EXHIBIT 10.38
PG&E CORPORATION
LONG-TERM INCENTIVE PROGRAM
PERFORMANCE SHARE AGREEMENT
PG&E CORPORATION, a California corporation, hereby grants
Performance Shares to the Recipient named below. The Performance Shares have
been awarded under the PG&E Corporation Long-Term Incentive Program (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").
Date of Grant: January 2, 2004
Name of Recipient:______________________________________________________________
Recipient's Social Security Number: _____-____-_____
Number of Performance Shares:___________________________________________________
BY SIGNING THIS COVER SHEET, 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 THIS AGREEMENT. YOU ARE ALSO
ACKNOWLEDGING RECEIPT OF THIS AGREEMENT AND A COPY
OF THE PROSPECTUS DESCRIBING THE LTIP AND THE
PERFORMANCE SHARES DATED JANUARY 1, 2004.
Recipient: _____________________________________________________________________
(Signature)
Attachment
Please return your signed Agreement to PG&E Corporation, Human Resources,
One Market Street, Spear Street Tower, Suite 400, San Francisco, California
94105
PG&E CORPORATION
LONG-TERM INCENTIVE PROGRAM
PERFORMANCE SHARE AGREEMENT
THE LTIP AND This Agreement constitutes the entire understanding
OTHER between you and PG&E Corporation regarding the
AGREEMENTS 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superseded.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.
GRANT OF PG&E Corporation grants you the number of
PERFORMANCE Performance Shares shown on the cover sheet of this
SHARES Agreement. The Performance Shares are subject to the
terms and conditions of this Agreement and the LTIP.
VESTING OF As long as you remain employed with PG&E Corporation
PERFORMANCE (or any of its subsidiaries), the Performance Shares
SHARES will vest on the first business day of January (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.
PAYMENT OF Upon the Vesting Date, PG&E Corporation's total
PERFORMANCE shareholder return (TSR) will be compared to the TSR
SHARES of the fifteen other companies in PG&E Corporation's
comparator group(1) 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 at the 90th percentile or greater will result in
a 200% payout of Performance Shares. The payment will
equal the product of the number of vested Performance
Shares, the payout percentage, and the average price
of a share of PG&E Corporation common stock for the
last 30 calendar days of the year preceding the
Vesting Date. Payments will be made in January of the
year in which the Vesting Date occurs.
VOLUNTARY If you terminate your employment with PG&E
TERMINATION Corporation (or any of its subsidiaries) voluntarily
before the Vesting Date, all of the Performance
Shares shall be cancelled as of the date of such
termination.
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(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.
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TERMINATION FOR If your employment with PG&E Corporation (or any of
CAUSE its subsidiaries) is terminated by PG&E Corporation
or the subsidiary for cause before the Vesting Date,
all of the Performance Shares shall be cancelled as
of the date of such termination. 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 or
the employing subsidiary.
TERMINATION If your employment with PG&E Corporation (or any of
OTHER THAN FOR its subsidiaries) is terminated by PG&E Corporation
CAUSE or the subsidiary other than for cause before the
Vesting Date, your unvested Performance Shares will
vest proportionally based on your service to the date
of termination and will be payable, if at all, in
January of the year in which the Vesting Date occurs.
The formula for proportional vesting is as follows:
time worked to termination (number of months rounded
down) divided by the number of months in the
Performance Period (36 months). All other outstanding
Performance Shares shall automatically be cancelled
upon such termination.
RETIREMENT 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, in January of the year in which
the Vesting Date occurs. 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 or any of its subsidiaries for at least
five consecutive years ending on the date of
termination of your employment.
DEATH/DISABILITY If your employment terminates due to your death or
disability before the Vesting Date, all of your
Performance Shares shall vest and will be payable, if
at all, on the Vesting Date.
TERMINATION DUE If (1) your employment is terminated (other than for
TO DISPOSITION OF cause or your voluntary termination) by reason of a
SUBSIDIARY 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 Code 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 service to the date of
termination and will be payable, if at all in January
of the year in which the Vesting Date occurs. The
formula for proportional vesting is as follows: time
worked to termination (number of months rounded down)
divided by the number of months in the Performance
Period (36 months). All other outstanding Performance
Shares shall automatically be cancelled upon such
Termination.
WITHHOLDING PG&E Corporation will withhold amounts necessary to
TAXES satisfy applicable taxes from the payment to be made
with respect to your Performance Shares. You will
receive the remaining proceeds in cash.
CHANGE IN All of your outstanding Performance Shares shall
CONTROL automatically vest, and become nonforfeitable if
there is a Change in Control of PG&E Corporation
before the Vesting Date. Such vested shares will
become payable on the first business day of the year
following the Change in Control. The payment, if any,
will be based on PG&E Corporation's TSR for the
period from the date of grant to the date of the
Change in Control compared to the TSR of the other
companies in PG&E Corporation's comparator group(2)
for the same period. 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 at the 90th percentile or
greater will result in a 200% payout of Performance
Shares. The payment will equal the product of the
number of vested Performance Shares, the payout
percentage, and the average price of a share of PG&E
Corporation common stock for the last 30 calendar
days preceding the Change in Control.
LEAVES OF For purposes of this Agreement, if you are on an
ABSENCE approved leave of absence from PG&E Corporation (or
any of its subsidiaries), or a recipient of PG&E
Corporation (or any of its subsidiaries) sponsored
disability benefits, you will continue to 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
(or any of its subsidiaries) 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.
NO RETENTION This Agreement is not an employment agreement and
RIGHTS does not give you the right to be retained by PG&E
Corporation (or its subsidiaries). Except as
otherwise provided in an applicable employment
agreement, the Company (or any of its subsidiaries)
reserves the right to terminate your employment at
any time and for any reason.
APPLICABLE LAW This Agreement will be interpreted and enforced under
the laws of the State of California.
BY SIGNING THE COVER SHEET OF THIS AGREEMENT, YOU AGREE TO ALL OF THE TERMS AND
CONDITIONS DESCRIBED ABOVE AND IN THE LTIP.
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(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.
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