PG&E CORPORATION AMENDMENT AND RESTATEMENT OF PERFORMANCE SHARE AGREEMENT
Exhibit
10.53
PG&E
CORPORATION
2006
LONG-TERM INCENTIVE PLAN
AMENDMENT
AND RESTATEMENT OF
PG&E CORPORATION, a
California corporation, hereby amends and restates the terms and conditions of
Performance Share Agreements granting Performance Shares on March 3, 2008 under
the PG&E Corporation 2006 Long-Term Incentive Plan as amended (the
“LTIP”). The terms and conditions of the amended and restated
Performance Share Agreements are set forth below.
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The
LTIP and Other Agreements
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This
Agreement constitutes the entire understanding between you and PG&E
Corporation regarding the Performance Shares, subject to the terms of the
LTIP. Any prior agreements, commitments or negotiations are
superseded. In the event of any conflict or inconsistency
between the provisions of this Agreement and the LTIP, the LTIP shall
govern. Capitalized terms that are not defined in this Agreement are
defined in the LTIP.
For
purposes of this Agreement, employment with PG&E Corporation shall
mean employment with any member of the Participating Company
Group.
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Grant
of
Performance
Shares
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PG&E
Corporation grants you the number of Performance Shares shown on the cover
sheet of this Agreement. The Performance Shares are subject to
the terms and conditions of this Agreement and the LTIP.
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Vesting
of Performance Shares
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As
long as you remain employed with PG&E Corporation, the Performance
Shares will vest on the first business day of March (the “Vesting Date”)
of the third year following the date of grant specified in the cover
sheet. Except as described below, all Performance Shares
subject to this Agreement that have not vested shall be forfeited upon
termination of your employment.
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Payment
of Performance Shares
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Upon
the Vesting Date, PG&E Corporation’s total shareholder return (TSR)
will be compared to the TSR of the twelve other companies in PG&E
Corporation’s comparator group1 for the prior three calendar years (the
“Performance Period”). Subject to rounding considerations,
there will be no payout for TSR below the 25th
percentile of the comparator group; TSR at the 25th
percentile will result in a 25% payout of Performance Shares; TSR at the
75th
percentile will result in a 100% payout of Performance Shares; and TSR in
the ▇▇▇ ▇▇▇▇ will result in a 200% payout of Performance
Shares. The following table sets forth the payout percentages
for the various TSR rankings that could be achieved:
Number
of Companies in
Total
(Including
PG&E)
13
Performance Rounded
Rank Percentile Payout
1 100% 200%
2 92% 170%
3 83% 130%
4 75% 100%
5 67% 90%
6 58% 75%
7 50% 65%
8 42% 50%
9 33% 35%
10 25% 25%
11 17%
0%
12 8%
0%
13 0% 0%
The
payment will equal the product of the number of vested Performance Shares,
the applicable payout percentage, and the average closing price of a share
of PG&E Corporation common stock for the last 30 calendar days of the
year preceding the Vesting Date as reported on the New York Stock
Exchange. Payments, if any, will be made as soon as practicable
after the Vesting Date following the date that the Compensation Committee
of the PG&E Corporation Board of Directors certifies the TSR
percentile rank over the Performance Period pursuant to Section 10.5(a) of
the LTIP, but in any event within sixty (60) days of the Vesting
Date.
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Dividends
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Each
time that PG&E Corporation declares a dividend on its shares of common
stock, an amount equal to the dividend multiplied by the number of
Performance Shares granted to you by this Agreement shall be accrued on
your behalf. If you receive a Performance Share payout in
accordance with the preceding paragraph, at that same time you also shall
receive a cash payment equal to the amount of any dividends accrued over
the Performance Period multiplied by the same payout percentage used to
determine the amount of the Performance Share payout.
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Voluntary
Termination
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If
you terminate your employment with PG&E Corporation voluntarily before
the Vesting Date, all of the Performance Shares shall be cancelled as of
the date of such termination and any dividends accrued with respect to
your Performance Shares shall be forfeited.
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Termination
for Cause
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If
your employment with PG&E Corporation is terminated by PG&E
Corporation for cause before the Vesting Date, all of the Performance
Shares shall be cancelled as of the date of such termination and any
dividends accrued with respect to your Performance Shares shall be
forfeited. In general, termination for “cause” means
termination of employment because of dishonesty, a criminal offense or
violation of a work rule, and will be determined by and in the sole
discretion of PG&E Corporation.
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Termination
other than for Cause
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If
your employment with PG&E Corporation is terminated by PG&E
Corporation other than for cause before the Vesting Date, your unvested
Performance Shares will vest proportionally based on the number of months
during the Performance Period that you were employed (rounded down)
divided by the number of months in the Performance Period (36
months). All other outstanding Performance Shares (and any
associated accrued dividends) shall automatically be cancelled upon such
termination. Your vested Performance Shares will be payable, if
at all, as soon as practicable after the Vesting Date based on the same
formula applied to active employees and in any event within sixty (60)
days of the Vesting Date. At that time you also shall receive a
cash payment, if any, equal to the amount of dividends accrued over the
Performance Period with respect to your vested Performance Shares
multiplied by the same payout percentage used to determine the amount, if
any, of the Performance Share payout.
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Retirement
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If
you retire before the Vesting Date, your outstanding Performance Shares
will continue to vest as though your employment had continued and will be
payable, if at all, as soon as practicable following the Vesting Date and
in any event within sixty (60) days of the Vesting Date. At the
same time you also shall also receive a cash payment, if any, equal to the
amount of dividends accrued over the Performance Period with respect to
your Performance Shares multiplied by the same payout percentage used to
determine the amount, if any, of the Performance Share
payout. You will be considered to have retired if you are age
55 or older on the date of termination and if you were employed by
PG&E Corporation for at least five consecutive years ending on the
date of termination of your employment.
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Death/Disability
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If
your employment terminates due to your death or disability before the
Vesting Date, all of your Performance Shares shall immediately vest and
will be payable, if at all, as soon as practicable after the Vesting Date
and in any event within sixty (60) days of the Vesting Date based on the
same formula applied to active employees. At that same time you
also shall receive a cash payment, if any, equal to the amount of
dividends accrued over the Performance Period with respect to your
Performance Shares multiplied by the same payout percentage used to
determine the amount, if any, of the Performance Share
payout.
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Termination
Due to Disposition of Subsidiary
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(1)
If your employment is terminated (other than for cause or your voluntary
termination) by reason of a divestiture or change in control of a
subsidiary of PG&E Corporation, which divestiture or change in control
results in such subsidiary no longer qualifying as a subsidiary
corporation under Section 424(f) of the Internal Revenue Code of 1986, as
amended, or (2) if your employment is terminated (other than for cause or
your voluntary termination) coincident with the sale of all or
substantially all of the assets of a subsidiary of PG&E Corporation,
all Performance Shares shall vest proportionally based on the number of
months during the Performance Period that you were employed (rounded down)
divided by the number of months in the Performance Period (36
months). All other outstanding Performance Shares (and any
associated accrued dividends) shall automatically be cancelled upon such
termination. Your vested Performance Shares will be payable, if
at all, as soon as practicable after the Vesting Date and in any event
within sixty (60) days of the Vesting Date, based on the same formula
applied to active employees. At that same time you also shall
receive a cash payment, if any, equal to the amount of dividends accrued
over the Performance Period with respect to your vested Performance Shares
multiplied by the same payout percentage used to determine the amount, if
any, of the Performance Share payout.
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Change
in Control
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In
the event of a Change in Control, the surviving, continuing, successor, or
purchasing corporation or other business entity or parent thereof, as the
case may be (the “Acquiror”), may, without your
consent, either assume or continue PG&E Corporation’s rights and
obligations under this Agreement or provide a substantially equivalent
award in substitution for the Performance Shares subject to this
Agreement. If the Acquiror assumes or continues PG&E
Corporation’s rights and obligations under this Agreement or substitutes a
substantially equivalent award, TSR shall be calculated by aggregating (a)
the TSR of PG&E Corporation for the period from January 1 of the year
of grant to the date of the Change in Control, and (b) the TSR of the
Acquiror from the date of the Change in Control to the last calendar day
of the year preceding the Vesting Date. The payout
percentage reflected in the table set forth above for the highest
percentile TSR performance met or exceeded when calculated on that basis,
and considering any adjustments to the comparator group, will be used to
determine the amount of the payout, if any, upon settlement of the
assumed, continued or substituted award, which settlement shall occur as
soon as practicable after the Vesting Date and in any event within sixty
(60) days of the Vesting Date. At that time you also
shall receive a cash payment, if any, equal to the amount of
dividends accrued with respect to your Performance Shares to the first
business day of the year following the Change in Control multiplied by the
same payout percentage used to determine the amount, if any, of the
Performance Share payout.
If
this Award is neither assumed nor continued by the Acquiror or if the
Acquiror does not provide a substantially equivalent award in substitution
for the Performance Shares subject to this Agreement, all of your
outstanding Performance Shares shall automatically vest and become
nonforfeitable when the Change in Control of PG&E Corporation occurs
before the Vesting Date. Such vested Performance Shares will
become payable as soon as practicable following the original Vesting Date
and in any event within sixty (60) days of the original Vesting
Date. The payment, if any, will be based on PG&E
Corporation’s TSR for the period from January 1 of the year of grant to
the date of the Change in Control compared to the TSR of the other
companies in PG&E Corporation’s comparator group2 for the same period. The
payment will be calculated by multiplying the number of vested Performance
Shares by the payout percentage. The resulting number of
Performance Shares will be multiplied by the average closing price of a
share of PG&E Corporation common stock for the last 30 calendar days
preceding the Change in Control as reported on the New York Stock
Exchange. At the same time you also shall receive a cash
payment, if any, equal to the amount of dividends accrued with respect to
your Performance Shares to the first business day of the year following
the Change in Control multiplied by the same payout percentage used to
determine the amount, if any, of the Performance Share
payout.
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Termination
In Connection with a Change in Control
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If
your employment is terminated in connection with a Change in Control
within three months before the Change in Control occurs or within two
years following the Change in Control, all of your outstanding Performance
Shares (to the extent they did not previously vest upon failure of the
Acquiror to assume or continue this Award) shall automatically vest and
become nonforfeitable on the date of termination of your employment. Your
vested Performance Shares will be payable, if at all, as soon as
practicable following the original Vesting date and in any event within
sixty (60) days of the Vesting Date and will be based on the same formula
applied to active employees. You shall also at that time
receive a cash payment, if any, equal to the amount of dividends accrued
over the Performance Period with respect to your vested Performance Shares
multiplied by the same payout percentage used to determine the amount, if
any, of the Performance Share payout.
PG&E
Corporation shall have the sole discretion to determine whether
termination of your employment was made in connection with a Change in
Control.
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Withholding
Taxes
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PG&E
Corporation will withhold amounts necessary to satisfy applicable taxes
from the payment to be made with respect to your Performance
Shares. You will receive the remaining proceeds in
cash.
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Leaves
of Absence
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For
purposes of this Agreement, if you are on an approved leave of absence
from PG&E Corporation, or a recipient of PG&E Corporation
sponsored disability benefits, you will continue to be considered as
employed. If you do not return to active employment upon the
expiration of your leave of absence or the expiration of your PG&E
Corporation sponsored disability benefits, you will be considered to have
voluntarily terminated your employment. See above under
“Voluntary Termination.”
PG&E
Corporation reserves the right to determine which leaves of absence will
be considered as continuing employment and when your employment terminates
for all purposes under this Agreement.
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No
Retention Rights
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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.
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Applicable
Law
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This
Agreement will be interpreted and enforced under the laws of the State of
California.
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By
signing the cover sheet of this Agreement, you agree to all of the terms and
conditions described above and in the LTIP.
1 The
identities of the companies currently comprising the comparator group are
included in the prospectus. PG&E Corporation reserves the right
to change the companies comprising the comparator group at any
time.
2 The
identities of the companies currently comprising the comparator group are
included in the prospectus. PG&E Corporation reserves the right
to change the companies comprising the comparator group at any
time.