of
                Directors or Chief Executive Officer believes that the Executive
                Officer
                has not substantially performed the Executive Officer’s duties; or (ii)
                the willful engaging by the Executive Officer in illegal conduct
                or gross
                misconduct which is materially demonstrably injurious to the
                Corporation.

            

       

      
        
          
          

        

        
          6

          
            

          

        

        
          
          

        

      

      For
        purposes of the provision, no act or failure to act, on the part of the
        Executive Officer, shall be considered “willful” unless it is done, or omitted
        to be done, by the Executive Officer in bad faith or without reasonable belief
        that the Executive Officer’s action or omission was in the best interests of the
        Corporation. Any act, or failure to act, based upon authority given pursuant
        to
        a resolution duly adopted by the Board of Directors or upon the instructions
        of
        the Chief Executive Officer or a senior officer of the Corporation or based
        upon
        the advice of counsel for the Corporation shall be conclusively presumed
        to be
        done, or omitted to be done, by the Executive Officer in good faith and in
        the
        best interests of the Corporation. The cessation of employment of the Executive
        Officer shall not be deemed to be for Cause unless and until there shall
        have
        been delivered to the Executive Officer a copy of a resolution duly adopted
        by
        the affirmative vote of not less than three-quarters of the entire membership
        of
        the Board of Directors at a meeting of the Board of Directors called and
        held
        for such purpose (after reasonable notice is provided to the Executive Officer
        and the Executive Officer is given an opportunity, together with counsel,
        to be
        heard before the Board of Directors), finding that, in the good faith opinion
        of
        the Board of Directors, the Executive Officer is guilty of the conduct described
        in subparagraph (i) or (ii) above, and specifying the particulars thereof
        in
        detail.

       

      	(3)  	
              "Change
                in Control" shall be deemed to have occurred
                if:

            

       

      	(a)  	
              any
                “person” (as such term is used in Sections 13(d) and 14(d)(2) of the
                Securities Exchange Act of 1934, but excluding any benefit plan for
                employees or any trustee, agent or other fiduciary for any such plan
                acting in such person’s capacity as such fiduciary), directly or
                indirectly, becomes the beneficial owner of securities of the Corporation
                representing 20 percent or more of the combined voting power of the
                Corporation's then outstanding
                securities;

            

       

      	(b)  	
              during
                any two consecutive years, individuals who at the beginning of such
                a
                period constitute the Board of Directors of the Corporation cease
                for any
                reason to constitute at least a majority of the Board of Directors
                of the
                Corporation, unless the election or the nomination for election by
                the
                shareholders of the Corporation, of each new Director was approved
                by a
                vote of at least two-thirds (2/3) of the Directors then still in
                office
                who were Directors at the beginning of the period;
                or

            

       

      
        
          
          

        

        
          7

          
            

          

        

        
          
          

        

      

      	(c)  	
              any
                consolidation or merger of the Corporation shall have been consummated
                other than a merger or consolidation which would result in the voting
                securities of the Corporation outstanding immediately prior thereto
                continuing to represent (either by remaining outstanding or by being
                converted into voting securities of the surviving entity or any parent
                of
                such surviving entity) at least 70 percent of the Combined Voting
                Power of
                the Corporation, such surviving entity or the parent of such surviving
                entity outstanding immediately after such merger or consolidation;
                or
                

            

       

      	(d)  	
              the
                shareholders of the Corporation shall have approved (i)  any sale,
                lease, exchange or other transfer (in one transaction or a series
                of
                related transactions) of all or substantially all of the assets of
                the
                Corporation; or (ii) any plan or proposal for the liquidation or
                dissolution of the Corporation.

            

       

      	(4)  	
              "Change
                in Control Date" shall mean the date on which a Change in Control
                occurs.
                

            

       

      	(5)  	
              "Combined
                Voting Power" shall mean the combined voting power of the Corporation's
                or
                other relevant entity's then outstanding voting
                securities.

            

       

      	(6)  	
              “Covered
                Period" shall mean the period commencing with the Change in Control
                Date
                and terminating two (2) years following said commencement; provided,
                however, that if a Change in Control occurs and Executive Officer's
                employment with the Corporation or the employing subsidiary is subject
                to
                an Involuntary Termination before the Change in Control Date but
                on or
                after a Potential Change in Control Date, and if it is reasonably
                demonstrated by the Executive Officer that such termination (i) was
                at the
                request of a third party who has taken steps reasonably calculated
                to
                effect a Change in Control, or (ii) otherwise arose in connection
                with or
                in anticipation of a Change in Control, then the Covered Period shall
                mean, as applied to Executive Officer, the two-year period beginning
                on
                the date immediately before the Potential Change in Control Date.
                In the
                case of termination of employment following a Potential Change in
                Control
                Date, references in the definition of "Good Reason" to conditions
                in
                effect immediately prior to a Change in Control shall be deemed to
                mean
                conditions in effect immediately prior to Executive Officer's
                termination.

            

       

      	(7)  	
              "Disability"
                shall mean the absence of the Executive Officer from the Executive
                Officer's duties with the Corporation or the employing subsidiary
                on a
                full-time basis for 180 consecutive business days as a result of
                incapacity due to physical or mental illness which is determined
                to be
                total and permanent by a physician selected by the Corporation or
                its
                insurers and acceptable to the Executive Officer or the Executive
                Officer's legal representative. 

            

       

      
        
          
          

        

        
          8

          
            

          

        

        
          
          

        

      

      	(8)  	
              “Executive
                Officer” shall mean officers of the Corporation at the level of Senior
                Vice President and above and the principal executive officer of each
                Employer.

            

       

      	(9)  	
              "Good
                Reason" shall mean any one or more of the following which takes place
                within the Covered Period:

            

       

      	(a)  	
              An
                adverse change in Executive Officer's status or position(s) as in
                effect
                immediately before a Change in Control or Potential Change in Control,
                including, without limitation, the assignment to the Executive Officer
                of
                any duties inconsistent in any respect with the Executive Officer’s
                position (including status, offices, titles and reporting requirements,
                including reporting requirements under Section 16 of the Securities
                Exchange Act of 1934), authority, duties or responsibilities prior
                to a
                Change in Control or Potential Change in Control, or any other action
                by
                the Corporation which results in the diminution in such position,
                authority, duties or responsibilities prior to a Change in Control
                or
                Potential Change in Control, excluding for this purpose an isolated,
                insubstantial and inadvertent action not taken in bad faith and which
                is
                remedied by the Corporation promptly after receipt of notice thereof
                given
                by the Executive Officer;

            

       

      	(b)  	
              Executive
                Officer's base salary is reduced from that provided to him immediately
                before the Change in Control Date or as the same may be increased
                from
                time to time thereafter, unless such reduction is part of an
                across-the-board reduction for all similarly situated executives,
                including executives of the other party to the transaction that results
                in
                the Change in Control;

            

       

      	(c)  	
              Executive
                Officer's eligibility to participate in bonus, stock option, incentive
                award and other compensation plans which provide opportunities to
                receive
                compensation is diminished from that provided to him immediately
                before
                the Change in Control Date, unless substantially equal benefits are
                provided to Executive Officer under comparable compensation plans,
                or
                unless such reduction is part of an across-the-board reduction for
                all
                similarly situated executives, including executives of the other
                party to
                the transaction that results in the Change in
                Control;

            

       

      
        
          
          

        

        
          9

          
            

          

        

        
          
          

        

      

      	(d)  	
              The
                aggregate projected value of Executive Officer's employee benefits
                (including but not limited to supplemental and excess retirement
                programs,
                medical, dental, life insurance and long-term disability plans) and
                perquisites is diminished from that provided to him immediately before
                the
                Change in Control Date, unless such reduction is part of an
                across-the-board reduction for all similarly situated executives,
                including executives of the other party to the transaction that results
                in
                the Change in Control;

            

       

      	(e)  	
              A
                change in Executive Officer's principal place of employment by Corporation
                (including its subsidiaries) to a location more than thirty-five
                miles
                from Executive Officer's principal place of employment immediately
                before
                the Change in Control Date;

            

       

      	(f)  	
              A
                reasonable determination by the Board of Directors that, as a result
                of a
                Change in Control and a change in circumstances thereafter significantly
                affecting his position, he is unable to exercise the authorities,
                powers,
                function or duties attached to his position immediately before the
                Change
                in Control Date;

            

       

      	(g)  	
              The
                failure of the Corporation to obtain the assumption of this Policy
                by any
                successor contemplated in Section 7, hereof;
                or

            

       

      	(h)  	
              The
                material failure of the Corporation to fulfill its obligations under
                this
                Policy, to the extent not remedied in a reasonable period of time
                after
                the Corporation’s receipt of written notice from Executive Officer
                specifying the material failure by the
                Corporation.

            

       

      	(10)  	
              "Involuntary
                Termination" shall mean a termination (i) by the Corporation without
                Cause, or (ii) by Executive Officer following Good Reason; provided,
                however, the term "Involuntary Termination" shall not include termination
                of Executive Officer's employment due to Executive Officer's death,
                Disability, or voluntary retirement. 

            

       

      	(11)  	
              "Potential
                Change in Control" shall mean the earliest to occur of (i) the date
                on
                which the Corporation executes an agreement or letter of intent,
                where the
                consummation of the transaction described therein would result in
                the
                occurrence of a Change in Control, (ii) the date on which the Board
                of
                Directors approves a transaction or series of transactions, the
                consummation of which would result in a Change in Control, or (iii)
                the
                date on which a tender offer for the Corporation's voting stock is
                publicly announced, the completion of which would result in a Change
                in
                Control; provided, however, that if such Potential Change in Control
                terminates by its terms, such transaction shall no longer constitute
                a
                Potential Change in Control. 

            

       

      
        
          
          

        

        
          10

          
            

          

        

        
          
          

        

      

      	(12)  	
              "Potential
                Change in Control Date" shall mean the date on which a Potential
                Change in
                Control occurs. 

            

       

      	(13)  	
              "Reference
                Salary" shall mean the greater of (i) the annual rate of Executive
                Officer's base salary from the Corporation or the employing subsidiary
                in
                effect immediately before the date of Executive Officer's Involuntary
                Termination, or (ii) the annual rate of Executive Officer's base
                salary
                from the Corporation or the employing subsidiary in effect immediately
                before the Change in Control Date. 

            

       

      	(14)  	
              "Termination
                Date" shall be the date specified in the written notice of termination
                of
                Executive Officer's employment given by either party in accordance
                with
                Section 3(b) of this Policy. 

            

       

      	(b)  	
              Notice
                of Termination.
                During the Covered Period, in the event that the Corporation (including
                an
                employing subsidiary) or Executive Officer terminates Executive Officer’s
                employment with the Corporation or Employer, the party terminating
                employment shall give written notice of termination to the other
                party,
                specifying the Termination Date and the specific termination provision
                in
                this Section 3 that is relied upon, if any, and setting forth in
                reasonable detail the facts and circumstances claimed to provide
                a basis
                for termination of Executive Officer’s employment under the provision so
                indicated. The Termination Date shall be determined as follows: (i)
                if
                Executive Officer's employment is terminated for Disability, thirty
                (30)
                days after a Notice of Termination is given (provided that Executive
                Officer shall not have returned to the full-time performance of Executive
                Officer's duties during such 30-day period); (ii) if Executive Officer's
                employment is terminated by the Corporation in an Involuntary Termination,
                five days after the date the Notice of Termination is received by
                Executive Officer; and (iii) (as defined in this Section 3) if Executive
                Officer's employment is terminated by the Corporation for Cause,
                the date
                specified in the Notice of Termination, provided, that the events
                or
                circumstances cited by the Board of Directors as constituting Cause
                are
                not cured by Executive Officer during any cure period that may be
                offered
                by the Board of Directors. The Date of Termination for a resignation
                of
                employment other than for Good Reason shall be the date set forth
                in the
                applicable notice, which shall be no earlier than ten (10) days after
                the
                date such notice is received by the Corporation, unless waived by
                the
                Corporation.

            

       

           
During
        the Covered Period, a notice of
        termination given by Executive Officer for Good Reason shall be given within
        three (3) months after occurrence of the event on which Executive Officer
        bases
        his notice of  termination and shall provide a Termination Date not
        more than sixty (60) days after the notice of termination is given to the
        Corporation.

       

      	(c)  	
              Corporation’s
                Obligations.
                If Executive Officer's employment by the Corporation or any Employer
                or
                successor of the Corporation shall be subject to an Involuntary
                Termination within the Covered Period, then the Corporation shall
                provide
                Executive Officer the following benefits:

            

       

      
        
          
          

        

        
          11

          
            

          

        

        
          
          

        

      

      	(1)  	
              The
                Corporation shall pay to the Executive Officer a lump sum in cash
                within
                thirty (30) days after the Termination Date:

            

       

      	(a)  	
              the
                sum of (1) any earned but unpaid base salary through the Termination
                Date
                at the rate in effect at the time of the notice of termination to
                the
                extent not theretofore paid; (2) the Executive Officer's target bonus
                under the Short-Term Incentive Plan of the Corporation, an Affiliate,
                or a
                predecessor, for the fiscal year in which the Termination Date occurs
                (the
                "Target Bonus"); and (3) any accrued but unpaid vacation pay, in
                each case
                to the extent not theretofore paid; and

            

      

      	(b)  	
              the
                amount equal to the product of (1) three and (2) the sum of (x) the
                Reference Salary and (y) the Target
                Bonus.

            

      

      	(2)  	
              Any
                benefits conditioned upon continued future employment shall accelerate
                in
                full. 

            

       

      	(3)  	
              Remedies.
                The Executive Officer shall be entitled to recover damages for late
                or
                nonpayment of amounts which the Corporation is obligated to pay hereunder.
                The Executive Officer shall also be entitled to seek specific performance
                of the Corporation’s obligations and any other applicable equitable or
                injunctive relief.

            

       

      	(4)  	
              Benefits
                provided hereunder to “key employees” within the meaning of Code Section
                409A shall be paid on a delayed basis to the extent the Company determines
                in good faith that the delay is necessary to avoid an additional
                tax under
                Code Section 409A.

            

       

      	(d)  	
              Adjustment
                for Excise Taxes.
                If any portion of the payments to the Executive Officer under this
                Section
                3 or under any other plan, program, or arrangement maintained by
                the
                Corporation (a "Payment") would be subject to the excise tax levied
                under
                Section 4999 of the Internal Revenue Code ("Code"), or any interest
                or
                penalties are incurred by Executive Officer with respect to such
                excise
                tax (such excise tax together with such interest and penalties are
                referred to herein as the "Excise Tax"), then the Corporation shall
                make
                an additional payment to Executive Officer (a "Tax Restoration Payment")
                in an amount such that after payment by the Executive Officer of
                all taxes
                (including any interest or penalties imposed with respect to such
                taxes),
                including, without limitation, any income taxes (and any interest
                and
                penalties imposed with respect thereto) and Excise Tax imposed upon
                the
                Tax Restoration Payment, the Executive Officer retains an amount
                of the
                Tax Restoration Payment equal to the Excise Tax imposed upon the
                Payments.
                The payment of a Tax Restoration Payment under this Section 3 shall
                not be
                conditioned upon the Executive Officer's termination of employment.
                

            

      

      
        
          
          

        

        
          12

          
            

          

        

        
          
          

        

      

      All
        determinations and calculations required to be made under this Section 3(d)
        shall be made by Deloitte & Touche (the “Accounting Firm”), which shall
        provide its determination (the “Determination”), together with detailed
        supporting calculations regarding the amount of any Tax Restoration Payment
        and
        any other relevant matter, both to the Corporation and the Executive Officer
        within five (5) days of the termination of the Executive Officer’s employment,
        if applicable, or such earlier time as is requested by the Corporation or
        the
        Executive Officer (if the Executive Officer reasonably believes that any
        of the
        Payments may be subject to Excise Tax). If the Accounting Firm determines
        that
        no Excise Tax is payable by the Executive Officer, it shall furnish the
        Executive Officer with a written statement that such Accounting Firm has
        concluded that no Excise Tax is payable (including the reasons therefor)
        and
        that the Executive Officer has substantial authority not to report any Excise
        Tax on the Executive Officer’s federal income tax return. If a Tax Restoration
        Payment is determined to be payable, it shall be paid to the Executive Officer
        within five (5) days after the Determination is delivered to the Corporation
        or
        the Executive Officer. Any determination by the Accounting Firm shall be
        binding
        upon the Corporation and the Executive Officer, absent manifest
        error.

      

      As
        a
        result of uncertainty in the application of Section 4999 of the Code at the
        time
        of the initial determination by the Accounting Firm hereunder, it is possible
        that Tax Restoration Payments not made by the Corporation should have been
        made
        (“Underpayment”) or that Tax Restoration Payments will have been made by the
        Corporation which should not have been made (“Overpayment”). In either such
        event, the Accounting Firm shall determine the amount of the Underpayment
        or
        Overpayment that has occurred. In the case of an Underpayment, the amount
        of
        such Underpayment shall be promptly paid by the Corporation to or for the
        benefit of the Executive Officer. In the case of an Overpayment, the Executive
        Officer shall, at the direction and expense of the Corporation, take such
        steps
        as are reasonably necessary (including the filing of returns and claims for
        refund), follow reasonable instructions from, and procedures established
        by, the
        Corporation, and otherwise reasonably cooperate with the Corporation to correct
        such Overpayment, provided, however, that (i) the Executive Officer shall
        in no
        event be obligated to return to the Corporation an amount greater than the
        net
        after-tax portion of the Overpayment that the Executive Officer has retained
        or
        has recovered as a refund from the applicable taxing authorities, and (ii)
        this
        provision shall be interpreted in a manner consistent with the intent of
        the Tax
        Restoration Payment paragraph above, which is to make the Executive Officer
        whole, on an after-tax basis, from the application of Excise Tax, it being
        understood that the correction of an Overpayment may result in the Executive
        Officer’s repaying to the Corporation an amount that is less than the
        Overpayment.

      

      
        
          
          

        

        
          13

          
            

          

        

        
          
          

        

      

      	4.  	
              Administration

            

      

      The
        Policy shall be administered by the Senior Human Resources Officer of the
        Corporation (“Administrator”), who shall have the authority to interpret the
        Policy and make and revise such rules as may be reasonably necessary to
        administer the Policy. The Administrator shall have the duty and responsibility
        of maintaining records, making the requisite calculations, securing Officer
        releases, and disbursing payments hereunder. The Administrator’s
        interpretations, determinations, rules, and calculations shall be final and
        binding on all persons and parties concerned.

      

      	5.  	
              No
                Mitigation 

            

      

      Payment
        of the amounts and benefits under Section 2(a) and Section 3 (except as
        otherwise provided in Section 2(a)(5)) shall not be subject to offset,
        counterclaim, recoupment, defense or other claim, right or action which the
        Corporation or an Employer may have and shall not be subject to a requirement
        that Officer mitigate or attempt to mitigate damages resulting from Officer's
        termination of employment.

      

      	6.  	
              Amendment
                and Termination

            

      

      The
        Corporation, acting through its Nominating and Compensation Committee, reserves
        the right to amend or terminate the Policy at any time; provided, however,
        that
        any amendment which would reduce the aggregate level of benefits, or terminate
        the Policy, shall not become effective prior to the third anniversary of
        the
        Corporation giving notice to Officers of such amendment or termination.

      

      	7.  	
              Successors

            

      

      The
        Corporation will require any successor (whether direct or indirect, by purchase,
        merger, consolidation or otherwise) to all or substantially all of the business
        or assets of the Corporation expressly to assume and to agree to perform
        its
        obligations under this Policy in the same manner and to the same extent that
        the
        Corporation would be required to perform such obligations if no such succession
        had taken place; provided, however, that no such assumption shall relieve
        the
        Corporation of its obligations hereunder. As used herein, the "Corporation"
        shall mean the Corporation as hereinbefore defined and any successor to its
        business and/or assets as aforesaid which assumes and agrees to perform its
        obligations by operation or law or otherwise. 

       

      This
        Policy shall inure to the benefit of and be binding upon the Officer (and
        Officer's personal representatives and heirs), Corporation and its successors
        and assigns, and any such successor or assignee shall be deemed substituted
        for
        the Corporation under the terms of this Policy for all purposes. As used
        herein,
“successor” and “assignee” shall include any person, firm, corporation or other
        business entity which at any time, whether by purchase, merger or otherwise,
        directly or indirectly acquires the stock of the Corporation or to which
        the
        Corporation assigns this Policy by operation of law or otherwise. If Officer
        should die while any amount would still be payable to Officer hereunder if
        Officer had continued to live, all such amounts, unless otherwise provided
        herein, shall be paid in accordance with this Policy to Officer’s devisee,
        legatee or other designee, or if there is no such designee, to Officer's
        estate.

       

      
        
          
          

        

        
          14

          
            

          

        

        
          
          

        

      

      	8.  	
              Nonassignability
                of Benefits

            

      

      The
        payments under this Policy or the right to receive future payments under
        this
        Policy may not be anticipated, alienated, pledged, encumbered, or subject
        to any
        charge or legal process, and if any attempt is made to do so, or a person
        eligible for payments becomes bankrupt, the payments under the Policy of
        the
        person affected may be terminated by the Administrator who, in his or her
        sole
        discretion, may cause the same to be held if applied for the benefit of one
        or
        more of the dependents of such person or make any other disposition of such
        benefits that he or she deems appropriate.

       

      	9.  	
              Nonguarantee
                of Employment

            

      

      Officers
        covered by the Policy are at-will employees, and nothing contained in this
        Policy shall be construed as a contract of employment between the Officer
        and
        the Corporation (or, where applicable, a subsidiary or affiliate of the
        Corporation), or as a right of the Officer to continued employment, or to
        remain
        as an Officer, or as a limitation on the right of the Corporation (or a
        subsidiary or affiliate of the Corporation) to discharge Officer at any time,
        with or without cause.

      

      	10.  	
              Benefits
                Unfunded and Unsecured

            

      

      The
        payments under this Policy are unfunded, and the interest under this Policy
        of
        any Officer and such Officer’s right to receive payments under this Policy shall
        be an unsecured claim against the general assets of the
        Corporation.

      

      	11.  	
              Applicable
                Law

            

      

      All
        questions pertaining to the construction, validity, and effect of the Policy
        shall be determined in accordance with the laws of the United States and,
        to the
        extent not preempted by such laws, by the laws of the state of
        California.

      

      	12.  	
              Arbitration
                

            

      

      With
        the
        exception of any request for specific performance, injunctive or other equitable
        relief, any dispute or controversy of any kind arising out of or related
        to this
        Policy, Officer's employment with the Corporation (or with the employing
        subsidiary), the termination thereof or any claims for benefits shall be
        resolved exclusively by final and binding arbitration in accordance with
        the
        Commercial Arbitration Rules of the American Arbitration Association then
        in
        effect. Provided, however, that in making their determination, the arbitrators
        shall be limited to accepting the position of the Officer or the position
        of the
        Corporation, as the case may be. The only claims not covered by this Section
        12
        are claims for benefits under workers' compensation or unemployment insurance
        laws; such claims will be resolved under those laws. The place of arbitration
        shall be San Francisco, California. Parties may be represented by legal counsel
        at the arbitration but must bear their own fees for such representation.
        The
        prevailing party in any dispute or controversy covered by this Section 12,
        or
        with respect to any request for specific performance, injunctive or other
        equitable relief, shall be entitled to recover, in addition to any other
        available remedies specified in this Policy, all litigation expenses and
        costs,
        including any arbitrator or administrative or filing fees and reasonable
        attorneys' fees. Both the Officer and the Corporation specifically waive
        any
        right to a jury trial on any dispute or controversy covered by this Section
        12.
        Judgment may be entered on the arbitrators’ award in any court of competent
        jurisdiction.

      
        
           

          

          
          

        

        
          15

          
            

          

        

        
          
          

        

      

      Appendix
        A

      

      Participating
        Employers

      

      PG&E
        Corporation

      Pacific
        Gas and Electric Company

      PG&E
        Corporation Support Services, Inc.Unassociated Document

     

    Exhibit
      10.49

    PG&E
      CORPORATION 

    GOLDEN
      PARACHUTE RESTRICTION POLICY

    

    Effective
      Date: February 15, 2006

    

    It
      is the
      policy of the Board of Directors (the “Board”) of PG&E Corporation (the
“Corporation”) that the Corporation shall not pay a Senior Executive any future
      Golden Parachute Benefits exceeding 2.99 times that Senior Executive’s Base
      Salary Plus Bonus, unless such excess Golden Parachute Benefits are approved
      by
      the affirmative vote of a majority of the shares of the Corporation represented
      and voting on the matter. 

    

    Shareholder
      approval will be required only for excess Golden Parachute Benefits paid
      pursuant to a Future Golden Parachute Agreement.

    

    For
      purposes of this Policy, the following terms shall have the following
      meanings:

    

    	·  	
            "Base
              Salary Plus Bonus" means
              the sum of: 

          

    

    	(i)  	
            the
              greater of a Senior Executive’s annual base salary as in effect
              immediately prior to the date of (1) the Senior Executive’s termination of
              employment or (2) the change in control,
              plus

          

    

    	(ii)  	
            the
              Short-Term Incentive Plan bonus target calculated for the fiscal year
              in
              which termination occurs.

          

    

    	·  	
            "Future
              Golden Parachute Agreement”
              means the following:

          

    

    	(i)  	
            an
              employment agreement or arrangement between PG&E Corporation (or one
              of its subsidiaries) and a Senior Executive pursuant to which the Senior
              Executive renders services to PG&E Corporation (or one of its
              subsidiaries) as an employee (and not as a consultant or other independent
              contractor), when such agreement is entered into on or after the effective
              date of this Policy, or 

          

    

    	(ii)  	
            a
              severance agreement between the Corporation (or one of its subsidiaries)
              and a Senior Executive related to the termination of employment of
              the
              Senior Executive with the Corporation (or one of its subsidiaries),
              when
              such agreement is entered into on or after
              the effective date of this Policy, or

          

    

    	(iii)  	
            any
              policy of PG&E Corporation (or one of its subsidiaries) that provides
              benefits for a Senior Executive upon severance related to a change
              in
              control, if such Senior Executive becomes covered by such policy on
              or after
              the effective date of this Policy, or

          

    

    	(iv)  	
            any
              renewal, material modification, or extension that is made on
              or after
              the effective date of this Policy to an employment agreement, severance
              agreement, or policy that is in effect as of the effective date of
              this
              Policy, to the extent permitted by law or the terms of that existing
              agreement or policy.

          

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    	·  	
            “Golden
              Parachute Benefits” means
              payments that a Senior Executive is entitled to receive if that Senior
              Executive is severed (or constructively severed) following or in
              connection with a change in control, and includes the following:
              

          

    

    	(i)  	
            amounts
              payable in cash to a Senior Executive (including cash amounts payable
              for
              the uncompleted portion of an employment term under an agreement) after
              that Senior Officer is severed (or constructively severed) following
              a
              change in control, and 

          

    

    	(ii)  	
            special
              benefits or perquisites provided to a Senior Executive at the time
              of such
              Senior Executive’s termination of employment.

          

    

    The
      term
“Golden Parachute Benefits” includes both lump-sum payments and the estimated
      present value of any periodic payments made or special benefits or perquisites
      provided following the date of termination (or constructive termination) of
      such
      Senior Executive’s employment. 

    

    Notwithstanding
      the foregoing, the term “Golden Parachute Benefits” does not include:

    

    (i)
       the
      value
      of any accelerated vesting or settlement of any outstanding equity-based award
      (whether settled in cash or stock), 

    

    (ii)
       a
      pro-rata portion (based on the portion of the performance period elapsed through
      the date of termination) of the value of any accelerated vesting of any
      outstanding long-term cash-based incentive award, 

    

    (iii)
       compensation
      and benefits earned, accrued, or otherwise provided for services rendered
      through the date of termination of employment (other than any such compensation
      or benefits awarded at the time of the Senior Executive’s termination of
      employment), 

    

    (iv)
       any
      post-termination retirement and other benefits, special benefits, or perquisites
      provided under plans, programs, or arrangements of Corporation applicable to
      one
      or more groups of employees in addition to the Senior Executives, 

    

    (v) tax
      restoration payments,

    

    (vi) payments
      required by law,

    

    (vii) amounts
      paid for post-termination covenants, 

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    (viii) amounts
      paid for services following termination of employment under a reasonable
      consulting agreement for a period of one year, and

    

    (ix) amounts
      that would be payable due to a severance in the absence of a change in control
      or due to a change in control in the absence of a severance.

    

    Golden
      Parachute Benefits shall not be triggered by shareholder approval of a change
      in
      control transaction without further consummation of the transaction, or by
      transfer of a Senior Executive to a successor company without subsequent
      termination or constructive termination.

    

    	·  	
            “Senior
              Executive” means
              a person who, immediately prior to his or her severance or employment,
              is
              an officer of PG&E Corporation or a subsidiary who has the title of
              Senior Vice President or higher. 

          

    

    The
      PG&E Corporation Board delegates to the PG&E Corporation Nominating,
      Compensation, and Governance Committee full authority to make determinations
      regarding the interpretation of the provisions of this Policy, in its sole
      discretion, including, without limitation, the determination of the value of
      any
      non-cash items, as well as the present value of any cash or non-cash benefits
      payable over a period of time.

    

    In
      the
      event that (i) the Board feels that the circumstances with respect to a given
      Senior Executive’s severance warrant the payment of Golden Parachute Benefits
      exceeding 2.99 times that Senior Executive’s Base Salary Plus Bonus, and (ii)
      the Board determines that it is impractical to submit the matter to a
      shareholder vote in a timely fashion, the Board may elect to seek shareholder
      approval of the excess Golden Parachute Benefits after the parties have mutually
      agreed to the material terms of the relevant severance agreement.

    

    The
      Board
      shall have the right to amend, waive, or cancel this Policy at any time if
      it
      determines in its sole discretion that such action would be in the best
      interests of the Corporation and its shareholders, provided that any such action
      shall be promptly disclosed either through a press release, on the Corporation’s
      website, or through another method designed to reach the Corporation’s
      shareholders.

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