Contract
Exhibit
10.4
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THE
TERMS AND CONDITIONS OF THIS AGREEMENT ARE PURSUANT TO THE PG&E CORPORATION
OFFICER SEVERANCE PLAN, ADOPTED BY THE NOMINATING, COMPENSATION, AND GOVERNANCE
COMMITTEE OF PG&E CORPORATION, AND ARE NOT SUBJECT TO
NEGOTIATION
This
Separation Agreement (this “Agreement”) is made and entered into by and between
G. Xxxxxx Xxxxxx and PG&E Corporation (the “Corporation”) (collectively the
“Parties”) and sets forth the terms and conditions of Xx. Xxxxxx’x separation
from employment with the Corporation. The “Effective Date” of this
Agreement is defined in paragraph 17(a).
1. Resignation. Effective
the close of business on March 5, 2008 (for purposes of this Agreement, the
“Date of Resignation”), Xx. Xxxxxx will resign from his positions as Vice
President, Chief Financial Officer and Controller of Pacific Gas and Electric
Company and Vice President and Controller of PG&E Corporation, and resign
from employment with the Corporation. Xx. Xxxxxx shall have until
March 26, 2008, to accept this Agreement by submitting a signed copy to the
Corporation. Regardless of whether Xx. Xxxxxx accepts this Agreement,
on his Date of Resignation, he will be paid all salary or wages and vacation
accrued, unpaid and owed to him as of that date, he will remain entitled to any
other benefits to which he is otherwise entitled under the provisions of the
Corporation’s plans and programs, and he will receive notice of the right to
continue his existing health-insurance coverage pursuant to COBRA.
The
benefits set forth in paragraph 2 below are conditioned upon Xx. Xxxxxx’x
acceptance of this Agreement.
2. Separation
benefits. Even though Xx. Xxxxxx is not otherwise entitled to
them, in consideration of his acceptance of this Agreement, the Company will
provide to Xx. Xxxxxx the following separation benefits:
x. Xxxxxxxxx
payment. Under the terms of the PG&E Corporation Officer
Severance Policy, Xx. Xxxxxx’x xxxxxxxxx payment amount is Six Hundred
Sixty-Seven Thousand Seven Hundred Twenty-Five Dollars ($667,725) of which
Sixty-Two Thousand Six Hundred Twenty-Eight Dollars ($62,628) will be converted
into additional age to age 55 under the PG&E Corporation Supplemental
Executive Retirement Plan. As a result, Xx. Xxxxxx will be entitled
to receive an annual defined supplemental pension benefit as a single life
annuity of Six Hundred Twenty-Six Dollars and Eighty-Six Cents ($626.86)
beginning on the first of October 2008. On the Effective Date of this
Agreement as set forth in paragraph 17(a) below, the Corporation will make a
lump-sum payment to Xx. Xxxxxx in the gross amount of Six Hundred Five Thousand
Ninety-Seven Dollars ($605,097), less applicable withholdings and
deductions.
b. Stock. Upon the
Date of Resignation, but conditioned on the occurrence of the Effective Date of
this Agreement as set forth in paragraph 17(a) below, all
unvested restricted stock grants, and performance share grants
provided to Xx. Xxxxxx under PG&E Corporation’s 2006 Long-Term Incentive
Plan shall continue to vest, terminate, or be canceled as provided under the
terms of their respective plans or program, as modified by the PG&E
Corporation Officer Severance Policy in effect at the time this Agreement is
signed by Mr.
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Xxxxxx. The
payment and withdrawal of Xx. Xxxxxx’x restricted stock grants, and performance
share grants shall be as provided under the terms of their respective plans or
program, as modified by the PG&E Corporation Officer Severance Policy in
effect at the time this Agreement is signed by Xx. Xxxxxx.
d. Career transition
services. For a maximum period of one year following the Date
of Resignation, the Corporation will provide Xx. Xxxxxx with executive career
transition services from the firm of Torchiana, Mastrov & Xxxxxx, Inc., in
accordance with the contract between the Corporation and Torchiana, Mastrov
& Xxxxxx, Inc. Xx. Xxxxxx’x entitlement to services under this
Agreement will terminate when he becomes employed, either by another employer or
through self-employment other than consulting with the
Corporation. If Xx. Xxxxxx becomes employed, he will promptly notify
PG&E Corporation’s Human Resources Officer to enable the Corporation to end
the provision of services to him by Torchiana, Mastrov & Xxxxxx,
Inc.
e. Payment of COBRA
premiums. If Xx. Xxxxxx elects and is otherwise eligible to
continue his existing health-insurance coverage pursuant to COBRA, the
Corporation will pay his monthly COBRA premiums for the eighteen-month period
commencing the first full month after the Date of Resignation and until and
unless Xx. Xxxxxx becomes covered under the health-insurance plan of another
employer or through self-employment. Xx. Xxxxxx will promptly notify
the PG&E Corporation’s Human Resources Officer if he becomes employed within
that period.
3. Defense and indemnification in
third-party claims. The Corporation and/or its parent,
affiliate, or subsidiary will provide Xx. Xxxxxx with legal representation and
indemnification protection in any legal proceeding in which he is a party or is
threatened to be made a party by reason of the fact that he is or was an
employee or officer of the Corporation and/or its parent, affiliate or
subsidiary, in accordance with the terms of the resolution of the Board of
Directors of PG&E Corporation dated December 18, 1996.
4. Cooperation with legal
proceedings. Xx. Xxxxxx will, upon reasonable notice, furnish
information and proper assistance to the Corporation and/or its parent,
affiliate or subsidiary (including truthful testimony and document production)
as may reasonably be required by them or any of them in connection with any
legal, administrative or regulatory proceeding in which they or any of them is,
or may become, a party, or in connection with any filing or similar obligation
imposed by any taxing, administrative or regulatory authority having
jurisdiction, provided, however, that the Corporation and/or its parent,
affiliate or subsidiary will pay all reasonable expenses incurred by Xx. Xxxxxx
in complying with this paragraph.
5. Release of claims and covenant not to
xxx.
a. In
consideration of the separation benefits and other benefits the Corporation is
providing under this Agreement, Xx. Xxxxxx, on behalf of himself and his
representatives, agents, heirs and assigns, waives, releases, discharges and
promises never to assert any and all claims, liabilities or obligations of every
kind and nature, whether known or unknown, suspected or unsuspected that he ever
had, now has or might have as of the Effective Date against the Corporation or
its predecessors, parent, affiliates, subsidiaries, shareholders,
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owners,
directors, officers, employees, agents, attorneys, successors, or
assigns. These released claims include, without limitation, any
claims arising from or related to Xx. Xxxxxx’x employment with the Corporation,
its parent or any of its affiliates and subsidiaries, and the termination of
that employment. These released claims also specifically include, but
are not limited, any claims arising under any federal, state and local statutory
or common law, such as (as amended and as applicable) Title VII of the Civil
Rights Act, the Age Discrimination in Employment Act, the Americans With
Disabilities Act, the Employee Retirement Income Security Act, the California
Fair Employment and Housing Act, the California Labor Code, any other federal,
state or local law governing the terms and conditions of employment or the
termination of employment, and the law of contract and tort; and any claim for
attorneys’ fees.
b. Xx.
Xxxxxx acknowledges that there may exist facts or claims in addition to or
different from those which are now known or believed by him to
exist. Nonetheless, this Agreement extends to all claims of every
nature and kind whatsoever, whether known or unknown, suspected or unsuspected,
past or present, and Xx. Xxxxxx specifically waives all rights under Section
1542 of the California Civil Code which provides that:
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A
GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES NOT KNOW
OR SUSPECT TO EXIST IN HIS OR HER FAVOR AT THE TIME OF EXECUTING THE
RELEASE, WHICH IF KNOWN TO HIM OR HER MUST HAVE MATERIALLY AFFECTED HIS OR
HER SETTLEMENT WITH THE DEBTOR.
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c. With
respect to the claims released in the preceding paragraphs, Xx. Xxxxxx will not
initiate or maintain any legal or administrative action or proceeding of any
kind against the Corporation or its predecessors, parent, affiliates,
subsidiaries, shareholders, owners, directors, officers, employees, agents,
attorneys, successors, or assigns, for the purpose of obtaining any personal
relief, nor (except as otherwise required or permitted by law) assist or
participate in any such proceedings, including any proceedings brought by any
third parties.
6. Re-employment. Xx.
Xxxxxx will not seek any future re-employment with the Corporation, its parent
or any of its subsidiaries or affiliates. This paragraph will not,
however, preclude Xx. Xxxxxx from accepting an offer of future employment from
the Corporation, its parent or any of its subsidiaries or
affiliates.
7. Non-disclosure.
a. Xx.
Xxxxxx will not disclose, publicize, or circulate to anyone in whole or in part,
any information concerning the existence, terms, and/or conditions of this
Agreement without the express written consent of the PG&E Corporation’s
Chief Legal Officer unless otherwise required or permitted by
law. Notwithstanding the preceding sentence, Xx. Xxxxxx may disclose
the terms and conditions of this Agreement to his 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 him, provided that the
person first agrees to keep the information
confidential and not to make any disclosure of the terms and conditions of this
Agreement unless otherwise required or permitted by law.
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b. Xx.
Xxxxxx will not use, disclose, publicize, or circulate any confidential or
proprietary information concerning the Corporation or its subsidiaries or
affiliates, which has come to his attention during his employment with the
Corporation, unless doing so is expressly authorized in writing by the PG&E
Corporation’s Chief Legal Officer, or is otherwise required or permitted by
law. Before making any legally-required or permitted disclosure, Xx.
Xxxxxx will give the Corporation notice at least ten (10) business days in
advance.
8. No unfair
competition.
a. Xx.
Xxxxxx will not engage in any unfair competition against the Corporation, its
parent or any of its subsidiaries or affiliates.
b. For
a period of one year after the Effective Date, Xx. Xxxxxx will not, directly or
indirectly, solicit or contact for the purpose of diverting or taking away or
attempt to solicit or contact for the purpose of diverting or taking
away:
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(1)
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any
existing customer of the Corporation or its parent, affiliates or
subsidiaries;
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(2)
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any
prospective customer of the Corporation or its parent, affiliates or
subsidiaries about whom Xx. Xxxxxx acquired information as a result of any
solicitation efforts by the Corporation or its parent, affiliates or
subsidiaries, or by the prospective customer, during Xx. Xxxxxx’x
employment with the Corporation;
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(3)
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any
existing vendor of the Corporation or its parent, affiliates or
subsidiaries;
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(4)
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any
prospective vendor of the Corporation or its parent, affiliates or
subsidiaries, about whom Xx. Xxxxxx acquired information as a result of
any solicitation efforts by the Corporation or its parent, affiliates or
subsidiaries, or by the prospective vendor, during Xx. Xxxxxx’x employment
with the Corporation;
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(5)
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any
existing employee, agent or consultant of the Corporation or its parent,
affiliates or subsidiaries, to terminate or otherwise alter the person’s
or entity’s employment, agency or consultant relationship with the
Corporation or its parent, affiliates or subsidiaries;
or
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(6)
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any
existing employee, agent or consultant of the Corporation or its parent,
affiliates or subsidiaries, to work in any capacity for or on behalf of
any person, company or other business enterprise that is in competition
with the Corporation or its parent, affiliates or
subsidiaries.
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9. Material breach by
Employee. In the event that Xx. Xxxxxx breaches any material
provision of this Agreement, including but not necessarily limited to paragraphs
4, 5, 6, 7, and/or 8, the Corporation will have no further obligation to pay or
provide to him any unpaid amounts or benefits specified in this Agreement and
will be entitled to immediate return of any and all amounts or benefits
previously paid or provided to him under this Agreement and to recalculate any
future pension benefit entitlement without the additional credited age he
received or would have received under this Agreement. Despite any
breach by Xx. Xxxxxx, his other duties and obligations under this Agreement,
including his waivers and releases, will remain in full force and
effect. In the event of a breach or threatened breach by Xx. Xxxxxx
of any of the provisions in paragraphs 4, 5, 6, 7, and/or 8, the Corporation
will, in addition to any other remedies provided in this Agreement, be entitled
to equitable and/or injunctive relief and, because the damages for such a breach
or threatened breach will be difficult to determine and will not provide a full
and adequate remedy, the Corporation will also be entitled to specific
performance by Xx. Xxxxxx of his obligations under paragraphs 4, 5, 6, 7, and/or
8. Pursuant to paragraph 14, and except as otherwise prohibited or
limited by law, Xx. Xxxxxx will also be liable for any litigation costs and
expenses that the Corporation incurs in successfully seeking enforcement of its
rights under this Agreement, including reasonable attorney’s fees.
10. Material breach by the
Corporation. Xx. Xxxxxx will be entitled to recover actual
damages in the event of any material breach of this Agreement by the
Corporation, including any unexcused late or non-payment of any amounts owed
under this Agreement, or any unexcused failure to provide any other benefits
specified in this Agreement. In the event of a breach or threatened
breach by the Corporation of any of its material obligations to him under this
Agreement, Xx. Xxxxxx will be entitled to seek, in addition to any other
remedies provided in this Agreement, specific performance of the Corporation’s
obligations and any other applicable equitable or injunctive
relief. Pursuant to paragraph 14, and except as prohibited or limited
by law, the Corporation will also be liable for any litigation costs and
expenses that Xx. Xxxxxx incurs in successfully seeking enforcement of his
rights under this Agreement, including reasonable attorney’s
fees. Despite any breach by the Corporation, its other duties and
obligations under this Agreement will remain in full force and
effect.
11.
No admission of
liability. This Agreement is not, and will not be considered,
an admission of liability or of a violation of any applicable contract, law,
rule, regulation, or order of any kind.
12. Complete
agreement. This Agreement sets forth the entire agreement
between the Parties pertaining to the subject matter of this Agreement and fully
supersedes any prior or contemporaneous negotiations, representations,
agreements, or understandings between the Parties with respect to any such
matters, whether written or oral (including any that would have provided Xx.
Xxxxxx with any different severance arrangements). The Parties
acknowledge that they have not relied on any promise, representation or
warranty, express or implied, not contained in this Agreement. Parol
evidence will be inadmissible to show agreement by and among the Parties to any
term or condition contrary to or in addition to the terms and conditions
contained in this Agreement.
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13. Severability. If
any provision of this Agreement is determined to be invalid, void, or
unenforceable, the remaining provisions will remain in full force and effect
except that, should paragraphs 4, 5, 6, 7, and/or 8 be held invalid, void or
unenforceable, either jointly or separately, the Corporation will be entitled to
rescind the Agreement and/or recover from Xx. Xxxxxx any payments made and
benefits provided to him under this Agreement.
14. 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 Agreement, Xx. Xxxxxx’x employment with the Corporation (or with
the employing subsidiary), the separation of Xx. Xxxxxx from that employment and
from his positions as an officer and/or director of the Corporation or any
subsidiary or affiliate, or any claims for benefits, will be resolved
exclusively by final and binding arbitration using a three-member arbitration
panel in accordance with the Commercial Arbitration Rules of the American
Arbitration Association currently in effect, provided, however, that in
rendering their award, the arbitrators will be limited to accepting the position
of Xx. Xxxxxx or the Corporation. The only claims not covered by this
paragraph are any non-waivable claims for benefits under workers’ compensation
or unemployment insurance laws, which will be resolved under those
laws. Any arbitration pursuant to this paragraph will take place in
San Francisco, California. The Parties may be represented by legal
counsel at the arbitration but must bear their own fees for such representation
in the first instance. The prevailing party in any dispute or
controversy covered by this paragraph, or with respect to any request for
specific performance, injunctive or other equitable relief, will be entitled to
recover, in addition to any other available remedies specified in this
Agreement, all litigation expenses and costs, including any arbitrator,
administrative or filing fees and reasonable attorneys’ fees, except as
prohibited or limited by law. The Parties specifically waive any
right to a jury trial on any dispute or controversy covered by this
paragraph. Judgment may be entered on the arbitrators’ award in any
court of competent jurisdiction. Subject to the arbitration
provisions of this paragraph, the sole jurisdiction and venue for any action
related to the subject matter of this Agreement will be the California state and
federal courts having within their jurisdiction the location of the
Corporation’s principal place of business in California at the time of such
action, and both Parties hereby consent to the jurisdiction of such courts for
any such action.
15. Governing law. This
Agreement will be governed by and construed under the laws of the United States
and, to the extent not preempted by such laws, by the laws of the State of
California, without regard to their conflicts of laws provisions.
16. No waiver. The
failure of either Party to exercise or enforce, at any time, or for any period
of time, any of the provisions of this Agreement will not be construed as a
waiver of that provision, or any portion of that provision, and will in no way
affect that party’s right to exercise or enforce such provisions. No
waiver or default of any provision of this Agreement will be deemed to be a
waiver of any succeeding breach of the same or any other provisions of this
Agreement.
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17. Acceptance of
Agreement.
a. Xx.
Xxxxxx was provided up to 21 days to consider and accept the terms of this
Agreement and was advised to consult with an attorney about the Agreement before
signing it. The provisions of the Agreement are, however, not subject
to negotiation. After signing the Agreement, Xx. Xxxxxx will have an
additional seven (7) days in which to revoke in writing acceptance of this
Agreement. To revoke, Xx. Xxxxxx will submit a signed statement to
that effect to PG&E Corporation’s Chief Legal Officer before the close of
business on the seventh day. If Xx. Xxxxxx does not submit a timely
revocation, the Effective Date of this Agreement will be the eighth day after he
has signed it.
b. Xx.
Xxxxxx acknowledges reading and understanding the contents of this Agreement,
being afforded the opportunity to review carefully this Agreement with an
attorney of his choice, not relying on any oral or written representation not
contained in this Agreement, signing this Agreement knowingly and voluntarily,
and, after the Effective Date of this Agreement, being bound by all of its
provisions.
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Dated:
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3/6/08 .
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PG&E
CORPORATION
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By:
XXXX X.
XXXXX
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Dated:
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March
6,
2008 .
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G.
XXXXXX XXXXXX
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G.
XXXXXX
XXXXXX
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