EXHIBIT 10.2
PG&E CORPORATION
DEFERRED COMPENSATION PLAN
FOR NON-EMPLOYEE DIRECTORS
(As Amended and Restated Effective as of July 22, 1998)
1. Establishment and Purpose
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The is the controlling and definitive statement of the PG&E
Corporation Deferred Compensation Plan for Non-Employee
Directors ("Plan"). The Plan was originally adopted on
December 18, 1996, by the Board of Directors of PG&E
Corporation to provide Directors of PG&E Corporation an
opportunity to defer payment of their Meeting Fees and
Retainer Fees. The Plan is also intended to establish a
method of paying Meeting Fees and Retainer Fees which will
assist the Corporation in attracting and retaining persons
of outstanding achievement and ability as members of the
Board of Directors of the Corporation.
2. Definitions
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(a) "Beneficiary" means the person, persons, or entity
designated by the Director to receive payment of the Director's
Deferred Compensation Account in the event of the death of the
Director.
(b) "Board" and "Board of Directors" means the Board of
Directors of the Corporation.
(c) "Committee" shall mean the Nominating and Compensation
Committee of the Board.
(d) "Corporation" means PG&E Corporation, a California
corporation.
(e) "Deferred Compensation Account" means the bookkeeping
account established pursuant to Section 6 on behalf of each
Director who elects to participate in the Plan.
(f) "Deferred Election Form" means a participation form to be
supplied by the Secretary of the Corporation.
(g) "Director" means a member of the Board of Directors who is
not an employee of the Corporation or any subsidiary thereof.
(h) "Director's Termination Date" shall mean the effective date
of the Director's resignation from the Board of Directors of the
Corporation.
(i) "Meeting Fee" means the amount of compensation paid by the
Corporation to a Director for his or her attendance and services
at a meeting of the Board of Directors or any committee thereof.
A Meeting Fee shall not include (i) any Retainer Fee, (ii) any
reimbursement by the Corporation of expenses incurred by a
Director incidental to attendance at a meeting of the Board of
Directors or of a committee thereof or of any other expense
incurred on behalf of the Corporation, or (iii) any amount
payable with respect to services rendered prior to January 1,
1997.
(j) "Plan" shall mean the PG&E Corporation Deferred Compensation
Plan for Non-Employee Directors.
(k) "Retainer Fee" means the amount of compensation paid by the
Corporation to a Director for retaining his or her services
during a calendar quarter. A Retainer Fee shall not include (i)
any Meeting Fee, (ii) any reimbursement by the Corporation of
expenses incurred by a Director incidental to attendance at a
meeting of the Board of Directors or of a committee thereof or of
any other expense incurred on behalf of the Corporation, or (iii)
any amount payable with respect to services rendered prior to
January 1, 1997.
(l) "Year" shall mean the calendar year.
3. Eligibility
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Each Director who receives a Meeting Fee or Retainer Fee for
service on the Board of Directors shall be eligible to
participate in the Plan.
4. Participation
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In order to commence participation in the Plan in 1997, a
Director must file a deferral election with the Secretary of
the Corporation prior to January 1, 1997. In order to
commence participation in the Plan for calendar quarters
commencing on or after April 1, 1997, a Director must file a
Deferral Election Form with the Secretary of the Corporation
prior to the first day of the calendar quarter for which
participation is to become effective. Notwithstanding the
foregoing, in the case of a newly elected Director, an
election to participate shall be effective for the calendar
quarter in which the Director is first elected if it is
filed before the date the Director first receives a Meeting
Fee or Retainer Fee (but in no event later than one month
following the date of election).
A participating Director may defer:
(a) All Retainer Fees only; or
(b) All Meeting Fees only; or
(c) All Retainer Fees and all Meeting Fees.
The Retainer Fees and Meeting Fees deferred under (a), (b),
or (c), above, shall be net of any amounts which a Director
has authorized the Corporate Secretary to transmit to the
Corporation's Dividend Reinvestment Plan. Partial deferral
of Retainer Fees or Meeting Fees is not permitted.
Payment to the Director of deferred compensation may, at the
election of the participating Director, be paid in a lump
sum or in a series of ten or less approximately equal annual
installments. Payment to the Director shall commence in the
Year following the Director's Termination Date or in such
earlier Year as the Director may specify on the Deferral
Election Form; provided however, that a Director may not
elect to defer the receipt of Retainer Fees or Meeting Fees
for less than three years.
5. Deferral Election
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A Director who elects to participate in the Plan shall file
an executed Deferral Election Form with the Secretary of the
Corporation indicating the compensation to be deferred, the
time and form of distribution, and the Beneficiary
designations described in Section 9.
The Director's deferral election shall become effective and
apply with respect to Meeting Fees and Retainer Fees earned
for the first calendar quarter after the Deferral Election
Form is filed with the Secretary of the Corporation and all
subsequent calendar quarters until revoked (by electing not
to further defer either Meeting Fees or Retainer Fees) or
modified by the Director. The Director shall notify the
Secretary of the Corporation in writing of any such
revocation or modification, which shall apply solely to
amounts deferred with respect to calendar quarters following
the calendar quarter in which the revocation or modification
is received by the Secretary of the Corporation.
Notwithstanding the foregoing, the Director's designation as
to time and form of distribution to the Director of deferred
compensation may not be revoked or modified by the Director
either as to amounts already deferred or as to amounts to be
deferred in the future.
6. Credits to Deferred Compensation Account
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Upon receipt of a duly filed Deferral Election Form, the
Corporation shall establish a Deferred Compensation Account
to which shall be credited an amount equal to the Meeting
Fees and/or Retainer Fees which would have been payable
currently to the Director but for the terms of the deferral
election.
Retainer Fees and Meeting Fees shall be credited to the
Director's Deferred Compensation Account as of the following
dates:
(a) The deferred Retainer Fee for each calendar quarter shall be
credited to such Account as of the first business day of such
calendar quarter; and
(b) The deferred Meeting Fee shall be credited to such Account
as of the date of the meeting for which the Meeting Fee was
earned.
7. Earnings During Deferral Period
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At such time as participant elects to participate in the
Plan, he shall also elect to have his account balances
credited to the Utility Bond Fund or to the PG&E Corporation
Phantom Stock Fund. Participant shall make such elections
and in such percentages as the Secretary of the Corporation
shall prescribe. Participant shall be able to reallocate
account balances between the funds and reallocate new
deferrals at such time and in such manner as the Secretary
of the Corporation shall prescribe; provided, however, that
a participant may not reallocate PG&E Corporation Phantom
Stock Fund units and the earnings thereon which were
credited to a participant's Deferred Compensation Account in
connection with the termination of the PG&E Corporation
Retirement Plan for Non-Employee Directors. Anything to the
contrary herein notwithstanding, a participant may not
reallocate account balances between funds if such
reallocation would result in a non-
exempt discretionary transaction under Rule 16b-3 of the
Securities Exchange Act of 1934, as amended, or any successor
to Rule 16b-3, as in effect when the reallocation is requested.
(a) Utility Bond Fund
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On the first business day of each calendar quarter,
interest shall be credited on the balance in each
participant's Deferred Compensation Account as of the
last day of the immediately preceding calendar quarter.
Such interest shall be at a rate equal to the AA
Utility Bond Yield reported in Moody's Public Utility,
published in the issue of Moody's Investors Service
immediately preceding the first day of the calendar
quarter in which the interest is to be credited. Such
interest shall become a part of the Deferred
Compensation Account and shall be paid at the same time
or times as the balance of the Deferred Compensation
Account. Notwithstanding the above, if a participant
has requested that his account balance be reallocated
to the PG&E Corporation Phantom Stock Fund before the
end of the quarter, prorated interest on the
participant's account balance shall be calculated at a
rate equal to the AA Utility Bond Yield reported in
Moody's Public Utility, published in the issue of
Moody's Investors Service immediately preceding the
date of reallocation, shall be credited to the
participant's account on the date of reallocation, and
shall be subject to the reallocation request.
(b) PG&E Corporation Phantom Stock Fund
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Deferrals credited to this Fund shall be converted into
units (including fractions computed to three decimal
places) each representing a share of PG&E Corporation
stock. The value of a unit for purposes of determining
the number of units to credit upon initial deferral or
reallocation from the Utility Bond Fund, and for
determining the dollar value of the aggregate number of
units to be reallocated from the PG&E Corporation
Phantom Stock Fund to the Utility Bond Fund, shall be
the average of the daily high and low price of a share
of PG&E Corporation common stock as traded on the New
York Stock Exchange for the 30 trading days preceding
(i) the date that deferrals and reallocations are
credited to a participant's account in the PG&E
Corporation Phantom Stock Fund in the case of new
deferrals and reallocations from the Utility Bond Fund,
and (ii) the date the Secretary of the Corporation
receives a reallocation request, in the case of
reallocations. Thereafter, the value of a unit shall
fluctuate in accordance with the closing price of PG&E
Corporation common stock on the New York Stock
Exchange.
Whenever dividends are paid with respect to the
Corporation's common stock, additional units (including
fractions computed to three decimal places) shall be
credited to a participant's account on the dividend
payment date in an amount determined by dividing (i)
the aggregate amount of dividends, i.e,. the dividend
multiplied by the number of units credited to the
participant's account as of the dividend record date,
by (ii) the closing price of PG&E Corporation common
stock on the New York Stock Exchange on the dividend
payment date. If, after the record date but before the
dividend payment date, a participant's balance in the
PG&E Corporation Phantom Stock Fund has been
reallocated to the Utility Bond Fund, or has been paid
to the participant or the participant's beneficiary,
then an amount equal to the aggregate dividend shall be
credited to the participant's
account in the Utility Bond Fund, or paid directly to the
participant or the participant's beneficiary, whichever
is applicable.
8. Form and Time of Payment to a Director of Deferred
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Compensation Account
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Payment to a Director of his or her Deferred Compensation
Account shall be made in cash. At the election of the
participant, the cash may be paid in a lump sum or in a
series of ten or less approximately equal annual
installments. Payment to the participant shall be made at
such time and in such form as the participant has specified
on the Director's deferral election form; provided, however,
that payments shall commence (either as a lump sum or as the
first of a series of ten or less approximately equal annual
installments) no later than January of the Year following
the Year in which the participant's service on the Board
terminated. Payment to a participant of his or her deferred
compensation account shall be made in January of each Year
in which payment is to be made in accordance with the
participant's deferral election.
Notwithstanding the foregoing, amounts attributable to PG&E
Corporation Phantom Stock Fund units and the earnings
thereon which were credited to a participant's Deferred
Compensation Account in connection with the termination of
the PG&E Corporation Retirement Plan for Non-Employee
Directors may not be distributed from the Plan until after
the participant retires from the Board or age 65, whichever
event occurs later. Such amounts shall be paid in a lump
sum or in a series of ten or less approximately equal
installments as previously specified by the Director.
Payment shall commence in January of the Year following the
Year in which the Director retired or attained age 65,
whichever is later.
For purposes of this Section 8 and Section 9 below, the
amount of cash to be distributed upon settlement of units
credited to a participant's account in the PG&E Corporation
Phantom Stock Fund shall be equal to the number of credited
units, or fraction thereof, multiplied by the average of the
high and low price of a share of PG&E Corporation common
stock as traded on the New York Stock Exchange for the 30
trading days preceding the date of distribution.
9. Effect of Death of Participant
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Upon the death of a Director who participated in the Plan,
all amounts, if any, remaining in his or her Deferred
Compensation Account shall be distributed to the Beneficiary
designated by the Director. Payment to the Beneficiary
shall be made at such time and in such form as the
participant has previously specified in a form previously
filed with the Secretary of the Corporation; provided
however, that payments shall commence (either as a lump sum
or as the first of a series of ten or less approximately
equal annual installments) no later than January of the Year
following the Year in which the participant's death
occurred. The Committee, however, reserves the right to
determine in its sole discretion that payment shall be made
at a different time or times (but no later than ten years
after the death of the Director). Earnings, as determined
under Section 7 of the Plan, shall be credited to the date
of distribution.
If the designated Beneficiary does not survive the Director
or dies before receiving payment in full of the Director's
Deferred Compensation Account, payment of the remaining
balance shall be made as soon as practicable in a lump sum
to the estate of the last to die of the Director or the
designated Beneficiary. All Beneficiary designations
including selection of the timing and manner of payments to
any Beneficiary) may be revoked or modified at the
Director's option without the consent of the Beneficiary.
The Director shall notify the Secretary of the Corporation
in writing of any such revocation or modification.
10. Participant's Rights Unsecured
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The interest under the Plan of any participating Director
and such Director's right to receive a distribution of his
or her Deferred Compensation Account shall be an unsecured
claim against the general assets of the Corporation. The
Deferred Compensation Account shall consist of bookkeeping
entries only, and no Director shall have an interest in or
claim against any specific asset of the Corporation pursuant
to the Plan.
11. Statement of Deferred Compensation Account
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The Secretary of the Corporation shall provide to each
participating Director an annual statement of his or her
Deferred Compensation Account no later than January 31 each
year.
12. Nonassignability of Interests
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The interests and property rights of any Director under the
Plan shall not be assignable either by voluntary or
involuntary assignment or by operation of law, including
(without limitation) bankruptcy, garnishment, attachment or
other creditor's process, and any act in violation of this
Section 12 shall be void.
13. Administration of the Plan
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The Plan shall be administered by the Committee. In
addition to the powers and duties otherwise set forth in the
Plan, the Committee shall have full power and authority to
administer and interpret the Plan, to establish procedures
for administering the Plan, and to take any and all neces
sary action in connection therewith. The Committee's
interpretation and construction of the Plan shall be
conclusive and binding on all persons.
14. Amendment or Termination of the Plan
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The Board of Directors may amend, suspend, or terminate the
Plan at any time. In the event of such termination, the
Deferred Compensation Accounts of participating Directors
shall be paid at such times and in such forms as shall be
determined pursuant to Section 8, unless the Board of
Directors shall prescribe a different time or times for
payments of such Accounts.