Attached files
EXHIBIT 10.3
PG&E CORPORATION
2014 LONG-TERM INCENTIVE PLAN
2014 LONG-TERM INCENTIVE PLAN
PG&E CORPORATION, a California corporation, hereby grants Performance Shares to the Recipient named below. The Performance Shares have been granted under the PG&E Corporation 2014 Long-Term Incentive Plan, as amended (the "LTIP"). The terms and conditions of the Performance Shares are set forth in this cover sheet and the attached Performance Share Agreement (the "Agreement").
By accepting this award, you agree to all of the terms and conditions described in the attached Agreement. You and PG&E Corporation agree to execute such further instruments and to take such further action as may reasonably be necessary to carry out the intent of the attached Agreement. You are also acknowledging receipt of this award, the attached Agreement, and a copy of the prospectus describing the LTIP and the Performance Shares dated March 1, 2016.
If, for any reason, you wish to not accept this award, please notify PG&E Corporation in writing within 30 calendar days of the date of this award at ATTN: LTIP Administrator, Pacific Gas and Electric Company, 245 Market Street, N2T, San Francisco, 94105.
Attachment
PG&E CORPORATION
2014 LONG-TERM INCENTIVE PLAN
SAFETY AND AFFORDABILITY
The LTIP and Other Agreements
|
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 Any prior agreements, commitments or negotiations are superseded.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 will govern. Capitalized terms that are not defined in this Agreement are defined in the LTIP. In the event of any conflict between the provisions of this Agreement and the PG&E Corporation 2012 Officer Severance Policy, this Agreement will govern. The LTIP provides the Committee with discretion to adjust the performance award formula.
For purposes of this Agreement, employment with PG&E Corporation means employment with any member of the Participating Company Group.
|
Grant of
Performance Shares
|
PG&E Corporation grants you the number of Performance Shares shown on the cover sheet of this Agreement (the "Performance Shares"). The Performance Shares are subject to the terms and conditions of this Agreement and the LTIP.
|
Vesting of Performance Shares
Settlement in Shares/
Performance Goals
|
As long as you remain employed with PG&E Corporation, the Performance Shares will vest upon, and to the extent of, the Committee's certification of the extent to which performance goals have been attained for this award, which certification will occur on or after January 1 but before March 15 of the third year following the calendar year of grant specified in the cover sheet (the "Vesting Date"). Except as described below, all Performance Shares that have not vested will be cancelled upon termination of your employment.
Vested Performance Shares will be settled in shares of PG&E Corporation common stock, subject to the satisfaction of Withholding Taxes, as described below. The number of shares you are entitled to receive will be calculated by multiplying the number of vested Performance Shares by the "payout percentage" determined as follows (except as set forth elsewhere in this Agreement), rounded to the nearest whole number:
|
Fifty percent of the Performance Shares have a safety performance goal and resulting safety payout percentage, and the other fifty percent of the Performance Shares have an affordability performance goal and resulting affordability payout percentage. Subject to rounding considerations, in each case, if performance is below threshold, the payout percentage will be 0%; if performance is at threshold, the payout percentage will be 25%; if performance is at target, the payout percentage will be 100%; and if performance is at or better than maximum, the payout percentage will be 200%. The actual payout percentage for performance between threshold and maximum will be determined based on linear interpolation between the payout percentages for threshold and target, or target and maximum, as appropriate.
The measures and goals are discussed in more detail below:
Safety - At the end of 2018, PG&E Corporation's lost workday ("LWD") case rate ("LWD Rate") for that year will be measured as the number of LWD cases incurred per 200,000 hours worked during 2018. LWD cases will be measured in the same manner as for the 2016 Short-Term Incentive Plan, will include OSHA recordable incidents that result in loss of at least one workday, and will exclude fatalities. Threshold performance is 0.247, target performance is 0.215, and maximum performance is 0.201.
Affordability - PG&E Corporation's affordability performance will be measured as the reduction in standard rate case expense for unitized work and support operations and maintenance costs over the three calendar years prior to the normal Vesting Date (the "Performance Period"), as compared to escalated actual costs in these areas for 2014, escalated by two years (at 2.75 perent per year) , as determined in the sole discretion of the Committee in accordance with the terms adopted by the Committee at its February 16, 2016 meeting. Threshold performance is $75 million, target performance is $100 million, and maximum performance is $200 million.
The final payout percentages, if any, will be determined as soon as practicable following the date that the Committee (or a subcommittee of that Committee) or an equivalent body certifies the extent to which the performance goals have been attained, pursuant to Section 10.5(a) of the LTIP. PG&E Corporation will issue shares as soon as practicable after such determination, but no earlier than the Vesting Date, and not later than March 15 of the calendar year following completion of the Performance Period.
|
|
Dividends
|
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 will be accrued on your behalf. If you receive a Performance Share settlement in accordance with the preceding paragraph, at that same time you also will receive a cash payment equal to the amount of any dividends accrued with respect to your Performance Shares over the Performance Period multiplied by the same payout percentage used to determine the number of shares you are entitled to receive, if any.
|
Voluntary Termination
|
If you terminate your employment with PG&E Corporation voluntarily before the Vesting Date (other than for Retirement), all of the Performance Shares will be cancelled as of the date of such termination and any dividends accrued with respect to your Performance Shares will be forfeited.
|
Termination for Cause
|
If your employment with PG&E Corporation is terminated at any time by PG&E Corporation for cause before the Vesting Date, all of the Performance Shares will be cancelled as of the date of such termination and any dividends accrued with respect to your Performance Shares will 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.
|
No Retention Rights
|
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.
|
Recoupment of Awards
|
Awards are subject to recoupment in accordance with any applicable law and any recoupment policy adopted by the Corporation from time to time.
|
Applicable Law
|
This Agreement will be interpreted and enforced under the laws of the State of California.
|