SEPARATION AGREEMENT
Exhibit 10.6
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 Xxxx Xxxxxxxxx and PG&E Corporation (the “Corporation”) (collectively the “Parties”) and sets forth the terms and conditions of Xx. Xxxxxxxxx’x separation from employment with the Corporation. The “Effective Date” of this Agreement is defined in paragraph 18(a).
1. Resignation. Effective the close of business on October 31, 2011 (for purposes of this Agreement, the “Date of Separation,”Xx. Xxxxxxxxx no longer will serve in his position as Senior Vice President, Corporate Strategy and Development of the Corporation. Xx. Xxxxxxxxx shall have until October 20, 2011 to accept this Agreement by submitting a signed copy to the Corporation. Regardless of whether Xx. Xxxxxxxxx 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. Xxxxxxxxx’x acceptance of this Agreement.
2. Separation benefits. Even though Xx. Xxxxxxxxx is not otherwise entitled to them, in consideration of his acceptance of this Agreement, the Corporation will provide to Xx. Xxxxxxxxx the following separation benefits:
x. Xxxxxxxxx payment. Under the terms of the PG&E Corporation Officer Severance Policy, Xx. Xxxxxxxxx’x xxxxxxxxx payment amount is One Million Seven Hundred and Nine Thousand And Two Hundred Thirty-Two Dollars ($1,709,232), 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 18(a) below, all unvested restricted stock grants, performance share grants, and special incentive stock ownership premiums (SISOPS) provided to Xx. Xxxxxxxxx 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 Xx. Xxxxxxxxx. The payment and withdrawal of Xx. Xxxxxxxxx’x vested restricted stock grants, performance share grants, and SISOPs 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. Xxxxxxxxx.
c. In the event that officers in Xx. Xxxxxxxxx’x officer band are eligible for a payment under the Corporation’s Short-Term Incentive Plan (“STIP”) for the year in which the Date of Resignation occurs, Xx. Xxxxxxxxx will be entitled to receive a prorated STIP bonus at the same time such bonus, if any, would otherwise be paid to other officers in his band. The STIP Plan Administrator will have the sole discretion to determine the amount of STIP payment, consistent with the program guidelines for the year in which the Date of Resignation occurs.
d. Career transition services. For a maximum period of one year following the Date of Resignation, the Corporation will provide Xx. Xxxxxxxxx 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. Xxxxxxxxx’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. Xxxxxxxxx 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. Xxxxxxxxx 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. Xxxxxxxxx becomes covered under the health-insurance plan of another employer or through self-employment. Xx. Xxxxxxxxx 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 affiliate, or subsidiary will provide Xx. Xxxxxxxxx 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. Xxxxxxxxx will, upon reasonable notice, furnish information and proper assistance to the Corporation and/or its 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 affiliate or subsidiary will pay all reasonable expenses incurred by Xx. Xxxxxxxxx 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. Xxxxxxxxx, 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
2
unknown, suspected or unsuspected that he ever had, now has or might have as of the Effective Date against the Corporation or its predecessors, affiliates, subsidiaries, shareholders, owners, directors, officers, employees, agents, attorneys, successors, or assigns. These released claims include, without limitation, any claims arising from or related to Xx. Xxxxxxxxx’x employment with the Corporation, 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. Xxxxxxxxx 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. Xxxxxxxxx specifically waives all rights under Section 1542 of the California Civil Code which provides that:
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.
c. With respect to the claims released in the preceding paragraphs, Xx. Xxxxxxxxx will not initiate or maintain any legal or administrative action or proceeding of any kind against the Corporation or its predecessors, 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. Xxxxxxxxx will not seek any future re-employment with the Corporation, or any of its subsidiaries or affiliates. This paragraph will not, however, preclude Xx. Xxxxxxxxx from accepting an offer of future employment from the Corporation, or any of its subsidiaries or affiliates.
7. Non-disclosure.
a. Xx. Xxxxxxxxx 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. Xxxxxxxxx will give the Corporation notice at least ten (10) business days in advance.
3
8. No unfair competition.
a. Xx. Xxxxxxxxx will not engage in any unfair competition against the Corporation, or any of its subsidiaries or affiliates.
b. For a period of one year after the Effective Date, Xx. Xxxxxxxxx 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:
| (1) | any existing customer of the Corporation, or its affiliates or subsidiaries; |
| (2) | any prospective customer of the Corporation, or its affiliates or subsidiaries about whom Xx. Xxxxxxxxx acquired information as a result of any solicitation efforts by the Corporation, or its affiliates or subsidiaries, or by the prospective customer, during Xx. Xxxxxxxxx’x employment with the Corporation; |
| (3) | any existing vendor of the Corporation or its affiliates or subsidiaries; |
| (4) | any prospective vendor of the Corporation, or its affiliates or subsidiaries, about whom Xx. Xxxxxxxxx acquired information as a result of any solicitation efforts by the Corporation or its affiliates or subsidiaries, or by the prospective vendor, during Xx. Xxxxxxxxx’x employment with the Corporation; |
| (5) | any existing employee, agent or consultant of the Corporation or its affiliates or subsidiaries, to terminate or otherwise alter the person’s or entity’s employment, agency or consultant relationship with the Corporation, or its affiliates or subsidiaries; or |
| (6) | any existing employee, agent or consultant of the Corporation, or its affiliates or subsidiaries, to work in any capacity for or on behalf of any person, Corporation or other business enterprise that is in competition with the Corporation, or its affiliates or subsidiaries. |
9. Material breach by Employee. In the event that Xx. Xxxxxxxxx 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. Despite any breach by Xx. Xxxxxxxxx, 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. Xxxxxxxxx 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
4
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. Xxxxxxxxx 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. Xxxxxxxxx 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. Xxxxxxxxx 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. Xxxxxxxxx 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. Xxxxxxxxx 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. Xxxxxxxxx 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.
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. Xxxxxxxxx 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. Xxxxxxxxx’x employment with the Corporation, the separation of Xx. Xxxxxxxxx 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
5
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. Xxxxxxxxx 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.
17. Non-disparagement Covenant. Xx. Xxxxxxxxx shall not disparage the Corporation, or any affiliate or subsidiary, or any product or service of the Corporation, or any affiliate or subsidiary, or any past or present employee, officer or director of the Corporation or any affiliate or subsidiary, or of any member of any Board of Directors of any entity affiliated with the Corporation. No Corporation officer or director of the Corporation or affiliate or subsidiary shall, while employed by or a member of the Board, as the case may be, disparage Xx. Xxxxxxxxx.
18. Acceptance of Agreement.
a. Xx. Xxxxxxxxx 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. Xxxxxxxxx will have an additional seven (7) days in which to revoke
6
in writing acceptance of this Agreement. To revoke, Xx. Xxxxxxxxx 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. Xxxxxxxxx does not submit a timely revocation, the Effective Date of this Agreement will be the eighth day after he has signed it.
b. Xx. Xxxxxxxxx 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.
|
| ||
| Dated: October , 2011 | XXXX XXXXX Senior Vice President Human Resources | |
| Dated: October 13, 2011 | XXXX XXXXXXXXX | |
| XXXX XXXXXXXXX | ||
7
